How to start a takeaway food business

Takeaway food service is a strong business option in the current climate, given the increase in demand for fast food and delivery. Opening a takeaway business can be very demanding, but also rewarding and profitable. As with any business that involves food, it's important to understand the Australian food industry regulations and develop a business plan before you start.

Read on to learn the key points of starting a takeaway food business in Australia.

What is a takeaway food business?

A takeaway food business provides meals or snacks for people to pick up and eat away from the premises, or in a shared eating location. A takeaway can also be a shopfront for food-delivery apps.

How to start a takeaway food business

Follow these steps for starting a takeaway food business:

1. Identify your niche. Identify the type of takeaway food that will sell well with your target customers. This may be healthy fast food or takeaway for nearby office workers. Work out who they are and what they are willing to pay. Look at your competition and consider how you might provide a unique offering based on service, price, type of cuisine or perceived quality.
2. Choose a business structure. You'll need to select a business structure that suits your goals and budget. For many business owners, operating as a Sole Trader or Partnership is a simple option, unless you join a takeaway food franchise or want to start a Company.
3. Write a business plan. Develop a business plan to set out your goals and track your progress. Include your own research on the competition, and your projected costs and profit. A business plan also helps to convince prospective lenders that your takeaway shop is worth investing in.
4. Find a location and buy equipment. You will need to find a suitable commercial space where you are allowed to sell food that is close to potential customers who enjoy your particular cuisine. Consider what might happen if your foot traffic is affected by a lockdown, or other restaurant and shopping centre closures. You'll also need to purchase or lease the relevant kitchen and serving equipment.
5. Create a brand name and logo. You'll also need a logo and name to promote your shopfront and online presence. If you don't have the budget for a graphic designer yet, you can use these graphic design tools and services to create your own logo.
6. Register your business. Most people will need to register their business name with the Australian Securities and Investments Commission (ASIC) and get an Australian Business Number (ABN).
7. Look at your loan options. You may need to apply for a loan to start your business if you rent a commercial space. If you can't access a business loan, you can also consider a personal loan option.
8. Food safety laws. In most states, it is mandatory or recommended to have at least one trained Food Safety Supervisor working for a takeaway business. You might need to get legal document templates or advice online. You may also need to speak to a Commercial Lease Lawyer and take out Public Indemnity Insurance.
9. Market your business. A strong online presence can help to bring new customers and generate word-of-mouth business. This can include maintaining your business listing and managing reviews on Google My Business and food review sites. Walk-in business is important for a shopfront in high-foot traffic areas, so invest in signs that reflect the tastes of your target customers. Flyer menus with discount codes are also an effective way to reach new customers in the local area.
10. Food delivery services. If you're running a less-visible shop, you might depend on food delivery services such as Uber Eats. You will need to invest in photography skills to take great images of your dishes for delivery apps, so customers choose you over the competition. Weigh up the cost of the commission taken by the app, and the amount of new customers and income that it may bring. Consider building a website or social media account to present an accessible face for your takeaway shop, especially if it links from a food delivery service app.

Identify your skills and knowledge

While there are no formal requirements needed to open up a takeaway food business, having experience in food and hospitality is highly valuable to all aspiring business owners. Whether it is serving customers, washing the dishes or preparing meals, even a few shifts will give you a taste of what it's like to operate a takeaway food business.

To thrive as a food business owner, you will need:

• Food skills. Even if you hire chefs, you'll need to understand how to achieve consistent quality of cooking with fast delivery.
• Business skills. Operating a takeaway food business requires making decisions in purchasing, finance, people and operational management, and marketing.

One of the first major decisions you'll need to make is what type of takeaway food business you want to start. With so many different options available, it's important to do your market research to create a business that stands out amongst your competitors and possibly target a niche audience.

Given the competitiveness of the industry, it's vital to create a business plan that outlines what your business is about and how you'll run it. Learning how to market your business is also critical when you launch and as you grow your customer base.

Get the right licences

In all the excitement of setting up your business, don't forget that there are licences and registrations you need to obtain first. The licences protect consumers and help you abide by the food hygiene and safety standards.

Every state will have different licensing requirements. As a general rule of thumb, you will need to notify and register your business with your local council or relevant health agency.

As part of the registration, you'll be asked questions like what types of food you'll be serving, who will be consuming your food, whether you have pre-packaged food and what type of food business you'll be running. You will also need to pay a fee and renew your licence every year or every few years.

Visit the Australian Business Licence and Information Service (ABLIS) to find out the process and forms you need for your takeaway food business.

As well as that, see the list below for the relevant governing body that handles food licensing and regulation.

Required courses or qualifications

All employees working in the food business are legally required to complete a Food Handler Course, which covers basic food safety and food handling. You can enrol in the course via:

• Online or classroom-based accredited training courses
• In-house training through an accredited consultant
• The use of manuals to instruct staff

In many states, such as NSW, VIC, QLD and ACT, it is also mandatory to have at least one trained Food Safety Supervisor working for your business. You can receive training and certification as a Food Safety Supervisor online or through a registered training organisation (RTO).

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Buy the right equipment and software

Setting up a takeaway food business requires a significant investment in assets up-front, starting with leasing or buying a building space to set up shop. The various equipment that you're likely to need may include:

• Commercial kitchen equipment, such as a stovetop, oven, walk-in cooler, freezer and cooking utensils
• Takeaway utensils, such as takeaway boxes and cutlery
• Fire extinguisher and other safety equipment
• Cash register or online payment system
• Tables and chairs, if you intend to provide seating

To operate the business efficiently, you may also consider software for managing tasks such as:

Choose a business structure

To register your company, you have to pick the type of business you're operating. The three most common business structures in Australia each have different levels of control, costs and tax implications:

• Sole Trader. The business's income is taxed as part of the sole owner's personal income. You have full control and responsibility over the business.
• Partnership. Partners are taxed on their share of the Partnership's net income. A Partnership is defined as two or more people who go into business together. All partners have equal control over the business.
• Company. The business assumes its own legal identity and is taxed at corporate rates. The major decisions are decided by shareholders.

Access legal documents and services online

It's important to have some legal documents in place before you start your company. These agreements can work to safeguard your firm and, in many cases, clarify your responsibilities as a business versus that of your customers or employees.

Documents that you may need to set up a takeaway food business include:

• Wholesale Agreement when buying in bulk to outline the terms and conditions of your relationship with the supplier, such as prices, quantity and quality of your orders.
• Insurance, such as Public Liability Insurance, Building and Contents Insurance and Employer's Liability Insurance.
• Employment Agreement if you're planning to employ workers.
• Website Disclaimer to protect your liability and copyright.
• Privacy Policy. An important notice that sets out how a customer's information will and won't be used on your website.

You can access a range of free templates and guidelines for writing your own documents. You can also get free legal quotes through websites such as:

• LegalVision
• Sprintlaw
• Lawpath

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How to find customers

From social media pages to online reviews, there are many ways you can grow your customer base and, in turn, sales. Some practical, easy-to-implement ways to do this include:

• Sign up your business to a third-party food delivery app, such as Uber Eats, DoorDash, Menulog and Deliveroo.
• List your business on Google My Business, with all the key information linked to your business.
• Social media engagement through Facebook, Instagram and others to attract and engage customers.
• Word-of-mouth offers another effective way to increase your customers.

How much to charge

How much you charge your customers will depend on a variety of factors, such as the cost of wholesale supplies and labour. As a general rule of thumb, the cost of the wholesale food supply should make up a third of what you then charge the customer. For example, if you pay $5 for the ingredients of a particular dish, then you might charge around $15 to the customer. While this may seem like a lot, remember that you are factoring in the costs of having someone prepare and serve the food, as well as other expenses like electricity, water and gas.

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Frequently asked questions

Is owning a takeaway food business profitable?

According to Restaurant & Catering Australia, the average profit margin of the restaurant, cafe and catering industry was 4.2% in 2019. Competition and costs are the main drivers for the industry's low profit margin. However, the good news is that takeaway food businesses have the distinct advantage of keeping operations leaner and costs lower compared to a full-service restaurant.

Ultimately, the success of a takeaway business comes down to many factors, such as high-quality food and service, pricing, brand/reputation, cash flow and so on.

How can I grow my takeaway food business?

The most sure-fire way to grow your business is to provide exceptional customer service. Marketing is also key when you're just starting out and this can be as simple as updating your social media accounts or handing out flyers. Another effective way to grow your business is to reach out to your customers for reviews and referrals.

Should I sign up with a food delivery app service?

Consumer demands for convenience accelerated by COVID-19 have increased the popularity of food delivery apps like Uber Eats and Menulog. If you're considering partnering with a food delivery app, make sure you research all the options available in your locale. Consider the percentage that the food delivery app charges from your business to see if this is a viable option for you.