How to start up a sandwich bar

Sandwich bars may sell made-to-order sandwiches and pre-packed items, as well as offering a delivery service to local businesses. You'll find all you need to start up and run your own sandwich bar in our practical guide.

• Research your target market
• Establish your customer profile
• Decide what to sell
• Decide what services to offer
• Fairtrade
• Promote your business
• Buy an existing business

Research your target market

When you plan your new sandwich bar business it's very important to research your market - how much potential demand there is and how well that demand is already being met.

Estimating demand

You'll want to make sure that there's enough demand for a sandwich bar in your area. Be aware that competition in the sector can be intense - sandwiches and other snacks are available from many other types of outlet. You're likely to face strong competition from some or all of the following among others:

• other sandwich bars, coffee shops and juice bars - including the big chains like Subway, Pret a Manger, Starbucks and Costa
• retail bakers (look out for Greggs shops) and delicatessens
• supermarkets and other large shops like Boots, Marks & Spencer and WH Smith
• cafes, take-aways, snack bars and pubs
• the major burger chains - many sell 'deli style' sandwiches too
• convenience stores, petrol stations and newsagents

Try to find out how many outlets there are in your area that already sell sandwiches and take-away food. A walk around the immediate locality will give you a good idea as to who's selling what.

Carrying out a head count on different days of the week outside an existing sandwich bar could help you to build up a picture of demand in your area. It'll also help you to find out how busy your competitors are at certain times of the day - and what days are likely to see heaviest demand. You could also do a footfall count outside your own proposed location at various different times of the day to get a feel for how much passing trade there's likely to be. Again, try to repeat this exercise on a number of different days of the week. Ideally, do this before you make a final decision on your premises.

Check out the local area to make sure there are enough potential customers nearby. For example, are you near to lots office buildings and businesses, or maybe a university or busy shopping area? Try to find out whether there's a sandwich business already delivering to local offices and businesses. If not, you could ask if you can advertise your range to their employees.

Checking out the competition

You'll want to make sure that plenty of customers will choose your sandwich bar rather than your competitors, so it's a good idea to visit your main competitors' outlets to find out what you're up against. You could visit each of your competitors during the peak lunch time period. Try to find out as much as you can about their businesses during your visit, including:

• how busy they are and how long it takes to get served
• whether they offer made-to-order or pre-packed sandwiches
• what range of fillings they offer and what types of bread they use
• what prices they charge and whether they have any special offers
• what other products they serve
• whether they offer eat-in sales as well as take-away
• what standard of service they offer

Also note down any other general impressions that occur to you. It will help if you're as thorough as possible when you do your market research.

Use your research to try to think of anything that will give you an advantage over your competitors. For example, your research may immediately indicate that there's a niche that none of your competitors cater for, such as offering Fairtrade or organic products. You might find that all the sandwich bars in your area have lengthy queues - this could indicate that customers would appreciate a sandwich bar that offers pre-packed sandwiches so they can buy their lunch more quickly.

Find out what people want

It's a good idea to talk to as many potential customers as possible before you open and ask them what they would look for in a good sandwich bar. This feedback can be invaluable in helping you to target your offer and provide an outlet that gives customers what they want. You could ask as many potential customers as possible questions like:

• what sort of breads and fillings they prefer
• do they prefer pre-packed or made-to-order sandwiches
• what other food and drinks they would consider buying
• what opening hours would suit them best
• what they think of your proposed prices
• whether they would use an online or telephone order service (if you are thinking of offering this)
• what, if anything, they dislike about other outlets that offer sandwiches in your area

Don't forget that market research can be ongoing. Once your sandwich bar is open, talk to your customers - find out what they like and dislike about your outlet. Note down which items on your menu are popular and which ones don't sell well. You could even have a suggestion box on the counter to encourage comments and suggestions to ensure that you continue to meet customer demand.

Making sandwiches for other outlets

If you decide to offer wholesale pre-packed sandwiches to other businesses like cafes and newsagents, or even to larger organisations such as hospitals, you could:

• count the number of potential wholesale customers in your area, say within a five to ten mile radius from your premises
• approach some and ask them if they would be interested in buying your sandwiches on a wholesale basis

When you get a positive response - either a definite "yes" or an expression of interest - ask them:

• what sort of fillings and other products they would want, and what price they would plan to sell them
• how many sandwiches they would want and on what days
• what profit margin they would look for - is this enough to cover your costs and profit

Agree who would bear the cost of any unsold sandwiches. If you offer pre-packed sandwiches wholesale to other retailers then it's usual to offer them a limited or full sale or return option.

Bear in mind that the pre-packed wholesale sandwich trade is very competitive. If you're going to persuade a potential customer to change their supplier you'll probably have to offer them a better range of products or improved terms of trade than they currently receive.

Research current trends, plus legal and tax issues

• Sector trends for sandwich bars
• Legal issues for sandwich bars
• VAT rules for sandwich bars

Establish your customer profile

The range of sandwiches, fillings and other products you offer, the location of your sandwich bar, and whether you decide to target the upper or lower end of the market will determine who your customers are likely to be. Your market research should help you to identify any gaps in the local market and the type of customer you should target. You may have several different types of customer, including:

• working people buying their lunch - particularly if you're situated near to a business area with many offices or an industrial estate. You may build up a core of regular customers but to retain them don't forget that office workers expect to be able to order in advance by phone, text or online and that they will find free wi-fi on your premises
• shoppers - if you're located in or near to a busy shopping area you're likely to be busiest on weekends and you may rarely see the same customer more than once
• students if you're near to a university or college
• holidaymakers if you're located in a tourist area
• business people who require sandwich platters for business lunches and members of the public wanting platters for functions
• other retailers if you wholesale ready-made sandwiches

Estimating the average spend

When estimating your income, you need to make an estimate of how many sandwiches and other food and drink products each customer might typically buy - and how much they're likely to spend on each visit. As part of your market research you could check out what customers normally buy when they visit other sandwich bars in your area. Does it vary depending on the time of day, day of the week or time of year? Use this aspect of your market research, and your proposed pricing policy, to estimate what the average spend per customer is likely to be. Recent research showed that in London the average price of a sandwich was about £3.50 while elsewhere the average was a little under £3.00. On average, people spend a little over £6 on their weekday lunch. The typical average lunch spend varies around the country, with Londoners spending £6.60 and people in Manchester (the cheapest) spending £5.50. At weekends people will spend more, with the average spend being around £7.00.

Special offers and discounts

To attract customers to your sandwich bar, and to encourage them to visit more often and buy more when they're there, you'll probably offer some special deals from time to time. You could, for example:

• offer a 'meal deal' where sandwiches, crisps and a drink are cheaper when purchased together
• operate a loyalty card scheme whereby customers receive a stamp every time they buy a sandwich - or equivalent product - and receive a free sandwich and drink when they have collected a certain number of stamps - say eight or ten
• offer introductory discounts on new products
• give discounts to students and pensioners

If you have any trade customers you'll probably offer them a discount as a matter of course. How much discount you decide to offer will depend on your pricing policy and on the level of local competition. If you offer sandwiches wholesale to other retailers it's usual to offer them a limited or full sale or return option.

It's important that you keep a close eye on any special deals you offer to make sure they're working for you. Don't forget that special offers and discounts can affect the average spend per customer.

Make sure that any staff you have are clear about what special offers are available at any given time. They'll need to know who's eligible for a discount and how they can get. Think about how much discount - if any - you'll allow to your staff and what if anything they can eat on the premises free of charge.

Decide what to sell

Most of your income is likely to come from the sale of sandwiches, baguettes, rolls and so on. Sandwiches are very versatile and there's a huge range of fillings that you could offer your customers, from popular traditional fillings to more imaginative and exotic options. There's also a wide range of different breads available, ranging from traditional white and wholemeal breads and rolls to wraps, baguettes, ciabattas, paninis and bagels.

Your market research should give you a good idea of what fillings and breads might be popular - and of which end of the market you should target. You may have noticed that there's a gap in the market that your outlet can fill. For example, maybe no other outlets offer sandwich fillings made from locally sourced organic produce. Perhaps there's demand for gluten-free or dairy-free sandwiches, low calorie options, or for vegan products. At the end of 2015 Pret a Manger introduced a vegetarian range. While meat remains a very important filling, they expect the vegetarian range to prove popular, particularly sandwiches with avocado fillings, and sales are expected to grow.

Think about whether you'll offer eat-in sales as well as food to take-away. Space is an issue here - you'll probably need larger premises if you're planning to offer eat-in sales and you may need to take on extra staff. Current bye-laws govern the requirement for providing toilet facilities so you should ask your local council for guidance on the legal position in your area. Some councils insist that a cafe with any seating must provide toilets while others require the provision of toilets only where there are more than ten seats. Also consider whether you'll offer pre-packed sandwiches, made-to-order sandwiches or a mixture of both. Once again your market research should give you an idea of what would attract more customers.

Drinks and other products

Strong competition means that just offering a range of sandwiches and drinks probably isn't enough. There are very many other products you could offer to appeal to a wider range of potential customers and to set yourself apart from your competitors. As well as your range of sandwiches, you might decide to sell some of the following:

• hot drinks like continental coffees and a variety of teas
• cold drinks such as bottled water, soft drinks, fruit juices, smoothies, milkshakes and so on
• breakfast foods like porridge, croissants, egg rolls and prepared fruit - research in 2016 showed that a third of people now eat breakfast out
• toast, teacakes, Danish pastries and so on
• a range of pastry products such as sausage rolls, pasties, pies and quiches
• hot food - this might include toasted paninis, soups, and jacket potatoes. Hot foods sell particularly well during the colder winter months but can cause queues if they take time to cook or heat up
• pre-prepared salads and pastas
• snacks like crisps, cereal bars and confectionery
• organic and Fairtrade products including coffee, tea, fruit and fruit juices
• desserts - for example cakes, yoghurts and ice creams

When thinking about what other products you might offer, it's worth considering:

• whether there's enough demand for the extra products you plan to offer - or if you can create it
• the amount of space your premises has and where you will display any extra products - for example, will you have room for an extra chiller, or for cooking and heating equipment if you decide to offer hot food
• where you will purchase your additional stock from - will you be able to get it from your current suppliers
• whether wastage will be a problem if you plan to sell many perishable items

Because the take-away food industry and the lunch-time market are so competitive it's important to keep up with changes in consumer preferences. You should probably introduce new menu choices at fairly regular intervals. But it goes without saying that you should take care not to replace any customer favourites.

Decide what services to offer

Although your sandwich bar will probably be open for most of the working day, in many areas you're only likely to be really busy for a two hour period around lunch time - this will be your peak sales period each day. It's a good idea to be fully prepared for the lunch time rush when speed of service can be vitally important. You'll want to be able to serve as many customers as possible during this period and you don't want potential customers to be put off by the sight of long queues.

As the freshness of products is key in the sandwich trade - both from a hygiene and presentation point of view - you'll probably use the morning to make most of your pre-packed sandwiches, fillings and any other products that need advance preparation. This can enable you to serve more customers and avoid the build up of queues at peak times. You may decide to provide your customers with an ordering service by phone, text or email. You can make up these orders during the morning, in good time to be delivered or collected.

The afternoon is likely to be much quieter, although you may get some late lunchers and, later on, some customers looking for an afternoon snack. The afternoon can be a useful time to make up any fillings and other products that can be safely stored for a day or two and to generally catch up with cleaning, stocktaking, ordering supplies, bookkeeping and so on.

Made-to-order sandwiches

You can offer your customers pre-packed sandwiches which you prepare and package in advance or you can offer made-to-order sandwiches. You may, of course, decide to offer both. You could make up a range of sandwiches and display them in a chiller for customers who are in a hurry and offer made-to-order sandwiches for people who have a bit more time. There are advantages and disadvantages to both options, but your market research should give you some idea of which would be most popular - and profitable - in your particular location.

If you plan to make sandwiches to order, it can be a good idea to time yourself making various sandwiches to find out approximately how long it will take you - or a member of staff - to serve a typical customer. This will give you a rough idea of how many customers you will be able to serve in an hour.

Running a delivery service

You might decide to run a delivery service and deliver sandwiches to local workplaces in time for lunch. If you do, there are two options available to you:

• making up a range of sandwiches 'on spec' before lunch time and taking them and other products to places where you expect there to be demand - such as local offices, factories and so on
• providing your customers with an ordering service by phone, text or email and then delivering orders in time for lunch

Generally your delivery driver will collect the money when the sandwiches are delivered - or sold on spec. You'll need to make sure that you have trustworthy staff and good record keeping systems in place. You'll also need to make sure that whoever makes the deliveries has a cash float so that they can provide change.

Minimising wastage

It's essential that the ingredients you use are fresh and in peak condition. It's inevitable that you'll suffer some wastage each day because almost all the ingredients you'll use are prone to spoiling very quickly. Wastage may also occur during the preparation stage if your staff are careless or inconsistent with the amount of fillings used. Try to minimise wastage by training staff in correct handling techniques, cold storage procedures, efficient use of ingredients and portion control. Some wastage will be caused by the fact that you won't sell every single item every day and some stock can only be kept for a day or two at most. To cut down on this type of wastage you may reduce availability and run down stock after the key lunch time period. It's a good idea to reduce the price of unsold sandwiches towards the end of the day to try and get something for them rather than throwing them away.

Other services

Think about whether there are any other services you could offer to attract customers away from your competitors. For example, maybe no other outlets in your area offer eat-in facilities (remember, though, to ask your local council for guidance on the legal requirement in your area for the provision of toilet facilities for eat-in customers ). You could have some tables outside, although you'll probably need permission for this from your local highways department. You could provide wifi internet access by setting up your own hotspot - this is very popular with sandwich bar and cafe customers.

Fairtrade

Recent years have seen an increase in consumer demand for ethical products that help producers and farmers in the developing world. You could meet this demand by offering a selection of Fairtrade products such as teas, coffees, fruit juices, fresh fruit and snack bars from the large range of food and drinks available. This would show your customers that your business is ethically aware and committed to fighting global poverty. Offering Fairtrade products can also be a good way of differentiating your business from its competitors.

What is Fairtrade

Fairtrade guarantees a fair deal for producers and farmers in the developing world by making sure they receive a fair price for their goods and products. Fairtrade items are generally slightly more expensive than similar products - but more and more consumers are happy to pay a little extra to help producers become self-sufficient. All Fairtrade products are marked with the easy to identify Fairtrade Mark and there's a huge range available.

How does it work

The Fairtrade system works by paying producers a set minimum price for their goods, giving them a living wage. On top of this, producers also get an extra sum of money to invest in their business or community. This is called the 'social premium'.

In return, Fairtrade producers must meet certain standards. These are set by Fairtrade International. As a sandwich bar it's unlikely that you'll deal directly with producers - you'll probably purchase your Fairtrade goods from a UK supplier.

Licensing

Sandwich bars that sell food and drinks which already carry the Fairtrade Mark don't need to be licensed by the Fairtrade Foundation. But if you plan to use the Fairtrade Mark in any of your advertising you'll need to have it approved by the Foundation.

Where to get Fairtrade goods

Only licensees, such as manufacturers and importers that are registered with the Fairtrade Foundation can apply the Fairtrade Mark to a product. You'll probably purchase your Fairtrade marked goods from a registered wholesaler or catering distributor in the UK. More and more suppliers are offering Fairtrade products so it's worth asking your current suppliers if they have a Fairtrade range available. The Fairtrade Foundation website has a list of registered wholesalers and catering distributors that sell Fairtrade marked products to the food service industry throughout the UK.

Pricing

When you buy Fairtrade certified food and drink products from a registered wholesaler or catering distributor, you can probably expect to pay a little more than you normally would for similar products. The slightly higher trade prices cover the set price and social premium that are paid to the farmer or producer, as well as supply chain costs and the cost of certification and product licensing.

Although trade prices for Fairtrade products are higher, you can probably charge your customers a little bit more for them. You may benefit from extra sales, too. The Fairtrade Foundation isn't involved in setting retail prices, so the mark-up you add is entirely up to you. While you'll want to cover your costs and retain a healthy profit margin bear in mind the purpose and aims of the Fairtrade movement when you set your prices. The Fairtrade Foundation makes it clear that profit margins on Fairtrade items shouldn't be higher than on similar products.

Promoting Fairtrade goods

Offering Fairtrade products can be an attractive selling point for your sandwich bar and can help to attract new ethically aware customers - so it's important to make sure that potential customers know about the Fairtrade products you offer.

The Fairtrade Foundation is responsible for promoting Fairtrade in the UK and can provide useful materials and advice to help you to advertise your Fairtrade products. Any materials that include the Fairtrade Mark, such as menus or promotional posters, must be approved by the Foundation.

The Fairtrade Foundation organises a Fairtrade Fortnight each year to promote the Fairtrade system. This could be a good time for you to raise awareness of the Fairtrade food and drinks you offer. For example, perhaps you could run a Fairtrade tasting evening or have leaflets printed promoting the benefits of Fairtrade and highlighting the Fairtrade food and drinks you serve.

Where to find out more

The Fairtrade Foundation is part of the international Fairtrade movement and oversees all aspects of Fairtrade in the UK. For more information on Fairtrade, the range of products available and how you can get involved visit the Fairtrade Foundation website.

Promote your business

It's very important to ensure that your sandwich bar outlet projects the right image and that it maintains consistently high standards. And it's vital to let would-be customers know about your business and its key selling points.

The right image

It's vital that your sandwich bar projects the right image to customers. Everything about the way it looks and feels should be designed to attract new customers and encourage existing customers to keep coming back regularly.

It's important to make the outside of your outlet as bright and as attractive as possible. Try to make sure that signs are professionally made, clean and in good condition. Use colours, lettering and designs that you feel put across the right image for your sandwich bar. Bear in mind that things like keeping your windows spotlessly clean and the condition of paintwork can make the difference between a sandwich bar that looks like it's up and coming and one that looks old and run-down.

It can be a good idea to advertise daily or weekly specials on a board or sign outside your outlet. This will help attract passing trade and also show potential customers that you're open for business. You could use your window to advertise special offers, promotions and any services you offer - like outside catering. It's probably a good idea to place a menu card and price list in your window too. However, be careful not to clutter your window with signs and notices - it's good for business if passers by can look in and see an inviting and well-stocked sandwich bar.

The interior of your sandwich bar is very important. You can use the way you decorate and the fittings and fixtures you install to help create a brand image and a certain type of ambiance for your outlet. Think about how you'll display your products. This may depend on whether you offer made-to-order sandwiches, pre-prepared sandwiches, or both. For example, you could display a range of pre-prepared sandwiches, drinks and other products in a chiller unit and a range of fillings for made-to-order sandwiches in a chilled serve-over counter.

Think about how you can encourage customers to buy more from you. Don't overlook the importance of 'impulse' buys. You could place a rack of confectionery, cakes or muffins - or a basket of fresh fruit - next to the till. Talk to your suppliers about attractive point-of-sale materials. Encourage staff to ask customers if they would like any additional products to go with their sandwich, such as a drink or packet of crisps, and to draw their attention to any special offers like a 'meal deal'.

Quality standards

People have come to expect high quality standards and it's important that:

• your premises are clean and smart at all times, with a good food hygiene inspection rating from the local authority
• your displays and sandwich fillings always look fresh and appetising - it's essential that you remove any items that look past their best
• if you offer eat-in sales, you make sure that tables are cleaned between customers - tables with leftovers from the previous customer can be very off-putting and could well lose you business

Your staff play a very important role in shaping the image of your sandwich bar. Customers will expect them to be friendly, helpful, polite and efficient. It could be a good idea to have a staff uniform.

Remember that satisfied customers who have enjoyed their visit to your sandwich bar are likely to tell their friends and encourage them to visit your outlet.

Advertising and marketing your sandwich bar

Once you're happy with the way your sandwich bar looks, you'll want to make sure that as many potential customers as possible know about it.

There are a number of things you could consider doing to market and promote your business. You could, for example:

• launch your own website showing the range of sandwiches and other products you offer and listing any other services
• use online social media to raise the profile of your cafe and keep in touch with customers - you could use Facebook and Twitter to tell people about your latest menu and special offers, for example
• take steps to manage and take full advantage of your Tripadvisor listing
• advertise in local newspapers and directories
• have leaflets printed and deliver them in the local area - you could include your price list and highlight key features like special deals or Fairtrade products
• put up a board outside your outlet advertising daily or weekly specials
• have your logo and contact details professionally sign written on your vehicle - your vehicle can be a good advert for your business so try to keep it clean and smart to project the right sort of image
• participate in industry promotions such as British Sandwich Week
• join a trade association such as the British Sandwich Association (BSA) and have your details listed in their online sandwich and cafe finder directory
• provide some free samples, together with a price list and details of your range, to prospective customers for any delivery service you propose offering
• operate a loyalty scheme whereby customers have a card and receive a stamp each time they buy a sandwich or an equivalent product. When they reach a certain number of stamps, for example eight, they receive a free sandwich and a drink - this can help to ensure repeat custom

Almost all types of advertising have a cost, whether it's financial or your own time and effort - or both. You need to make sure that the beneficial effects of your advertising and promotional efforts are worth the time and money spent on them. It's up to you to decide which types of advertising and promotion work best for you - sometimes this is down to trial and error.

Buy an existing business

You might decide to buy an existing sandwich bar 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.

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.

Franchises

Franchising can be a good 'halfway house' between starting out from scratch and buying an existing business. If you purchase a franchise you'll still be setting up your own business, but you should benefit from the experience, resources and perhaps the name of a business that is already successful.

There are various different franchises available in the sandwich bar trade. Some are well known national outfits like Subway, while others are more regionally based. An online search for 'sandwich bar franchise' should turn up a range of different opportunities.

Although different franchise schemes vary in detail, most feature the following key points:

• as a franchise holder, you'll remain self employed but you'll use the identity (corporate colours, logos, trade name and so on) of the franchisor
• in return, you'll pay the franchisor a fee - this might be a one-off investment, a monthly charge, or a combination of both
• both you and your franchisor will have to fulfil certain obligations and maintain certain minimum standards

You may have to buy some, most or all of your stock or ingredients from your franchisor.

Many franchisors will provide you with any specialist training you require, help with advertising and marketing, as well as advice and support on a range of business and technical matters.

Details of the above points are set out in the franchise agreement or contract, which both you and your franchisor will sign. The agreement will also deal with other matters, for example any territorial exclusivity due to you and the minimum period for which the franchise will run.

Before entering into a franchise agreement, it's advisable to check the terms carefully to be sure that you're getting a reasonable deal. Go through the contract with your solicitor before signing anything. More information about franchising is available on the Franchise Info website. Information is also available from the British Franchise Association (BFA).