Starting a Food Business
Food businesses are a popular choice for budding entrepreneurs and business operators. Operating a food business from a fixed premises can be extremely hard work though; catering and hospitality involves long hours and hard work! Did you know that up to 50% of restaurants can fail in the first year of trading? Longevity is also a challenge; even famous and well established brands find it difficult to adapt to changing circumstances. Still want to start a food business?
If you are thinking of setting up a food business for the first time you probably have an idea of the type of business you want to operate and where you want to set it up. Novices to the industry generally have less of an idea of the costs involved in running a food business; the costs of a lease, business rates, taxes, employment costs and even pension contributions. They might also be a little stunned by the depth of regulation surrounding a typical high-street business.
Before you make any commitments, obtain investment funding or part with any money I highly recommend that you write a comprehensive business plan. When researching your business plan you’ll need to need to examine several key areas; including marketing, location and labour (staffing) issues.
Location of Your Food Business
The location of a business is important for a whole host of reasons. A boutique restaurant with a highly expensive menu located a residential area with a high level of deprivation wouldn’t survive for very long! A restaurant with large capacity seating (for a high number of covers) will probably need to be located in an area with a high foot-fall and not be tucked away in a quiet area off the main commercial area. Issues like car parking are also important and access to passing trade. Once you have taken the leap and signed the lease you are stuck there so it has to be the right decision from the start. Plenty of large and experienced operators get the location wrong.
Do your research. If you are dead set on the style of cuisine you wish to prepare then look at the demographic of the area; determine the average spend, whether they are likely to choose your style of cuisine and whether takeaway/delivery is a possibility (if applicable). Look at the competition already operating; are they successful and is there room for you?
Staffing in Food Businesses
Staff can be your biggest expense. A well-staffed business will have greater overheads. The amount of preparation work you undertake and extent of food created from scratch will affect the amount of resources required. So too will the number of covers.
Chefs move about in the industry frequently and it is not uncommon for a whole kitchen crew to move on at the same time (or be poached from one business to another!). What would you do if your head chef left? Could you still operate? There is not an abundance of experienced staff who are committed and trustworthy. Being situated close to labour providers can be useful. It may also be worth investing time and training on some staff who live locally.
Seasonal locations (e.g. a pub on the river relying on outdoor dining) and seasonal cuisine (e.g. an ice-cream parlour) will also determine the availability of long-term employees.
Marketing your Food Business
Once you have a business you can’t expect people to just turn up unless they know that you are there and what you offer. If you already have a good reputation in the industry that makes the job of marketing a little easier but there is still work to do. Your marketing strategy will differ according to the particulars of your business. However, a good brand identity is something that will benefit all businesses.
Social media, local press articles, leafleting, special offers and direct campaign marketing are all methods employed by businesses. Takeaways, for example, operate very well through a combination of well-known national online third party ordering websites and door-to-door leafleting within a short radius of the business.
The Building Itself
When looking for a suitable premises, refurbishing or designing a new food premises, it is important to ensure that it is designed appropriately from the start. Taking over an existing food premises may help if it was set-up correctly (although first ask yourself why it is no longer operating!). The correct planning/land use permissions may also be necessary for you to trade legally.
It should provide adequate space for the kitchen and work area. It may need to house a great deal of equipment and kitchen fixtures as well as provide sufficient space for cooking and food preparation.
Depending upon the type and scale of the operation you may require separate storage room or areas and somewhere to store chemicals away from food. It is likely that toilet facilities will need to be provided for customers if food is to be consumed on the premises. Ideally they should be separate from staff facilities and there should be enough for the capacity of the premises. Similarly, size permitting, you may need to provide a small rest area for staff and area for them to store clothes and personal items separate from the kitchen.
The premises should be designed so that staff and customers are able to escape in the event of a fire. Suitable fire precautions should also be provided. A fire risk assessment may be required for the workplace. Your local fire authority can provide details of how this should be carried out.
There should be somewhere, ideally outside, to store rubbish generated by the business and you will need a commercial waste contract with regular collections (another expense, so think about waste minimisation at the planning stage).
The design and layout of your kitchen is important for maintaining good hygiene and the health and safety of employees on site. Wall and floor surfaces should be smooth, non-absorbent and easy to clean. Slips and trips are one of the most common forms of accidents in the catering industry so it is also important that the floor surface should be of a non-slip variety. Preparation surfaces should be easy to clean and suitably constructed.
You will need sinks for washing food and equipment and a separate wash hand basin for maintaining personal hygiene – all with hot and cold running water. The wash hand basin should be positioned so that it can be accessed easily by food handling staff. Sufficient space will be necessary for cold storage in the form of fridges and refrigerators.
You will probably need some form of mechanical ventilation if you are involved in cooking activities. Ventilation systems usually comprise filtration to remove odours and ducting to channel heat and moisture away from the cooking range. Planning permission may be required for some units. Your premises should be designed to permit effective cleaning but you should also consider issues should as the work flow in order to prevent clean areas becoming contaminated and to prevent cross-contamination.
Before you start to trade you will need to put in place a food safety management system based on HACCP principles. The law requires you to analyse your business, identify potential hazards and put in place controls to ensure that those hazards are controlled. You are also required to keep records. The complexity of the documentation depends upon the size and nature of your business. As well as the operator or manager of the premises being suitably trained food handling staff will need to be suitably trained or instructed in food hygiene for the tasks they carry out. Some level 2 food hygiene courses will provide this basic training. You will also need to instruct food handling staff in the parts of your food safety management system that they are expected to carry out.
Occupational Health and Safety
There are a number of health and safety responsibilities that apply to employers. You will need to take out employers’ liability Insurance for example and provide basic legal information to workers. You may need to document your health and safety policy. A health and safety policy sets out your objectives and the arrangements you have put in place for managing health and safety in your business. It provides basic information stating who does what, when and how. You may also have to document the findings of your risk assessments. A risk assessment is simply an examination of what, in your work, could cause harm to people. It means you can weigh up if you have taken enough precautions, or if you should do more to prevent harm. Once it has been completed you must act on the findings of your risk assessment, by putting sensible controls in place to prevent accidents and ill health and making sure they are followed. Concentrate on the areas that could pose the most risk or harm, for example:
- Arrangements to prevent slips and trips
- Preventing musculoskeletal issues
- Safe use of equipment such as fryers or slicing machines
- Electrical safety
- Gas safety
- The safe use of chemicals
Once you have conducted all of your risk assessments you must train staff in what is expected of them in order to ensure that they work safely and without risks to health. Despite all of your careful planning sometimes accidents can sometimes happen. Where they do you may be under a legal obligation to report them.
The descriptions, advertising and information you provide about the food you sell should be accurate. It is important not to mislead consumers as to the nature, quality or substance of any food you sell. You should also ensure that any of the suppliers you use are reputable. It is not recommended, for example, that you accept goods like meat or alcohol from cold-callers. You should always be able to provide proof of where any food came from and, if you supply to other food business, keep details of who you supplied, with what and how much (this is referred to as ‘traceability’). There are some requirements that relate to the size and weight of goods that you sell such as alcohol measures.
Rules apply to the sale of certain products, such as alcohol and tobacco as they are age restricted products. You should have an underage sales policy in place and ensure that staff are trained in its implementation. The sale of age restricted goods to under-age persons is taken very seriously and can lead to the revocation or suspension of licences as well as prosecution.
It is unlikely that you will be trading out on the street but if you do you may need a licence to do so. Licences are also sometimes needed if you occupy space on the highway outside your premises; particularly where you put out tables and chairs for customers or advertising boards. Best to check with the licensing authority first. Space is at a premium so this is something to consider carefully; although, if the view is lack lustre and the traffic fumes are dense you may wish to concentrate on luring diners inside.
Noise and Nuisances
Noise nuisance is an issue that can be considered at an early stage and complaints by neighbours can be avoided by considering appropriate controls at the planning stage. Sources of noise may include music, equipment, and customers (particularly outside). Nuisances can also be caused by excess cooking odours and rubbish. It is important to look after your neighbours carefully; particularly if a licence is needed to trade or sell alcohol (which can make up a considerable portion of the business income).
That was just a little taster of what is to come if you decide to embark on a journey into the world of catering and start a food business.