How to start a food business in the UK

Starting and running a baking business can be both exciting and challenging. While the reward of turning your passion for baking into a successful business is undeniable, getting started takes work. Hopefully, this list will make it easier.

1. What should I do first?

It might be boring, but a business plan is always a good place to start. A good business plan guides you through each stage of creating and analysing your potential business. For the business plan, you will need to answer questions like:

Who is my target market?
How can I find them?
How much will it cost me to make my products?
How much can I sell my products for?
Who are my competitors, and how do they run?

Once you have answered these questions, your business plan will act like a GPS for how to run and grow your new business.

2. Choose your business structure

Now that you've got a plan, let's take the first step and set up a business. In the UK, you have a few options for how to structure the business. With each of the different options, there are legal requirements you will need to follow. The options are:

Sole trader - The business owner is entitled to keep all profits but liable for all losses.
Partnerships - A business shared between two or more individuals who share management and profits.
Limited company - A more formal business structure that creates a separate legal identity but has additional accounting and legal requirements.

For most new businesses, a sole trader is the easiest to start, and once the business has grown can be transferred to a limited company.

3. Register your business

Once you've decided on a business structure, you'll need to register your business, so your premises can be approved for food preparation.

Remember! When you start a new food business, you must register with your local authority at least 28 days before you start trading. Registration for your food business is free. There is a lot of helpful information and videos to help with your registration provided by the Food Standards Agency.

Depending on your business structure, there may be additional registration required.

Sole traders - You only need to register once you meet certain criteria
Partnerships - Must be registered with HMRC
Limited companies - Must be registered with companies house and HMRC

4. Open a business bank account

To make your life easy, opening a separate bank account for the business is best. Here are some excellent free options that we have used.

5. Obtain any licenses and permits

Depending on the type of food business you're starting, you may need to obtain special licenses and permits to operate legally. For example, if you plan on selling alcohol, you'll need to apply for an alcohol license. If you are running your business from home, you must ensure the appropriate permissions are in place. You may need to check with the following:

your mortgage company or landlord
your local planning authority
home insurance provider

6. How do I comply with health and safety regulations?

In the UK, food businesses must comply with various health and safety regulations to ensure the safety of their employees and customers. These regulations require food businesses to track that their food products are safe. Additionally, food businesses must maintain a high standard of cleanliness and hygiene in their premises and equipment. Food handlers must receive adequate training on food hygiene and safety and follow strict personal hygiene guidelines. In addition, employers must provide a safe working environment for their employees and carry out regular risk assessments. Products sold must also be correctly labelled with allergen details. See the Food Standards Agency for more details.

7. How do I protect myself?

It's essential to protect your business with the right insurance coverage. Insurance will help you to mitigate the financial risks associated with running a food business, such as liability for food-borne illness or damage to your premises. There are many different types of insurance that you could need:

Public liability insurance - If a customer became ill after consuming a product and made a claim, it would protect you even if you don't feel it is your fault.
Product liability insurance - If you sell to a supermarket and their customer found a sharp object in their meal, even if they're not injured, then this insurance would cover your legal defence and any settlement.
Business interruption insurance - If you cannot operate due to an unforeseeable circumstance (e.g. your oven breaks down or a global pandemic), then this insurance covers the loss of income during this time.

You can get quotes using Simply Business

8. Let's shout about it

Promoting your business can be done through various methods, including digital marketing, networking, and traditional advertising. One effective strategy is establishing a solid online presence by creating a website and social media accounts for your business. Utilise these platforms to share information about your products or services and engage with your target audience. Networking events and industry conferences can also be a great way to connect with potential customers and partners. Additionally, consider traditional advertising methods such as print or broadcast ads or flyers to increase brand awareness in your local area. Establishing a clear and consistent brand message across all marketing materials is also essential.