Using apps like Deliveroo and Uber Eats to get food delivered to your door will be familiar to most of us. But where do you start if you’re thinking about opening a takeaway rather than buying your dinner from one?
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If you’re looking for small business ideas, opening a takeaway isn’t a bad shout. Customers love convenience – as Nielsen said in August 2018, “global consumers are actively seeking ways to keep pace with an accelerated lifestyle.” Takeaways are just one way they can keep pace – and get valuable time back.
And while takeaways have always been a staple of the UK High Street, the market’s changing. For example, The Guardian cites research from the British Takeaway Campaign, which says orders of vegan takeaways grew 388 per cent between 2016 and 2018. That same research suggests the takeaway sector is twice the size it was two years ago.
So, it’s clear that new business owners who are prepared to get creative with their takeaway and fill a niche could become very successful. Ready to get going? Follow our eight-step plan for starting a takeaway business.
1. Build your takeaway business plan
A business plan is one of the most important documents for any new business. It makes you answer questions before you start out, gives you goals to work towards, and helps you sell your business to potential lenders and investors.
What are some of the questions you should answer in a takeaway business plan?
What kind of takeaway am I opening?
You need a strong concept when starting out. If you already have one, great – but if you aren’t sure, here are some takeaway business ideas:
meat-free – vegan food is transforming the takeaway sector. If your area doesn’t have many meat-free options, but there’s clearly demand, could you fill the gap?
Sri Lankan – BBC Good Food put Sri Lankan food top of its list of trends for 2019. They cite the success of restaurant Hopper’s, as well as the M&S Taste Asia range
green choices – no, not a takeaway that only serves runner beans, Brussels sprouts and garden peas. Rather, a takeaway based on ethical choices – like reduced waste and plastic-free
It’s important to carry out proper market research and include it in your business plan. Who are your competitors? What takeaways already exist in the area? If there are lots of similar takeaways, you might be entering a saturated market. But if there aren’t any similar takeaways, you should research why. Does it mean there’s no demand?
What will my menu look like?
Create a sample menu as part of your business plan, after you’ve settled on your concept. Arguably your menu is your takeaway’s most important document – it’s your shop window. This gets you thinking about your brand, your dishes, and the price you want to sell them at.
What service am I offering?
There are lots of different ways you can offer customers a takeaway. There are the traditional takeaway stores on the High Street, and sometimes restaurants have a takeaway service too. But increasingly, takeaways operate a delivery service and are offering their food through apps like Just Eat, Deliveroo and Uber Eats.
You should explore all options for your takeaway startup and detail your service in your business plan.
2. Is franchising a good option when opening a takeaway?
When opening a franchise, you get the benefits of an existing corporate structure, stock management and brand recognition.
And according to this Telegraph article, franchisees can run ‘mini empires’ of takeaway stores around the country.
With well-known options available, like McDonalds, Subway and Papa Johns, opening a franchise might be a good option. But there are also downsides – not least the fact that you have to pay a portion of your profits to the franchisor.
Researching whether a franchise is the right option for you is something you should do at the beginning of your takeaway journey.
3. Find a location for your takeaway business
Finding the right premises is really important for takeaways, as walk-in trade will be a big part of your business. After all, your customers are coming to you for convenience.
Your takeaway should be somewhere with good footfall so people can stop and get food quickly and easily. When researching locations, find out what businesses have been in the premises before – if a takeaway or restaurant was there previously, what were the reasons it closed?
You could also get in touch with a commercial property agent to help you find the right space, but make sure that you get legal advice before taking on a lease.
Deepak Christopher, owner of London takeaway Chilli Tuk Tuk, told Virgin Start Up: “We intentionally looked for a premises that had the relevant licences in place. Applying for the right licence on a property that doesn’t have one can be a long process, so this became a determining factor.”
4. Financing your takeaway business
Starting a business requires an initial cash injection. Some entrepreneurs use personal savings to fund their startup, or borrow from friends and family. Others go to the bank.
Then there are options like Funding Circle, which offers loans funded by thousands of investors, including the UK government.
Here’s Deepak Christopher from Chilli Tuk Tuk again, talking about financing: “It was important to ensure we had the right amount of finance in place, and to understand what we realistically needed, along with a contingency plan, so we could cover our losses until the business started to pick up. We believe in our product and didn’t want to see the wrong calculations force us out of the market.”
So be sure to detail your finances in your business plan, working out the costs involved and addressing your takeaway’s cash flow.
5. Learn the law
There are plenty of legal requirements when it comes to opening a takeaway. Most importantly, you need to make sure you’re up to speed on all the health and safety legislation. You can read about your responsibilities on the Health and Safety Executive site. There’s also a lot of information on food safety at the Food Standards Agency.
Firstly, you have to register your food business with your local authority at least 28 days before opening.
It’s a legal requirement to have a Food Hygiene Certificate, which gives your customers clear information about your hygiene standards. The Food Standards Agency says that all business should be able to achieve the highest rating of five – a high rating should make it easier for customers to trust your food.
And if you do get a good rating, Environmental Health Officers can make unplanned visits, so you shouldn’t let your standards slip.
Keep in mind that Just Eat don’t accept any takeaway stores onto their platform that have a hygiene rating of less than three.
You also need to contend with regulations covering storage, labelling and food preparation areas. It might be a good idea to get professional advice in this area, if you think you need it.
And finally, with several tragic cases in the news recently, you should be clear about any allergen risks on your menu. Read our article for more information on food labelling regulations and the importance of understanding them.
6. Get takeaway insurance
Business insurance isn’t a legal requirement (unless you have employees). But as with any business, takeaways come with a number of risks. That’s why it’s important to consider buying insurance – here are the covers to consider:
public liability insurance – this covers you if a member of the public gets injured or suffers a loss and blames your business
employers’ liability insurance – this is usually a legal requirement for businesses that have staff. It covers you if an employee gets injured or falls ill as a result of working for you
product liability insurance – this protects against claims for personal injury or property damage caused by a product your business designed, sold or supplied
business equipment insurance – if your specialist equipment gets lost, stolen or destroyed, this cover helps you get back on your feet quickly
7. Get stocked
Food, equipment and furnishings for your store will make up most of your outgoings when you’re setting up. You should try to negotiate the best deal with your suppliers.
If you buy a franchise, you might have to buy stock direct from the franchisor. Otherwise, try searching through one of the UK’s many wholesale directories to give you leads on possible suppliers.
Stock management is also key for takeaway businesses. Make sure that you have an efficient process for managing and rotating products to ensure minimum wastage.
8. Reach your customers
You’re set up and ready to go – now you just need to make sure you’re bringing in customers.
You can look at registering your takeaway with the apps mentioned above, like Just Eat and Deliveroo. You might want to build your own business website too, as well as get active on social media.
On a similar theme, online reviews are going to be very important for your takeaway. Make sure you have an effective system in place for managing them. Remember that even if a customer does leave a bad review, the way you respond can still leave a positive impression.
When you open, how about holding a launch party and running special promotions? This can be a good way to spread some positive word of mouth.
You could also introduce a loyalty scheme (like the free meal at Nando’s after someone has collected enough stamps).
Your takeaway business – let us know how you get on
After you open a takeaway, keep us updated with how you get on and let us know if there are any more tips you think we should add to our list.