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starting a food business from home
11 min read

Starting a food business from home | Home food delivery business

Just Eat, Deliveroo and Uber Eats have changed the game when it comes to ordering takeaway food. With this, we’ve seen the emergence of a new kind of takeaway business run from people’s homes and kitchens. As an increasing number of at-home cooks and bakers look to turn lockdown hobbies into a source of revenue, this article will look at what’s involved in getting set up and compare the different options available to you.

Why should I start a home food delivery business?

Is food your passion? Are you looking to carve out a culinary career for yourself? But hesitant to commit to high street premises during these turbulent times? Then starting a food business from home could be your perfect recipe for startup success.

Here are a few reasons why starting your own food business from home is considered one of the best startup business ideas you can try:

  • The UK catering sector is one of the very few industries that isn’t dominated by a handful of big companies. That means getting your foot through the door can be very achievable.
  • Starting small from home offers the opportunity for greater flexibility with your budget, as you avoid having to make any hefty initial investments.
  • You can experiment more with your menu and quickly respond to opportunities. 
  • As you’re operating as an online business, it’s easier to refine your branding and marketing

Although your premises will be smaller when running a home takeaway business, you’ll quickly find you’ll have more breathing room to test, refine, and learn what works best. In addition, there are a whole host of processes and software that will help run your business more efficiently and cost effectively.

How else can I find the right food offering?

Food trends come and go – what’s important is that you’re keeping your ear to the ground when it comes to your local customer base. Popular dishes can vary from area to area and, sometimes, seasons.

  • Conduct local market research

    Before deciding on your offering, you need to have a strong grasp of your target market, and the current local takeaway environment in your area. Once a customer has found their perfect takeaway match (whether it’s a dish or takeaway business as a whole) it can be difficult to shift their allegiance elsewhere. Keep this in mind when planning your positioning – is there an untapped market that isn’t currently being catered for in your area? Why compete when you might not need to?

    • Begin by speaking to your local community – what are their favourite takeaway cuisines? Dishes? 
    • Do they feel their tastes are catered for?
    • Do they have a set of go-to places for takeaway food or do they like to try new places?
    • How much would they be prepared to pay for a takeaway dish?
    • What do they value most about takeaway food?
    • Where’s the first place they look when searching for a takeaway service? Google? Social media? Local Facebook group? A delivery service mobile app? Local newspaper? Ask a friend?
    • Research local takeaway providers – what are their reviews like? Take note of the areas that are listed in both positive and negative reviews as these are the things that matter most to your target market e.g. how quickly food is delivered, how hot the food is on delivery, the quality of ingredients, etc.
    • Some delivery companies that you might decide to partner with offer insightful customer data analysis, which could further inform your operations. For example, Just Eat provides partners with significant amounts of non-personal data such as customers’ food preferences in specific locations to allow restaurants to tailor menus.
  • Try and find a niche

    Food trends are still worthwhile keeping an eye on – as they can flag a potential untapped niche customer base in your local community. Many successful entrepreneurs recommend specialising or niching down to succeed. The idea is that if you build your business around a specific theme, it’ll be easier to become known.

    So, whether it’s meal-size sandwiches, fine freezer food or dishes championing British seafood, keep a theme or specialty in mind when conceptualising your food dream. A unique idea or specialism will help give your small business a leg up above the crowd of the 6 million small businesses in the UK.

  • Think about your skills and commitment

    Don’t forget the reason you’re doing this – your passion for food, your desire to run your own business, doing what you love on a daily basis. Running a food business demands a lot of enthusiasm, energy and time – involving long, unsociable hours. You need to be committed to turning your dream into a lucrative reality. You’re not only up against the major takeaway brands, but other hard working small businesses who are also trying to make themselves appealing and profitable without spending a large amount of cash. 

    Where do your skills lie? It’s all very well discovering there’s a huge opportunity to sell vegan food locally but if your interest lies elsewhere, you might find yourself struggling to commit to a business which doesn’t have your heart at the centre of it. For example, do you cook family dishes that have been handed down through generations? This in itself is a unique selling point! Do your market research, but don’t lose sight of your passion and where your skill set lies. Could you put your own spin on a niche opportunity e.g. Vietnamese vegan food?

What licenses do I need to start a takeaway business from home?

Given the health and safety implications of getting it wrong, running a home takeaway business comes with a range of regulatory requirements. Click on the dropdowns below to reveal more. 

  • Food safety and hygiene regulation compliance

    It is essential that you meet specific food hygiene requirements to keep your customers safe. By ensuring the food you serve is safe to eat will help prevent food poisoning. When setting up your home takeaway business from home, you must introduce ways of working that will help ensure good food hygiene is in place from the start.

    Food hygiene: There is clear guidance from the Food Standards Agency in regards to food hygiene – including “the 4cs” – cleaning, cooking, chilling and cross-contamination – storing food safely, transporting food safely and more.

    Food safety: Food safety management is about complying with food hygiene and food standards. You must ensure that you have food safety management procedures in place. You must make sure:

    • food is safe to eat
    • you don’t add, remove or treat food in a way that makes it harmful to eat
    • the food is the same quality that you say it is
    • you don’t mislead people by the way food is labelled, advertised or marketed
    • A list of your responsibilities can be found here.

    Failure to comply with food safety and hygiene regulations could result in a financial penalty or even a prison sentence.

  • Food business registration and approval

    You must register your new food business with your local authority at least 28 days before opening. It will only take a few minutes, is free and can’t be refused. Food law requires the registration of activities where food is supplied on a regular and organised basis. Once registered, local authority officers will arrange to visit your home to conduct a food hygiene inspection, which assesses your food preparation areas and food safety procedures to ensure they comply with food law and produce food that is safe to eat.

    You must have your premises approved by the council before you undertake any activity.

  • Food Hygiene Rating

    The Food Hygiene Rating Scheme (set up by the Food Standards Agency in partnership with local councils) gives businesses a rating out of 5 so that consumers can make informed choices about where to buy and eat food. After inspecting your food business, your local authority will publish your rating online. All businesses should be able to achieve the top rating of 5. If you do not, the food safety officer will outline the improvements that you need to make and will advise on how to achieve a higher rating. If your rating is good, you should display and promote it, as it shows how seriously your business takes food hygiene standards. Even if you don’t display it, customers can search the FSA website and make a judgement call from there.

    Your rating will be based on three key areas:

    1. How hygienically your food is handled e.g. how it’s prepared, cooked, reheated, cooled and stored
    2. The condition and structure of your building e.g. handwashing facilities, pest control, the layout, lighting and ventilation
    3. How your business manages and records what it does
  • Level 2 Food Hygiene Certificate

    This is required if you prepare open high risk foods. You must have training to a level equivalent to the Royal Society for Public Health (RSPH) Level 2 Award in Food Safety and Catering within three months of starting work. A quick Google will point you in the right direction of a variety of affordable course options, such as CPD Online College costing £20+VAT, while Virtual College charges £15+VAT.

Aside from licences and qualifications, are there any other practical start-up requirements?

You may need permission or separate insurance to run a home business, and you’ll need to check if you have to pay business rates. You can find guidance on Informi on all the considerations around running a business from home, which includes:

starting a food business from home

Deliveroo, Just Eat and Uber Eats – which food delivery company should I choose?

Using a third party delivery company such as Deliveroo, Just Eat and Uber Eats, will certainly make your life logistically easier during the hectic days of launching a small business. They will lighten the delivery load so you can focus on the quality of your product and other key business areas. Not only that, but these platforms will help market your business for you – something which you might not have time or budget for when establishing your menu and getting essential licences and qualifications in place.

However, these benefits come at a cost. Sign up fees, commission % per order and delivery fees all add up. Click on the dropdowns to reveal more. 

  • Deliveroo

    Deliveroo claims to be the ‘UK’s favourite delivery partner’ – with 140,000 restaurants/takeaway businesses signed up to their services. 

    • Sign up fee: Around £500 (includes professional photography, a tablet, a wireless printer and up to 20 branded extras to help promote your business)
    • Commission: 10-20% per order
    • Delivery fee: £2.50/order

    Sign up to Deliveroo

  • Just Eat

    Just Eat claims it can put your takeaway business ‘in front of more potential customers than anyone else’ – with more than 12 million hungry people accessing their services every month.

    • Sign up fee: £295
    • Commission: 15-30% per order
    • Delivery fee: £0.50 per order

    Sign up to Just Eat

  • Uber Eats

    Uber Eats claims it can help your takeaway business ‘unlock new growth’ and ‘manage it with ease’ using the Uber platform popular with drivers and riders around the world.

    • Sign up fee: Around £300-430 depending on the package you choose
    • Commission: 14% per order
    • Delivery fee: £2.50 per order

    Sign up to Uber Eats

Deliveroo, Just Eat and Uber Eats – what are the pros and cons?

While these fees might be a hefty sum to swallow, it’s important to assess the pros and cons for your business right now. (They might change over time.)  

Multiple lockdowns have not only accelerated customers’ online shopping habits, but their growing reliance on food delivery apps. Just Eat saw its revenues grow 54% during 2020 compared to the year before, taking it in excess of a staggering £2billion. For its UK operation, it delivered 179m meals – up 35%. Deliveroo saw the amount of transactions processed on its platform rise 64.3% in 2020 over the previous year to an eye-watering £4.1bn.

The numbers don’t lie – these platforms provide an excellent launch pad for your new, unknown business. They are successful in reaching out to people with their big marketing budgets and are great platforms for reaching new customers, generating more orders, increasing your revenue and brand awareness. 

Other than the fees, cons can range from the customer service side being somewhat out of your hands to payments taking time to transfer to your bank account.

Deliveroo, Just Eat and Uber Eats – what are the next steps?

It’s worth reaching out to each platform to discuss your specific requirements and to hear exactly how the relationship would work and to see a demo of the platform. Liaising directly with the company at this early research stage will also be a good test run in how the company liaises with its clients, how easy they are to get hold of, etc. Once you’ve completed your research and worked out your personal pros and cons, you might find that, while fees can be high, it’s worth trialling rather than standing on the sidelines and seeing other local competitors capture customers through these trusted apps. 

Top tip: Some delivery companies’ sign up fee isn’t typically payable until you start earning money. Make sure to check this with the company during your research.

Is there an alternative to using Deliveroo, Just Eat and Uber Eats?

If you want to avoid hefty commissions from delivery companies and have the means to deliver your own food – or want to encourage customers to collect their orders from you – then it’s worth considering online ordering systems/order and pay apps. Either integrate an online ordering system into your website or use a white label order and pay app supplier to host your digital menu and process payments. These platforms are cheaper, take less commission, yet give your customers a way to order their food directly through you. Some online ordering systems even offer their base package for free and simply take a percentage of every transaction made through the system or app. Once set up, orders will come straight through to your phone. While a more affordable option, you’ll need to use some smart marketing tactics to attract local customers to buy directly from you.

Some examples: 

A quick Google will quickly inform you of other options, plus the set up fee / additional fees for each.

Top tip: During your research, there could be optional services that you might need to pay for access to e.g. advanced marketing services. Keep an eye out for them before signing up to anything.

How do I make my home food delivery business a success?

  • Due to high competition, many successful entrepreneurs recommend specialising or niching down to succeed. Consider this as part of a clear business plan.
  • Get clarity on your idea and troubleshoot any potential problems that could occur.
  • Set yourself goals – how will you achieve them? 
  • Know someone already in the industry that wouldn’t mind sharing their experience and learnings with you e.g. a friend or family member?
  • As explored above – get the right licences and qualifications in place before operating. You must ensure the safety of your customers and yourself (employees should you expand). Prioritise health, safety and compliance. Brush up your knowledge on general food law and ensure you’re always acting in the safest manner possible.
  • While there will be few initial upfront costs as you’ll already have most of the equipment in your kitchen already, be mindful of reinvesting a portion of your profit into key areas of your business that will help it succeed and grow.
  • Understand your target market. Never stop learning about who you’re selling to and local marketing techniques to put your brand in front of them.
  • Keep on top of your finances with accounting software. When you start taking orders, and payments, you’ll need to start tracking your spending, revenue and profit. Here’s how to choose the best accounting software for your small business.
  • Get active on social media. A great way to target local customers and build your brand. 
  • Test and refine. Make time to step back and analyse your data and review customer feedback. Take informed next steps for smart growth.
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