Starting a mobile catering business: Why a Start Up Loan could be a good option
Street food businesses are one of the most popular low cost business ideas - here's how a government-backed business loan could help get yours started
The mobile catering industry has experienced 2.2% year on year growth since 2010 (according to an IBISWorld Industry Research Report in 2015), and there are now over 25,000 people employed in the industry nationwide in over 6300 registered businesses. The old stereotype of a burger van selling at country fairs and outside sports grounds is no longer accurate. Never before has there been such a range of cuisines provided by mobile caterers.
As of January 2016, The Start Up Loans Company has backed over 200 mobile catering businesses. Below we find out why it is a popular industry to start a business in and how an Oxford-based catering business, Lowe Powe, launched with the help of a Start Up Loan.
Why is the mobile catering industry a popular choice for new businesses?
With low barriers to entry, the catering industry is an appealing industry to start a business in. The low start-up costs and limited specialist knowledge required make the industry accessible for many.
It also offers a huge amount of flexibility and independence that can allow you to continue working in another role whilst you get the business established. Hiatt Jackson launched her catering business, Cantina Burrito, with the help of a Start Up Loan. Running her own business allowed Hiatt to work around her children’s school hours. After she experienced demand for her products, Hiatt was able to slowly transition to a weekend service as well and the business has continued to grow.
Is a Start Up Loan a good option for a food truck business?
While starting up a mobile catering business can be more straightforward than other ventures, some initial funds are still required to cover costs such as the purchase of a catering unit and/or refitting of an existing one. Hiatt received an £8,000 Start Up Loan to ensure the trailer for Cantina Burrito could be purchased and then specially fitted.
As well as financial support, the government-backed Start Up Loans scheme also offers mentoring and advice. James Strawbridge, owner of mobile caterers Posh Pasty Company, said his Start Up Loan mentor provided ‘encouragement when required, direction when confused, and someone to listen to all our start-up concerns.’ Mentors have a wide range of experience in the business world and they are there to support your business, providing help and advice. A Start Up Loan recipient will be offered a mentor who is on hand to help give your business every chance of success.
Case Study: Lowe Powe
We asked Geoff Powell, founder of Lowe Powe, an Oxford-based mobile catering business, to explain his decision for approaching the Start Up Loans scheme and to offer some tips on launching into the industry.
Why did you apply for a Start Up Loan?
We used our own funds when we first started, which was enough to buy everything we needed for our first events, but we realised that we would save money if we had our own van rather than hiring one for each event. A low interest Start Up Loan allowed us to invest in a van whilst we built the business.
What did you use your Start Up Loan for?
Initially, we thought we'd buy a transit van but after looking at the options we realised it made more sense to buy a catering trailer. The trailer has many advantages, such as a reduced set-up and breakdown time after an event – the days are long and reducing the time taken to clean up and pack away at the end of the day is a bonus. We're also warmer and drier and can cope with the variable British weather. It's also a lot easier to keep clean and tidy, which is essential in the catering business.
What was it about the mobile catering industry that made you want to set up a business in it?
We chose to enter mobile catering because of the flexibility it offers and the low start-up cost. We also like the variety of meeting different people at many different events.
Did you have any prior experience in mobile catering?
We had no experience in catering but were keen amateur cooks. Our backgrounds are in IT and administration.
You decided to rebrand and essentially start afresh as a business, do you think this would’ve been as feasible in any other industry?
No, it's only the mobile catering business that would allow that. We originally started out as a mobile pasta seller but after a year of trading we found that our product was not selling as well as we had anticipated so we made an informed decision to change. Our total cost of rebranding and changing foods was only a few hundred pounds and the contacts we had made during the first year were still valid.
What are the main barriers to entry into the catering industry?
I wouldn't say there are any barriers. There are legal obligations to meet, such as the hygiene regulations, and safety factors when dealing with gas and hot surfaces, but all of these can be overcome with research and basic training.