myPOS blog Tips

How to Start a Food Truck Business in the UK

Tips / 15.12.2020

Summary

The concert has just finished and you’re famished. Luckily, there’s a food truck nearby with delicious Egyptian sandwiches. You go for it and are amazed at the quality of the food!

You might not know it but behind these food trucks are individuals who specialise in creating delicious foods and this is usually coupled with a passion for all things food related. And with the rise of the foodie culture in the UK, mobile food businesses are on the rise, too, catering to the demand for high-quality, unique foods representing cultures from all over the world.

Street food can be found almost anywhere these days – from concert venues, weddings, seasonal open markets, in pop-up markets and more.

If you’re on the flip side of the coin and are an aspiring restauranteur who’d like to test the market first before opening your brick-and-mortar restaurant, and you’re considering starting a food truck business, then this post is for you!
We go through everything you need to know from the market research & creating a comprehensive business plan to choosing the best card machine!

Start out by doing your market research

Although food trucks are not physically that large compared to a brick-and-mortar restaurant, you shouldn’t be deceived by the amount of work you’ll have to put into your food truck business. This is also valid for the financial preparation that goes behind it.

As a starting point, you’ll need to conduct your market research and analysis starting with the perfect locations. Where do you plan on offering your delicious treats? Will you be located in one place and one place only or will you move around as demand calls for it?

In addition, does your food truck business have a name, logo and design?

You also need to have a menu that you’ll be willing to offer your clientele.

Once you’ve figured out these food truck concept basics, you need to research your customers. What is their average age? Are they males or females? What is their average monthly income? What prices will you be charging for your offering and will these prices offset all your expenses?

Starting out with market research is a great way of determining whether there’s current demand for your food. After all, there’s no point in offering the same thing that every Joe out there is offering – you need to set yourself apart from your competitors and try to ensure you’re not working in an oversaturated market place.

Create your business plan

If your market research yields positive results, you’re ready to create your business plan. But what is a food truck business plan and what information does it contain?

Let’s take a closer look.

Executive Summary

In this section, you’ll want to include a concise summary of what your business’ main aim is as well as what primary need it solves within the food industry. You can also consider adding information from your market research, particularly about what sets you apart from your competitors.

Company description

As the title implies, you should consider including a description of your company. This information should include your business’ legal entity type, its date of incorporation, your physical location, etc.

Industry analysis

Based on the market research you conducted in the section above, here you can provide information on the current size of your target market, as well as any trends that you have witnessed. In this section, you can also provide a customer analysis by focusing on their demographics. This will later inform the marketing strategies of your new business.

Competitor analysis

You already know that you’re not the first food truck business owner in the UK, so that means analysing the existing competition. Who are they? Where are their strengths? What areas are they lacking in? And how can you compete with them? Not knowing the existing market will make it harder for you to find your place in it.

Personnel

In this section of your business plan, you’ll want to consider discussing the number of employees that you plan on hiring to help you with your food truck business, as well as the management team, if any. This will be a vital part of your financial projections.

Mid- to long-term plans for your business

This section refers to the operational part of your business. You can add information that relates to the daily operations of your business and how you plan on ensuring that it yields profits and is ultimately successful in the long run.

Inventory

Although relatively small in size, food trucks are still assets and it’s not only the food truck itself which will count towards your inventory, but your food supplies, too. The type of stock that will make the bulk of your business offering and its costs will help you complete this section.

Marketing plan

Overnight success is unlikely and you’ll need to work hard to acquire and retain customers. This is why you need a marketing plan to show your investors or lenders how you plan on doing so.

For example, will you send out flyers, will you have a website that advertises the next location you’ll be present at? How about the use of social media accounts such as Instagram and Facebook to promote your treats? All of this needs to be well-thought-out as a part of a social media marketing plan.

Financial plan

Arguably one of the most important parts of a business plan is the financial analysis you’ll undertake. In this section, you need to include forecasts of projected income. Also, you may consider including a cash flow analysis, profitability projections as well as projected expenses.

Obtain the necessary licenses

Just like any other hospitality business type, you’ll need to ensure you get all the necessary food truck licences if you’re planning on operating in the UK.

Here’s a quick preview of the food business licence variations you’ll need to serve food and operate undisturbed.

Register as a business with the local council

On the one hand, you can’t start offering your meals to your food truck customers without registering with the government. On the other hand, this is free.

The registration period is about four weeks and you can do so via the gov.uk website. When you register a food business, you will be visited by the Health & Safety Executive (HSE) who will assess the hygiene standards at your food truck. You can, however, begin trading before this visit but make sure your registration has gone through first.

Get a Level 2 or 3 Food Safety & Hygiene licence

These certificates are necessary for food truck owners who want to sell food in the UK.

While the Level 2 certificate is necessary if you’re running your food truck by yourself, a Level 3 certificate is needed if you plan on employing or using the services of other individuals. The costs of these two certificates are 49.99 GBP and 84.99 GBP, respectively.

Get an approved HACCP plan

The Hazard Analysis and Critical Control Point (HACCP) is proof that you have a clear understanding of the way in which food needs to be stored and further, that you have the right storage facilities for the food you plan to keep on your premises.

A floor plan will be necessary for this plan, especially one that indicates your various storage facilities, and you’ll also need to clearly indicate where each ingredient will be stored.

LPG and PAT certificates

Liquefied Petroleum Gas (LPG) and Portable Appliance Testing (PAT) are applicable to food premises that serve hot food.

The LPG certificate is for the usage of gas stoves, whereas the PAT certificate is for electric cooking devices.

Public liability insurance

This is necessary in the event of any mishaps or accidents that may happen in or around your food truck, and relate to both your customers and your employees as well as any damage to public or private property. The average cost for such insurance varies between 100 and 150 GBP per year.

Street vendor licence

A licence from your local council is also needed for you to be able to sell food in public. This licence is paid for each day that you sell food and its costs vary depending on your location.

Prices vary between 5 and 30 GBP per day.

Financing and payments

Financing your food truck will also require some careful consideration. You will also need to ensure that your business is able to accept all types of payments. Considering the increasingly tech-savvy clientele in the UK, you need to be prepared.

Here are some factors you’ll need to consider.

Personal loans or obtaining credit

The costs of getting a food truck (whether you rent or buy it – for more on this in the section below) are not insubstantial.

You will also need to think about financing your food supplies, food truck equipment, licences, etc. That’s why you will probably need to apply either for a personal loan or for credit from a reputable financial institution.

Obtaining a POS system

Once your funds are in hand, you will also need to consider investing in a credit card machine. These devices – whether traditional or smart – are a great way of ensuring you don’t miss a client.

Some card machines enable you to print receipts while others allow you to send digital receipts to your customers via SMS or email. Choose the device that’s best suited to your needs.

Using online payment tools

If you’re more tech-savvy than your competitors, you can also consider sending your customers Pay Links or Payment Requests. These are personalised links that you issue and which enable you to send to your customers. When they receive the link, they can click on it and make the payment.

Lease or purchase a food truck?

The question of whether you should lease or purchase your own food truck will be critical in terms of your finances and expenditure, and the answer to this question will depend entirely on your situation.

For example, do you want to become a food truck owner that is in it for the long-haul or are you considering doing this for a short period of time? This will determine whether you rent or buy.

If deciding to purchase a new food truck, costs vary between 5 000 GBP and 50,000 GBP, depending on the outfitting, equipment and all the accessories. Meanwhile, second hand vans can go for as little as 1,000 GBP.

Further cost considerations you need to factor into your calculations are the fact that you’ll need to wrap your food truck with an adequate design.

Marketing and web presence

Of course, no business can survive without marketing. Whether you plan on using pamphlets and flyers to advertise your food truck business to the local community, or you plan on going the techier route such as Instagram or Facebook, you need to make sure that your food truck business gains as much exposure as possible.

In addition, you may also want to consider creating a website for your food truck business. This way your loyal customers can follow you whenever you go to a new location or if you’re offering special one-time deals.

Regardless of the marketing channels you choose to use, make sure you’re always thinking of your target customers and communicating effectively with your audience.

How much does it cost to start a food truck business in the UK?

There are several startup costs related to your food truck business which you need to consider and we list these below. Ultimately, there’s no single cost for a food truck business, as each owner will invest in different areas of their business’ future development.

Let’s take a look at some of the factors for consideration in the table below:

Payroll and HR	License and permit fees	POS device	Advertising and marketing	Web hosting
Food supplies and inventory	Truck wrap and design	Equipment	Generators	Supplies (napkins, cups, cutlery etc.)
Office supplies	Cleaning products	Truck maintenance and insurance	Fuel	Liability insurance
Repairs and maintenance	The food truck itself – whether leased or purchased	Electricity and water	Business and vehicle insurance	Vehicle tax

If you’re wondering about street food profit and how much do food trucks make in the UK, you’ll be able to make this calculation by adding up all your costs from the table above, and substituting them from your income.

What is the best food truck business to start?

The food truck industry is more diverse and colourful than you’ve probably imagined before entering this realm.

If you’re looking to set up your mobile street food business but are wondering what food to serve, we have some valuable insights for you.

Here are some of the most popular food truck businesses to start:

Gourmet burgers – gourmet burgers are here to stay and they represent a business idea that never disappoints. You can provide unique, gourmet twists on traditional burgers to intrigue a diverse customer segment. For maximum results, try including locally sourced ingredients in your preparation and spreading the word to your audience. This can dramatically differentiate you from other food trucks in the area.
Ethnic cuisine – consider cooking up authentic dishes from different cultures to cater to the UK’s diverse population. Think about Mexican tacos, Indian curries, or Thai street food.
Vegan food – vegetarian and vegan meals are on the rise, with more and more consumers starting to develop a conscious approach to nutrition. Offer tasty meat-free options for vegan and vegetarian customers.
Brunch – breakfast and brunch pieces like pancakes, toast, or breakfast burritos can also be a powerful way to grab the attention of locals and quickly build your popularity as a food truck business.
Desserts and treats – if you’re passionate about waffles, crepes, or ice cream, the good news is that you can turn this passion into a profitable venture when it comes to food truck ideas.

These are just a few of the best food truck businesses worth exploring.

When making the right choice, don’t forget to carefully analyse market trends, and evaluate reports and data to ensure that you’re opting for a profitable and rewarding venture.

Benefits and challenges of the food truck business

Starting a food truck business goes hand in hand with several key advantages and disadvantages.

Advantages

There are three core benefits that attract many entrepreneurs to this form of business, including low startup costs, flexibility, and lower overheads.

Low startup costs

Compared to other businesses, the food truck startup costs are relatively low, enabling more people to test this opportunity, even with limited financial resources.

Especially when contrasting food truck businesses with traditional restaurants, the expenses for setting up your venture are slim. For example, you don’t need to invest in real estate, sophisticated technology, and a large team. The initial setup is much more affordable.

Flexibility

In addition, running a food truck business is extremely flexible and mobile.

You can easily switch locations and attract new customers in an instant, without needing to invest extra in your venture. You can move your cooking equipment and serve food at different venues, events, festivals, and anywhere where foot traffic is high.

Lower overheads

Last but not least, food trucks are associated with lower overheads, especially when compared to classic brick-and-mortar ventures.

This stems from the fact that in the case of food truck businesses, there are reduced rent, utilities, and staffing expenses.

Disadvantages

Although the mentioned above perks are lucrative, there are also a few challenges that must be addressed.

Regulatory compliance

To run a successful and undisturbed food truck business, it’s fundamental to be fully aware of rules and regulations by your local authority.

It’s key to receive all of the essential food truck permits and licences necessary for serving food and running a business. These also regard food hygiene, food waste management, and food inventory.

Climate dependencies

With food truck businesses, your success is directly tied to the weather conditions in the area where you serve food.

Unfortunately, unexpected storms, rainy days, or cold months often mean less foot traffic and even challenges for your food truck operations. For your business, this means fewer sales and less profit.

Competition

Keep in mind that the food truck market is very competitive.

There are many food truck owners competing for the same market, meaning that standing out from the crowd can be a difficult task, especially when you’re first getting started.

Insurance and liability

Moreover, obtaining reliable business insurance is essential to ensure you’re protected against possible risks.

These include accidents, equipment failure, legal conflicts, disputes, and more.

That’s a wrap!

A lot of effort will go into your food truck business, but if you have the willingness and motivation to go for it, it can be a truly worthwhile venture.

You can not only test out new dishes if you’re a budding chef, but you can also slowly build up to your brick-and-mortar restaurant over the long term by experimenting with different dishes, prices, and locations.

Disclaimer: Please be aware that the contents of this article and the myPOS Blog, in general, should not be interpreted as legal, monetary, tax, or any other kind of professional advice. You should always seek to consult with a professional before taking action, since the particulars of your situation may materially differ from other cases.