Using a Pub/Restaurant kitchen to start a food business: What’s a Fair Deal?

[pomalo]

Hey everyone,

Sorry for the long post! I've tried to keep it as short as possible, but there's quite a bit to cover.

I’m hoping to start a small food business in Greater Manchester, making Croatian/Balkan bakes and desserts, and eventually some traditional dishes.

I thought the best option would be to find a local pub or restaurant that opens around lunchtime or later in the afternoon (and there are quite a few) so I could use their kitchen during the hours they're closed.

The thing is, I don't have any actual start-up money atm, and I also have some health issues which limit how much I can work, so it would be only a couple of hours a day anyway.

My thinking was to start small, taking occasional pre-orders through social media and offering whatever I manage to prepare, with collection at an agreed time. It's not going to be a regular service to begin with, but it's a way of getting started and hopefully building things up as I go.

There's also the question of food business registration. I've already spoken to the council and they said I need to find suitable premises and the address first, so I'd need a venue that's happy for me to use it's address for registration, as well as letting me use the kitchen.

So basically they would be providing the kitchen, utilities and possibly a bit of fridge or storage space. I'd bring the ingredients, do the preps and baking, and clean up afterwards.

Unfortunately I can't afford rent or a deposit at this stage, but I'm not expecting to use their facilities for nothing either.
I'd be happy to discuss contributing towards costs, or possibly paying rent further down the line if things take off.
I also got a few ideas that could work well for both, like putting on the pop-up food event at the venue further down the line. But for now, I’m just trying to work out what would be a fair way to get started.

Would it make more sense for the venue to buy some of my finished products from me at an agreed price and sell them through its own till, while I sell other products directly to my own customers through social media and my own payment system?

How would I work out the prices for the products supplied to the venue?
What should I take into account so that I cover my ingredients and time, the venue has enough room to make its own profit, and there's also a fair contribution towards their kitchen, utilities and storage?

And how the registration side works when two separate food businesses are using the same kitchen (IF!) and what we'd need to sort out in terms of insurance, invoicing, tax, etc.

I know it's quite a few things, but I got to have a better idea of how this could work before approaching anyone.

If you've done something similar, either as a venue owner or as someone starting out, I'd really appreciate hearing how you arranged things, what worked and what you'd do differently.

Thanks very much!

 

[AI Helper]

Registration and the shared kitchen
Two food businesses operating from one kitchen is common and the council will treat them separately. You register your own business with the local authority (free, at least 28 days before you start trading) using the pub's address as your premises. You'll get your own inspection and your own hygiene rating, so keep your own Safer Food Better Business pack, your own temperature records and your own allergen matrix. A Level 2 food hygiene certificate is cheap and worth having before you approach anyone, as it shows the venue you won't be a risk to their rating.

Structuring the deal
Your two-strand idea is sensible, and it's worth separating them clearly:

• Wholesale supply: the venue buys finished goods from you at a trade price and sells on through their till. You invoice them, they own the stock.
• Kitchen use: for your direct pre-orders, offer a percentage of those sales (5 to 10% is a realistic opening position) or a small fixed sum per session instead of rent. That's your "contribution" and it scales with how well you do.

Put both in a simple written agreement covering hours, cleaning standards, storage space, notice period and what happens if either side wants out.

Pricing the wholesale side
Cost every recipe properly: ingredients, packaging, labels, and a realistic hourly figure for your time. A rough rule for bakery items is that ingredients should be no more than a third of your trade price. Then check the venue can add 60 to 100% on top and still land at a price their customers will pay. If those numbers don't both work, the product isn't right for that outlet yet.

Insurance and tax
You need your own public and product liability cover (a few pounds a month for a small operator). The venue should tell their insurer another business is using the kitchen. Register as a sole trader with HMRC once you pass the £1,000 trading allowance, keep every receipt, and invoice the venue monthly so there's a clean paper trail for both of you.