Do you see yourself stirring your trademark dish over a hot stove while being surrounded by delicious fragrances when you visualize your future food delivery service? Or want to start a food delivery business that could be your dream? Nevertheless, you’ll need more than just a passion for culinary creativity if you want to excite the taste buds of swooning customers. You also need to have a firm grasp of business practices like budgeting and delivery driver scheduling.
The Statista digital sector Outlook estimates that the Chinese online food delivery business will generate 310 billion US dollars in sales by 2022. This amount would be close to 185 billion dollars in the United States while it would be more than 33 billion in the United Kingdom.
In 2022, it was predicted that the worldwide online meal delivery market will be worth 130.2 billion dollars. By 2027, it was projected that this amount would increase to 223.7 billion USD. Over the period under consideration, a CAGR of 11.44 percent was anticipated for the market.
More than 1.6 billion individuals utilised some type of online meal delivery service in 2021. Users throughout the world were split almost evenly between types of online meal delivery. A somewhat bigger segment, 992 million individuals, utilised restaurant customer services while 972 million people used online meal delivery services like GrubHub or Wolt.
More than ever, starting a food delivery business plays a significant role in the economy. In a market that is continuously shifting, they are playing a crucial part in assisting restaurateurs and other food service professionals to attract new clients.
For diners who prefer to eat at home, services like Swiggy and Zomato have emerged as top choices. However, there is still a chance for prospective business owners to fill a void in their neighborhoods by starting a food delivery business.
If you want to get started with starting a food delivery business but have confused about how to do so. Here in this article, we have listed 9 steps for you to follow by which you can start your own food delivery business.
Steps for Starting a Food Delivery Business
To comprehend market dynamics and develop an appropriate entrance plan for starting a food delivery business, do extensive research. Here are some important factors to think about:
Platform-to-consumer and restaurant-to-consumer operators who have their own delivery logistics control a major portion of the market for meal delivery services. Between the two are restaurant franchises like Domino’s and McDonald’s, as well as meal delivery services like Postmates and Uber Eats. To position your company attractively in comparison to these competitors’ offerings, research their pricing practises, online menus, and marketing techniques.
Most eateries decide to collaborate with independent websites like Uber Eats or DoorDash. Although you will have to pay commission, listing, and delivery costs, this is one of the simplest and quickest methods for starting a food delivery business. For detailed information, research each possible partner and speak with their representatives personally. You may ask your peers for their feedback and opinions as well.
Possibilities and Dangers
Analyze your business’s strengths, weaknesses, opportunities, and threats (SWOT) in order to compare important parts of your operation to those of your rivals. You may take advantage of your strengths, evaluate your deficiencies, seize fresh possibilities, and spot risks with the aid of the analysis. For instance, if the majority of your staff members drive, you might enlist their assistance in organising delivery logistics.
Despite consumer demand, there can be fewer players offering a particular location or style of food. See whether you can serve these underserved client demographics and increase your earnings by starting a food delivery business.
2. Find Your Niche and Targeted Audience
Once you researched the market, choose the special target market niche that will be your area of concentration for starting a food delivery business. Making this choice will be crucial for your home-based meal delivery business. If you don’t pick your specialty well, you can find yourself competing with other meal delivery services for the same client.
What you will give your consumers and how you connect with them will depend on your chosen niche. You must thus consider who your ideal client is. It will be challenging to contact them and succeed if you don’t know who your ideal customer is.
Determine the kind of foods that your target market prefers to eat. Additionally, research the area for starting a food delivery business, where your targeted audience is denser.
Any company that comprehends its audience has a better chance of success. Look at the neighbourhood where your firm will be located. Are there any universities or commercial districts nearby, or are there suburban homes? Your company name, your marketing plan, and the types of meals you offer can all be influenced by the demographics of your target market.
To find out where there could be a demand in your neighbourhood, you might do some research with regional business associations. You may also carry out research by visiting the neighbourhood and finding out what the residents need.
Determine the market niche you want to serve. Is there a particular consumer base you may aim for, such as professionals in the workforce or college students? Nowadays, cooking is a luxury, so you have a wide range of target markets to choose from, including newlyweds who work full-time jobs, senior folks, corporate workers, and single men.
3. Build Your Business Plan
You should think about your target market, your beginning and continuing costs, and how long it will take your firm to become profitable while starting a food delivery business.
The Business Model for Aggregators
This business concept for online meal delivery offers a platform that connects customers and businesses. By integrating a range of eateries with your platform, you can do this. The clients may then visit a variety of eateries all in one location.
When starting a food delivery business, you may use a subscription model to charge eateries and customers to use your platform. This will be a safer choice for making sure your firm makes a profit.
JustEat, Delivery Hero, Talabat, and many more popular apps are based on this particular business concept.
Model of Ordering and Delivering
In this business model for food delivery, the proprietors of the restaurant contract a delivery service company to provide prompt and effective deliveries. Since they are in charge of the delivery, the third-party delivery service determines the delivery costs for food orders.
If you are a food company owner who does not want to invest in a delivery fleet but still wants the food to reach your consumers at home, this business model is appropriate for you. To manage the delivery, you may work with logistics companies like Swiggy, Zomato, etc. To make sure your services live up to the promises made to the clients, it is crucial to monitor and assure the delivery partner.
Proper Strategic Model
As the name implies, you handle all aspects of food preparation and delivery. Since everything would be done in-house, a substantial investment will be needed. However, with this approach, you will have complete control over the entire process, which should result in significantly higher earnings.
McDonald’s and Domino’s are two successful examples of this concept. However, with this approach, you will have complete control over the entire process, which should result in significantly higher earnings. McDonald’s and Domino’s are two successful examples of this concept.
The first funding and investment arrangements are always the main concern when beginning a new firm. Put all your worries away since all you need to prepare is some food and your talents. You don’t even have to open a restaurant and shell out thousands of dollars for upkeep. The newest innovation that may turn your house into your workplace is a cloud kitchen service.
By lowering the expense of a new setup, employing staff, etc., you may do this with minimal expenditure. You may always borrow money from a reputable bank if you need it. Nevertheless, avoid overextending yourself since the rewards might not materialise right away.
5. Equipment & Team
Now that you have a strategy, it’s time to gather your team and equip yourself with the necessary resources. Make wise choices about both, and you’ll position yourself for long-term success.
With the correct tech stack, get an advantage while starting a food delivery business. Utilize the most cutting-edge technologies possible. If not, one of your rivals will, and they’ll provide a better client experience as a result.
Customers have high expectations, thus delivery companies must have route optimization software. Fast and free delivery is now regarded as a regular product rather than a luxury, and manual planning is no longer necessary because of businesses like Amazon.
You also require a website in addition to route optimization software for starting a food delivery business. To collect and track payments, we advise utilising a POS (Point of Sale) system in conjunction with developing your own mobile application. “70% of restaurant digital orders come through its mobile app or website,” claims Omnivore. It is crucial to have your own web and mobile presence since this excludes platforms run by other parties, such as Zomato and Swiggy, which provide food delivery services.
It’s crucial for you to assemble the best staff possible as a company. Make sure you choose people who share your vision when starting a food delivery business because you’ll be working closely with them and wise hiring decisions increase revenue. When your food delivery business is trying to break even, it is extremely crucial to have content staff who like their work since they are more productive.
Pick delivery personnel with a strong customer service background. Route optimization software makes it simple to provide your drivers with turn-by-turn directions, making communication and people skills more crucial than map reading abilities. Many of your clients will only interact in person with delivery drivers. Pick drivers who will leave the best impression possible.
6. Choose Your Delivery Area
Only 66% of customers, or two-thirds, said they prefer not to wait longer than 40 minutes for their meal to arrive, according to delivery data. If you do more than that for starting a food delivery business, your rating might be lowered. Therefore, don’t draw out a delivery region that is more than 3.5 to 5 kilometers in size.
There are enough prospective clients here because of the area’s size. yet modest enough to complete all orders inside that window of 40 minutes. Consider building a second kitchen and dividing the entire region into delivery zones if you wish to serve a broader area.
7. Choose Your Delivery Fleet
You have the option of creating your own fleet or contract a third-party company to handle the delivery service. This will again depend on the kind of food delivery company you wish to create. However, it will also rely on your financial resources, logistics expertise, and how much money you have to invest. It is better to outsource the delivery to an outside fleet if you have a tight budget for starting a food delivery business.
Even so, you might wish to spend money on route optimization tools. Because of this, you can monitor operations, follow the fleet in real-time, and examine expected arrival timings (ETAs).
Building an internal fleet is a smart move if you have the resources to do so. You have more operational control as a result, and you may use this as a chance to market your new delivery service. By doing this, you may increase brand recognition through delivery, particularly starting a food delivery business in the neighbourhood.
8. Create Ways to Get Orders
You may accept orders over the phone, via SMS, WhatsApp, email, websites, mobile applications, and social media with starting a food delivery business.
The least amount of money is spent on orders placed over the phone, over text, and via WhatsApp. Your social media accounts may act as a multifunctional medium, assisting you in both order collection and business promotion.
Use food delivery software to build your website, take orders, and handle deliveries all in one place. GPS tracking and POS integration are also features of the program. You can initially trial a free meal delivery app before upgrading to a premium one if necessary. Some applications that deliver meals impose flat rates per order or a percentage of your overall sales.
9. Promote Your Business
Then next, create your own database and make use of the free advertising that distribution platforms are now providing while starting a food delivery business. Your POS loyalty program, internet booking, inquiry services, and guest WiFi that records consumer information. Make use of the bigger delivery platforms or restaurant reservation sites that provide you access to their databases. Advertise your modifications on social media to let people know you are still open for business and that you now offer delivery and takeout.
Create a film to advertise your delivery service and highlight the staff, their abilities, and the food at your restaurant. Video a useful culinary demonstration or something else that helps your customers learn about your company. Encourage your fans to share photos of themselves eating your food by offering a discount on their subsequent orders as a reward. Join local and industry social media pages to follow what others are doing.
Starting a food delivery business is an opportunity to make a difference in your neighborhood and maybe beyond by assisting small restaurants and giving locals more flexible dining alternatives at home.
Businesses that distribute food aid eateries in extending their reach beyond foot traffic. Restaurant owners that no longer have a physical venue that consumers may visit might also benefit from them.
You’ll be up against several well-established competitors in the market, like Swiggy and Zomato. Your networks and ties locally though may provide you with a competitive edge and more alluring commission and delivery fees. Good luck for your business!