People love eating fish and chips served from the many thousands of takeaway and eat-in fish and chip shops in the UK. Get the essentials for starting up and running your own fish and chip shop from our practical guide.
Research your target market
Estimating the number of customers
It's very important that your proposed fish and chip shop will have lots of people passing by - known as 'passing trade'.
To estimate the level of passing trade, count the number of people walking past the proposed location of your shop at lunch time (say between 12.00pm and 2.00pm). Do the same in the evening. Try to repeat this exercise on several different days.
What type of people walk past or near to your shop? Are they mainly office workers, tourists or people doing their shopping? Does this vary at different times of the day?
Walk or drive around the area in which you propose to open your shop. Make a note of the types of buildings in the area. Pay special attention to buildings like offices, colleges and factories - any places which will bring large numbers of potential customers into the area. Also look out for apartment blocks and housing estates. Don't overlook nearby caravan and camp sites - make a note of when they are busiest and quietest.
Remember - areas in which there are many offices and factories may be very busy at lunch times, but dead during the evenings. The opposite may be true of residential areas.
Establishing the level of competition
Once you have decided who your customers are and established your potential market, you need to find out how well it is supplied.
How many other fish and chip shops are there in your area? What about other fast food outlets and cafes? Are there any mobile take-away businesses that regularly operate in the neighbourhood? Walk or drive around the area and make a note of other shops selling fast food within, say, a ten minute walk of your own proposed location.
Make some notes about your competitors. Try to include details of:
- the type of outlet (for example fish and chip shop, burger bar or cafe)
- the type of food that they sell - how large a range do they offer
- what size are their portions? You could buy a portion of fish and chips and take it home to weigh - it is important that the portion sizes in your outlet are not too small
- whether they offer 'meal deals', for example to attract the lunchtime trade
- their opening hours
- other details, for example do they offer eat-in or just takeaway facilities? Are they smart, upmarket in appearance, or do they seem rundown and old fashioned
- their hygiene rating, if this is displayed
Make a note of the prices charged for certain popular items (for example large chips, cod portion, pasty, tea, cold drinks and so on). If possible, try also to observe what types of things people buy and when - you may notice that a pattern emerges.
Try to be thorough. Remember that hot take-away food is now available from lots of different outlets - try petrol station forecourts, convenience stores and supermarkets. Remember too that fish and chips appear on the menus of many pubs, cafés and restaurants. Search on the Just Eat and Deliveroo websites for details of food businesses offering a delivery service in your area. These will also be your competitors.
Check to see whether any of your potential competitors have a TripAdvisor listing - if they have, look at the rating they've been given and read the customer reviews. These will help you find out about your competitors' strengths and weaknesses.
Don't forget that market research can be ongoing. Once your shop is open, talk to your customers. Find out what are their likes and dislikes. Note down which items on your menu are popular and which ones don't sell well. Think about introducing new ranges from time to time - and monitor how much you sell.
Research current trends, plus legal and tax issues
- Sector trends for fish and chip shops
- Legal issues for fish and chip shops
- VAT rules for fish and chip shops
Decide what to sell
Eat-in or takeaway
An important decision to make is whether you will sell meals to eat in as well as to take away. Space is an issue here - you will need more space if you want to offer eat-in facilities. You'll probably need extra staff as well.
How big will your menu be
You may decide, like some traditional chip shops, to focus heavily on fish and chips, with a range of side dishes such as mushy peas and a few alternatives to fish like pies and sausages. You might offer a choice of fish - favourites include:
Cod is the most popular choice in England and Wales while Scottish customers tend to prefer haddock.
Bear in mind that customers have become increasingly concerned to eat fish from protected or sustainable sources.
Some other types of fish you could serve include huss (dogfish or 'rock salmon'), pollack, hoki, ling, squid and even salmon. In some areas battered cod's roe is popular and both scampi and calamari (squid) feature on many chip shop menus.
Other typical chip shop items that you might serve include pies, pasties, rissoles, fish cakes, sausage rolls, sausages and so on.
You might decide to serve a range of other dishes. Pizzas, kebabs, burgers, jacket potatoes, hotdogs, soup and deep fried chicken pieces are now commonly served in chip shops. Some chip shops offer vegetarian products like veggie burgers, cheese and onion pasties and mushroom pies. Curries and Chinese dishes are also to be found served alongside fish and chips. Remember that you may need extra equipment to serve some types of food. Check that you have the space for this and consider whether you will sell enough items to justify the initial investment.
Other things that you might sell include small items like pickled eggs and sauce portions, hot and cold drinks (alcoholic if you have a licence), cakes and confectionery.
Think about what portion sizes you'll offer too - many chip shops serve both regular and large portions of fish and chips and other items. Remember that there's a lot of pressure now to produce less fattening meals. Cutting the size of the portions of chips makes a fish and chip meal less calorific and more attractive to people watching their weight. Think too about offering children's portions so that the whole family can eat out at a reasonable price. It might be an idea to offer easy to handle snack-type items like fish goujons for people who want to eat something on-the-go.
Estimating the average 'spend'
When you're working out your Cash sales, you need to make an estimate of how many items each person might typically buy. As part of your market research notice what happens in other fish and chip shops. This will help you to decide what the average 'spend' in your business may be.
For example, you may estimate that, for every 20 customers who buy a portion of chips at £1.95*:
- 4 will have fish or a similarly priced item @ £4.50 each = £18.00
- 6 will have a pie or a similarly priced item @ £2.75 each = £16.50
- 11 will have a soft drink @ £1.00 each = £11.00
- 4 will have a hot drink @ £1.50 each = £6.00
- 5 will have curry sauce @ £1.45 each = £7.25
- 2 will have mushy peas @ £1.45 each = £2.90
- 2 will have a buttered roll @ £0.65 each = £1.30
Based on the above estimates and prices, you would receive £39.00 from these 20 customers for the chips sold plus £62.95 for the other items, giving a total of £101.95.
£101.95 divided by 20 customers = £5.10 average 'spend' per customer.
*All figures on this page are included for illustrative purposes only
You'll need to decide what your hours of business will be.
When to open
You are likely to be busiest at meal times - lunch time and the early evening are the busiest times for most fish and chip shops. If you are located in a tourist region, or in an area where there is a constant flow of people past the shop (for example a busy shopping centre), you may find that there is a steady trickle of demand throughout the day. If, however, most of your customers are nearby office or factory workers, there may be little or no demand between traditional meal times.
Make sure that your shop will be open at all times when there is demand for fish and chips and other takeaway food. You may decide that it is only worth opening between, say, 11.30am and 3.00pm and again between 5.00pm and 10.00pm. Or you might decide to stay open all day.
You might be able to extend your hours of business by offering breakfasts, or by staying open late enough to cater for any nearby after-pub trade.
Remember that there are many jobs which will need doing each day - for example cleaning your equipment, preparing fish, mixing batter, peeling potatoes and so on. You could do these when the shop is closed - but if you want to open for long hours every day you will probably need extra staff to help you.
Seafish research shows that Fridays and Saturdays are the most popular days for eating fish and chips, but you will probably open six or seven days a week, depending on demand. If your shop is located in a shopping centre, for example, it may not be worth opening on Sundays (although Sunday trading is becoming more and more commonplace).
If you are going to open a shop in a tourist region, you may find that it is not worth opening during the winter months. Or you may decide to open during the winter, but to reduce your hours of business. To make up for the quiet winter season, you will probably open for long hours every day during the spring and summer months.
Buy an existing business
You might decide to buy an existing fish and chip shop rather than start your own venture from scratch. Buying a going concern can mean that the products, customers, regular sales, staff, premises and equipment are already in place.
Other matters to consider include:
- the food hygiene rating, if one has been awarded to the business - it can be hard to overcome a bad reputation (have a look at any Tripadvisor reviews too)
But buying a business can be a hazardous, expensive process unless you have the right skills and experience on your team, including legal and financial know-how. Establish the genuine trading and financial position, so that the price you pay for the business is not too high.
Acquiring a franchise is another alternative to starting up a new business from scratch. There are several franchise opportunities available for fish and chip shop businesses. Franchising means that you still start up your own business, but you can benefit from a well established brand and format. A good franchise will also offer business support and other useful services. However, all this comes at a price - the franchise fee that you'll have to pay to the franchisor.
Before entering into a franchise agreement, it's advisable to compare the terms of different franchisors to be sure that you're getting a good deal. Go through the contract with your solicitor before signing anything.