The food delivery business model has quite promising business opportunities. But to achieve a stable business, you have to know some important aspects of it. In this article, you will find easy steps to start your food delivery business.
1. Develop a Food Delivery Business Plan
Before starting your own food delivery company, you have to ask yourself: who are you starting your business for? The customers most likely to buy what you are selling will be your target market.
In general, there are three target audiences who are intimately involved in the food delivery business, namely:
College students and young adults: In the fast-paced social and active lives of students and young adults, they don’t have time to think about what they are going to have for lunch or dinner. So, this generation will be a good target audience.
Parents: Parents and busy families are the target audience as they are overwhelmed with busy schedules to plan meals at the end of the day. This will save them time to visit the grocery store and have more time to spend with their children.
Working professionals: Working professionals, particularly men, are increasingly turning to meal kit delivery services. Working professionals are often busy, but having a meal kit delivery service takes the guesswork out of planning and making dinner. What could be better after a long day at the office?
Furthermore, you will have more potential customers in your business by having a good business name, an efficient marketing strategy, and high-quality food to offer. Once you know your target audience, the chances of business success will reach another level.
2. Make a Budget Plan
The next thing you need to focus on is having good funding to start your new food business. Initially, it will be helpful if you need to predict the overall startup costs for your business venture. You will need to incur a lot of upfront costs before you get started. Some of them are mentioned below:
Workspace: the cost of where you operate your business can vary widely depending on where it is located. Many entrepreneurs launch their businesses out of their homes, reducing start-up costs.
Technology costs: most small businesses need a computer, a phone system, internet access, and maybe a printer or scanner. You can use your personal devices initially but plan to invest in technology after your initial startup costs.
Business licenses and insurance: ensuring your business is adequately covered is very important. Most small businesses will need liability insurance, and as a food delivery business, you will need commercial auto insurance. In most states, you will need workers’ compensation insurance as soon as you hire someone
Marketing materials and website: You need to promote your business to get more customers. Start by building a simple and attractive social media presence and website. It’s also a good idea to distribute flyers to neighbourhood restaurants and homes. Consider offering reduced costs for new restaurant partners and customers to help get the word out.
Special Delivery Vehicles and Equipment: Many delivery businesses provide transportation for their drivers and food service bags designed to maintain freshness and temperature. This is where commercial car services come into play – your personal car policy will most likely not cover business-related accidents or other claims.
3. Preparing SOP For Food Delivery
To start a new delivery business, having proper planning is very important. The business plan defines the path to the success of your business.
Your shipping business plan should have information about your target audience, revenue figures, projected operating expenses, overhead costs, and even a marketing plan. In addition, you must define specific target audiences in your business strategy, especially if you need to target a specific customer base.
What are the important metrics you should include in your business plan?
Full Information about your business (Executive Summary and business description).
Analyze market dynamics and prepare your business to enter the local food delivery service market.
Describe how your business is organized whether you are the sole owner or if your business falls into a franchise.
Describe your food choices, order value, and the shipping fee you’ll charge.
Describe how you plan to advertise your food delivery startup and who you plan to market to.
4. Plan Your Menu And Food Delivery Service
Once you understand your target market, you can start planning your menu and service offerings. This will vary depending on whether you work with a food preparation service or a local restaurant in your community.
Will you focus on fast food, easy snacks, lunch, dinner, or meals for families or singles? A clear theme will help you as you get started with your delivery service.
If you plan to partner with a local restaurant, partner with a mix of restaurants to ensure your customers have attractive choices.
5. Make Sure You Have Completed Legal Formalities
The most important thing you need to do is operate your food delivery business legally, with the proper permits and licenses. And for that, you have to follow the steps mentioned below:
Form a legal business entity: First of all, you have to decide on your business structure. A distinct business entity helps you to protect your assets and liabilities. You have the option to select any of the following business entities as per your business regulatory requirements:
Sole proprietorship: You are the sole operator of your business and have full authority over the assets, liabilities, and other management of your company.
Partnerships: You have the option to form strong partnerships with other companies in the food and beverage industry.
Corporation: this legal entity is for those who have large-scale and well-established businesses. Even in this structure, there are taxable employees.
Limited Liability Company (PT): You can quickly reap the benefits of a limited liability company by forming a PTT. This means that your business qualifies for sales tax breaks and exemptions.
Having a formal business entity helps simplify paperwork such as tax filing and bookkeeping. Currently, many food delivery businesses adopt the PT or corporation type of business.
Tax register: important taxation for your shipping business. Depending on your business structure and service offering, you will need to apply for an employer identification number. Check your state and federal tax requirements before opening your door to make sure you are registered.
Open a business bank account: remember that your personal and business accounts must be separate. By having a business account, you are fully protected from your personal assets, and it becomes easy for you to file your federal taxes.
Get a food delivery business license & insurance: Find small business insurance coverage to protect yourself against liability risks, this will help you to reduce expenses. In addition to that, you should check with your state and local governments for required food handling permits.
6. Know How You Will Deliver Food Packages
The main goal of any food delivery business owner is to deliver food packages to customers on time. Time management is an important aspect of food delivery services. And for that, there has to be a faster shipping process.
Nowadays, the demand for same-day delivery is increasing. Therefore, you should prioritize food delivery for customers who chose the same-day delivery option, then, other deliveries within the same route are added to the process.
To speed up the entire delivery process, you should adopt route optimization software that makes it easy for delivery drivers to travel overland.
7. Market Your Business Through Online / Offline Media
Now, you are ready to get your food delivery business and service online worldwide. One of the most incredible places where you can advertise your business is on the internet.
Today, digital marketing is a platform where you can advertise your business in many ways, such as brand awareness, leads, search traffic and exposure, social media accounts, and sales. Plus, it allows you to get to know your audience on a personal level, which can help you build brand loyalty.
Create a professional business website.
Do Search Engine Optimization (SEO) to get more customers by using a business website and sharing your business information with Facebook and Instagram accounts.
Word-of-mouth allows you to talk to your friends and neighbours, and even do door-to-door advertising to share details of your services.
Use professional business cards, flyers, signs, or newspaper ads.
These are the standard steps that you need to follow to start your food delivery business from scratch.
For that problem, Order Pin has a solution in the Online Food Delivery Integration feature. This feature allows all customer orders to go directly into the restaurant’s POS system automatically so that they are immediately processed by the kitchen. After the process is complete, all that remains is to be sent by courier to the customer’s house. Of course, this feature will increase customer satisfaction and improve the image of the restaurant.