How much does it cost to open and start a takeaway business?
By Kevin Moyse
If you’re starting a takeaway business then just by visiting us at Cheap Takeaway Menus you have potentially reduced your start-up costs. Congratulations, but we’ll get to cheap menu design and cheap menu printing shortly.
Okay, so... How much does it cost to open and start a takeaway business?
The simple answer is that there is no simple answer. There are no absolutes. There are dozens of factors which could vary your takeaway start-up costs. But the annual revenue from takeaway and fast food restaurants across the UK has been estimated at around £5 billion, so if it’s done right, then a slice of that particularly tasty pie could be yours. So here are a few ideas and options to build into your business plan and help you reduce your initial costs.
Luckily, the largest investment you will make when you start your takeaway business won’t cost you a penny. Time! Owner input is the most important aspect when opening a takeaway business and the more effort you put in, especially at the beginning of your journey, the less chance you’ll end up the answer to the question, ‘Didn’t there used to be a takeaway business there?’
We’ll start with what might arguably be your largest cost. You’ll probably be renting rather than buying. Renting is often preferred as it doesn’t greatly eat into your budget and the more working capital you can hang on to the better. Rental can be anywhere from £8000 per year upwards depending on footprint and location.
Try to find yourself a property where you won’t have to go through the hassle of applying for change of use. If you can find somewhere that already prepares food or has the licensing in place you can save yourself a great deal of time and money. Council planning departments don’t operate at the same speed as the rest of us…
Location, location, location! Unless you’re a delivery only takeaway (and how many of them can you name?) you’ll want to attract passing trade as much as online and telephone ordering. Once your reputation is secure you can build on both but when starting up you can’t afford to rely on one or the other. You need as many income streams as possible. So, if you can, find yourself a location with as much foot traffic passing by as possible where you can establish your brand and reputation. You can build a presence in people’s minds. We all have a mental landscape of our immediate surroundings and if you can plant the image of your business in there then you’re advertising yourself without your customers being aware of it. And that is free advertising!
If the customers can come to you then you’re cutting costs whilst making money by freeing up delivery drivers for other jobs.
You may have to pay that little bit extra for a prime location for your takeaway, but if you use it to its best advantage then it can be so much more cost effective and income generating than much cheaper premises in the middle of nowhere.
Depending on what kind of takeaway business you’re opening you’re going to need different types of catering equipment. Only you will know exactly what you’ll need but the chances are you’ll be looking for a cooking range, a fryer, a fridge and freezer, sinks, worktables, storage, probably a microwave and possibly a dishwasher. That little lot could set you back anywhere from £3000 to £20000. The higher end price may seem a lot but you may be looking for brand new, perhaps even bespoke kit, so if you are, then like the boy scouts, be prepared.
Having said that, you can fit out a commercial kitchen for a great deal less. If you’re willing to put in the thought and effort you can hunt down and secure the cheapest options which can save you thousands. Use any and all contacts you might have, look for going out of business sales, shop on eBay (right now there’s a commercial electric double deck pizza oven selling for just £320. Brand new they can cost over £2000!!!). Only buy what you need. That waffle and crepe machine may look like an attractive prospect but if there’s the smallest chance it’s going to end up an attractive paperweight, think again and keep hold of your money.
Some catering equipment companies offer leasing schemes where a small financial outlay provides you with equipment which can be paying for itself from the income it generates whilst your working capital remains untouched.
Depending on the size of your business, you’re going to need kitchen staff, counter staff, and delivery drivers. How much you pay them beyond minimum wage is up to you of course, but bear in mind that staff churn is and always has been an issue for takeaway businesses, and the less effort you have to put into recruiting and training new members of staff, the more time you can devote to developing your business and making money. A happy worker is a productive worker, so think of your staff as assets, treat them as such, and they will work for the good of the business just as any other asset does.
THE BUSINESSY STUFF
The prospect of starting a takeaway business is an exciting one. The shop, the shiny new equipment, the glossy, well-designed, low cost menus…but there is the other side of the business which you need to stay on top of.
You’ll need to register with HMRC as a business for tax and national insurance purposes. This can all be done online and doesn’t cost you anything when you register but build your future tax returns into any budget you put together.
Getting the right – and the cheapest – insurance for your takeaway business in place before you open the doors to customers is vital. You’ll need public liability, employer’s liability, stock, contents, building and perhaps business transport and delivery insurance. Don’t skimp on your provision. Takeaways are about making money as much as they are about providing good food and good service (they are a business after all), but one mishap for which you’re not covered could close you down overnight. There are many companies offering specialist takeaway insurance, so shop around.
You’ll need a license to trade as a food business and perhaps one for food premises approval (these are usually free), not to mention food hygiene and health and safety certificates. Environmental Health can call on you at any time and can close you down at a moment’s notice so maintain your premises and equipment. It’s common sense as much as anything and you won’t be able to open until you’re up to spec.
Hunt around for the best business energy tariffs. Some of the smaller energy companies cater specifically for the small business owner and don’t tie you down to lengthy contracts. And think about your own energy use. Are there any ways you could work which would reduce the fuel you burn and hence the bill you pay? If you make the right decision on energy before you even put that first pizza in the oven your takeaway business will have cost you less to start.
Don’t forget business rates, and check on Gov.uk to see if you’re entitled to any of the rate reductions, benefits and subsidies around. You could be saving money you never realised you’d be able to.
That’s where we come in! Hooray! A successful takeaway is a business which is always trying to stay in a customer’s mind - See our article "How to market your takeaway business?". A recent survey found that the average Brit spends over £100 a month on takeaway food. There’s no reason that £100 shouldn’t be on your food. The old adage about speculating to accumulate has stuck around for a reason. As your greatest income generating tool, realistically you should be dropping takeaway menus on hundreds if not thousands of doormats every week. Those menus need to stand out from your competitors, look great and become part of your customers’ lives. After all they may be living on a fridge door for a long time! See our article 10 Steps to a more profitable menu.
With great menu design comes great profitability! Cheap menu printing can still mean high quality takeaway menus. Check out our rates, take a look at our designs, order a sample pack and read our testimonials for proof of how much more you can get for less, because once your business is up and running then the high quality of the food, the great delivery service, and the high quality, well-designed and printed takeaway menus will be the engine that keeps your takeaway business moving forward.
At Cheap Takeaway Menus we know what we’re talking about and your business start-up costs will be significantly less. Your successful takeaway business, as it grows, will have a reliable and hardworking ally in us. We can even provide you with a free website – there’s another start-up cost saved! See Free Online Takeaway Ordering Websites for more info.
Starting up a takeaway business can seem like an expensive and daunting prospect, and if you’ve got money to burn you can make it just that. But who does? The best way to look at it is this: if you’ve made the decision to do it, you’ve already started to think about what you’ve got to work with, where you can save money and where you can make money. You may have already thought of everything mentioned above. But there may be one thing above that hasn’t occurred to you until now. And with the thousands of successful takeaways already up and running, a bit of creative thinking and good business sense can put you ahead of the game and more money in your pocket.