Do you want to start a food delivery business from home? If YES, here is a complete guide to starting a food delivery business with NO money and no experience.
Okay, so we have provided you an in-depth sample food delivery business plan template. We also took it further by analyzing and drafting a sample food delivery marketing plan backed up by actionable guerrilla marketing ideas for food delivery businesses. In this article, we will be considering all the requirements for starting a food delivery business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Why Start a Food Delivery Business?
- 1. Understand the Industry
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide Which Niche to Concentrate On
- 4. Know Your Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 6. Know the Possible Threats and Challenges You Will Face
- 7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- 8. Choose a Catchy Business Name
- 9. Discuss with an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Raise the Needed Startup Capital
- 14. Choose a Suitable Location for your Business
- 15. Hire Employees for your Technical and Manpower Needs
- 16. Write a Marketing Plan Packed with ideas & Strategies
- 17. Work Out a Reasonable Pricing for your Services & Products
- 18. Brainstorm Possible Ways to Retain Clients & Customers
- 19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Why Start a Food Delivery Business?
It can be truly challenging to start any business, but one business that you can start with little challenges and a wide market coverage is a food delivery business. A food delivery business is a business that involves delivering food from restaurants to customers. The food delivery business is a part of the food and restaurant industry value chain and often shares common values relating to conservation, sustainability, healthy food access, and supporting restaurants in getting good returns on their investment.
If you are considering starting a food delivery business, the good news is that you can’t get it wrong. This is so because there are several fast food restaurants, canteens and other food outlets that are willing to partner with a food delivery company to help them reach out to their customers who may not have enough time to come over to the eatery.
It is important to state that starting a food delivery business comes with its own fair share of challenges, but that does not rule out the fact that it is indeed a profitable business venture. An aspiring entrepreneur can either choose to start a food delivery business on a small scale dealing with a handful of eateries and covering a small locality or on a large scale working for several restaurants and covering several cities depending on their financial status.
Before launching this type of business, it will pay you to carry out your market research, economic and cost analysis and of course feasibility studies. If you get things right before launching your food delivery business, it will not take you long before you break even and start smiling to the bank.
Starting a Food Delivery Business from Home – A Complete Guide
1. Understand the Industry
Players in the food delivery services industry are involved in delivering foods to any destination within their coverage area as ordered by their clients. Basically, the process of ordering food from a local restaurant or food cooperative is through their telephone, website or customized mobile app.
It is the same process when ordering goods from online stores, and many of these food delivery services companies allow customers to keep accounts with them in order to make frequent ordering convenient. Payments are usually done either by credit card or cash, with the restaurant returning a percentage to the online food company if they are not the owners of the restaurant.
The food delivery services industry is indeed a thriving and profitable industry so much so that in 2008, Papa John’s International announced that its online sales were growing on average more than 50 percent each year and neared $400 million in 2007 alone.
A recent research conducted by TechCrunch reported that “of the $70 billion [takeaway and delivery market], only about $9 billion (roughly 13 percent) is online. The established delivery infrastructure of these franchises was well suited for an online ordering system.
The home and office food delivery services industry is much active in the United States of America, Canada and European countries. The industry generates several millions of US dollars annually from several registered and unregistered small scale, medium scale and big home and office food delivery services businesses scattered all around the united states of America. This line of business is responsible for the employment loads of people directly and indirectly all around the world.
The recent trend in the food delivery services industry is that local companies have started teaming up with e-commerce companies to make ordering quicker and more precise. Some restaurants have embraced online ordering despite their lack of delivery systems, using it to manage pick-up orders or to take reservations.
If you are contemplating opening a home and office food delivery services business in the United States, you should ensure that you carry out thorough market survey and feasibility studies so you that you will be able to get the ideal location with the right demographic composition. The truth is that if you get some key factors wrong before starting your own home and office food delivery services business, then you are likely going to struggle to stay afloat.
Lastly, the food cum restaurant industry is indeed a vast industry and there are loads of players in the industry hence the competitive nature of the industry. The fact that the industry in most cities is competitive does not in any way stop an aspiring entrepreneur who has keen interest in the industry to keep up.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who consume food cut across all age groups and gender; male and female above 18 years with the financial means to order food and get it delivered to them, hence the demographic composition of a food Delivery Company is all encompassing.
The truth is that when it comes to the food delivery business, there is indeed a wide range of available customers. In essence, your target market can’t be restricted to just a group of people or business, but all households, offices and sites within your business location.
So, if you are thinking of starting a food delivery company then you should make your target demographics all encompassing. It should include households, offices, construction sites, assisted living homes, nursing homes, hostels, dormitories and camp houses et al in and around the neighborhood where your food delivery company is located.
3. Decide Which Niche to Concentrate On
It is important to state that there is no known niche area when it comes to the food delivery business. Every player in this line of business is basically involved in the delivery of food as requested by their customers. On the other hand, some food delivery companies may decide to own their own restaurant or may decide to operate without a restaurant. Some may decide to operate online and others may decide to operate both offline and online.
The Level of Competition in the Industry
The competition that exists in the home and office food delivery services industry goes beyond competition amongst food delivery companies; you will be expected to compete with every business that also retails food; businesses such as food carts, food kiosk, fast food restaurants and food trucks et al.
This is so because customers may decide to bypass food delivery companies and purchase directly from food carts, food kiosk, fast food restaurants and food trucks. So, it will be right to say the competition in the home and office food delivery business is tough.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your products or business properly, you will always make headway in the industry. Just ensure that you work with leading fast food restaurants and eateries in your business location and you know how to attract and reach out to your target market.
But over and above, there are several home and office food delivery companies scattered all around the United States. So, if you choose to start your own home and office food delivery company in the United States, you will definitely meet stiff competition amongst home and office food delivery companies and every business that also retails food. Besides, there are larger home and office food delivery companies that determine the trends in the industry and you should be ready to compete with them for customers.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.
These are some of the leading home and office food delivery companies in the United States of America and in the globe;
- Ovations Food Services, LP
- TooJay’s Gourmet Deli
- Feast on Us
- FOODNOW Restaurant Delivery Service
- Sysco San Antonio
- Schwan’s Home Service
- Boss Wings
- Peapod by Stop & Shop
- Fresh Meat & More Inc.
- LAbite Meal Delivery Company
- Delivery Hero
- Just Eat
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Home and office food delivery business is not a Green business, as a matter of fact, you will come across several vans and bikes of home and office food delivery companies all across major cities in the United States of America. So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and costing of the required amount needed to purchase distribution vans and bikes and also the cost to successfully run the business.
Over and above, if you are considering starting a home and office food delivery business, then your concern should not be limited to the cost of purchasing delivery vans and bikes, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a home and office food delivery company, you would have to start from the very scratch because you can hardly get a franchise of a home and office food delivery company to buy. It is a business that is open to all and sundry.
Besides starting a home and office food Delivery Company from the scratch is less stressful when compared to other small scale businesses which usually requires detailed groundwork before launching the business. With a home and office food delivery company, you should just try as much as possible to secure delivery vans and bikes, build business relationship with fast food restaurants and eateries and also offices and houses within your coverage location and then leverage on every marketing tool within your disposal to market your food delivery service.
Please note that most of the big and successful home and office food delivery companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own home and office food delivery company today, one of the major challenges you are likely going to face is the presence of well – established home and office food delivery companies within your business location. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in bad shape, history has it those businesses such as home and office food Delivery Company and the likes usually struggle to maintain their old customers or even welcome new customers.
So also, unfavorable government policies can also hamper the growth of your food delivery company. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- Best legal entity to use for this type of business
Generally, you have the option of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a business such as home and office food delivery company. If your intention is to grow the business and deliver food for chains of fast food restaurants and eateries all across the United States of America and other countries of the world via franchising, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your home and office food delivery company; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your home and office food delivery company with the ability to sell franchise and deliver food for chains of fast food restaurants and eateries all across the United States of America, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
8. Choose a Catchy Business Name
When it comes to Choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own home and office food delivery company, here are some catchy names that you can choose from;
- Grace 2 Grace Food Delivery Services®, LLC
- Tango & Charlie Food Delivery Company, Inc.
- Thomas Page© Home and Office Food Delivery Company, LLC
- White Angels® Food Delivery Company, Inc.
- Mike Pentagon Food Delivery Company
- Gomez Carlos & Sons Food Delivery Co., Inc.
- Zaps® Home & Office Food Delivery, Inc.
- The Vintage Group Food Delivery Company, Inc.
- Finger Snaps Food Delivery Company, LLC
- Timely People Food Delivery Company, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your home and office food delivery company.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own home and office food Delivery Company in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Credit insurance
- Motor vehicle insurance (comprehensive insurance)
- Deposit insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own home and office food delivery company, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
When it comes to home and office food Delivery Company, you do not need to have any formal training or special certification before you can be allowed to start a home and office food delivery company. All you need is informal training that will expose you to the in and out of home and office food delivery processes.
On the other hand, if you come across any form of certification that can aid you to conduct your home and office food delivery business pretty well, then by all mean try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own home and office food delivery company in the United States of America;
- Certificate of Incorporation
- Business License
- Tax Payer’s ID / Tax Identification Number
- Business Plan
- Non – disclosure Agreement
- Commercial Vehicle Operator’s Registration
- Appropriate driver’s licenses for drivers (Commercial driver’s license (CDL)
- Assistant’s license for assistants
- Proof of ownership, proper identification and vehicle license
- Food and drink handlers certificate
- Health inspection Certificate
- Proof of district-issued food and drinks manager identification card
- Copy of license for the service support facility (warehouse) and/or a recent inspection report
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
Starting a home and office food delivery company can be cost effective especially if you choose to start on a small scale with just one delivery van or bike delivering for just one fast food restaurant and covering a small neighborhood.
Acquiring a delivery van or bike is part of what will consume a large chunk of your startup capital, but if you choose to start the business on a large scale with fleets of delivery vans and bikes, then you would need to go source for fund to finance the business because it is expensive to start a standard large scale home and office food delivery company.
No doubt when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your home and office food delivery company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
When it comes to choosing a location for your home and office food delivery company, the rule of thumb is that you should be guided by the demand for such services, the number of home and office food delivery companies and every business that also retails food within your business location. Of course, if you are able to start your home and office food deliver company in the right location for such business, you won’t struggle to make headway in the business.
It cannot be overemphasized that the location you chose to start your home and office food delivery company is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and lifestyle.
If you make the mistake of starting your home and office food delivery company in an area where you can hardly find standard fast food restaurants and eateries or close to residential estates, you will struggle to grow the business.
These are some of the key factors that you should consider before choosing a location for your home and office food delivery company;
- The demography of the location
- The demand for food delivery services in the location
- The purchasing power of residents of the location
- Accessibility and road network of the location
- The number of home and office food delivery companies, fast food restaurants and eateries in the location
- The local laws and regulations in the community
- Traffic, parking and security
15. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technologies or equipment needed to run this type of business except for drones (optional) and relevant software applications. So also, you will definitely need POS machines, computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
You would need delivery vans and bikes for this kind of business and you would have to procure one. In some cases, depending on the agreement you reached with fast food restaurants and eateries, they might provide you with their own branded vans and bikes that you can use for the delivery of food to your customers.
As regard leasing or outright purchase of an office facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location. If things work out as planned, then you go on a long term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard home and office food delivery company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Sales and Marketing Officer, Delivery Vans and Bike Drivers, Accounting Clerk and Cleaners. These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members to run a medium – scale but standard home and office food delivery company.
The Service Delivery Process of the Business
When it comes to home and office food delivery services, there are no hard and fast rules about it. Basically, it is the duty of the marketing manager to help the organization source for fast food restaurants and eateries to help deliver food purchased from their restaurants and also to source for offices and homes to help deliver food that they purchase.
They go out there to source for good food delivery deals and they also ensure that they do not only deliver at the right prices that will guarantee them good profits, but also ensure that they deliver food for various fast food restaurants and eateries in their business location.
Once the deal is sealed, the delivery guys get orders from fast food restaurants and get them delivered to the appropriate locations within the specified time frame.
It is important to state that a home and office food delivery company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated home and office food delivery company business process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
- Marketing ideas and strategies
Normally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a home and office food delivery company, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well-known brands determining the market direction for the home and office food delivery industry.
So, when you are drafting marketing plans and strategies for your home and office food delivery company, make sure that you create a compelling personal and company profile. Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to food delivery services and the people you have worked for. This will help boost your chances in the market place when sourcing for food delivery contracts.
As a matter of fact, your marketing strategy will center on reliability, swiftness, safety, pricing, secured payment platform, and above all excellent customer service. You should ensure that whenever your customers hire your services, they will get excellent service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses this days are aware of the power of the internet which is why they do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort will be directed to internet users; your website will become your number one marketing tool.
These are some of the marketing ideas and strategies that you can adopt for your home and office food delivery company;
- Introduce your home and office food delivery company by sending introductory letters alongside your brochure to households, offices, construction sites, restaurants, fast food restaurant, assisted living homes, nursing homes, hostels, dormitories and camp houses et al in the neighborhood where your home and office food delivery company is located
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that those on the social media or those who read blogs can know who to call when they need the services of home and office food delivery companies within your location
- Create a basic website for your business so as to give your business an online presence
- Directly market your services
- Engage in roadshows in targeted communities from time to time to market your services
- Join local home and office food delivery company associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you deliver food at rock bottom prices is to position your delivery guys in strategic locations or try as much as possible to leverage on drone technology. The truth is that if your delivery guys are well – positioned and if you adopt drone technology in your home and office food delivery business, it will save you loads of cash on logistics.
Another strategy that will help you deliver food at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
18. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your products and services delivery, they can hardly source for alternative service providers or products.
If you can continue to deliver food for chains of fast food restaurants and eateries, and your customer service delivery is top notch, then you won’t struggle to maintain loyal customers.
Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also to attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building loyal clientele base, you should purchase a customized CRM software. With a customized CRM system, you can easily stay in touch with your clients.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a home and office food delivery company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by going into franchising, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your home and office food delivery company;
- Place adverts on both print (newspapers and health magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your services
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your home and office food delivery company
- Distribute your fliers and handbills in target areas
- Contact households, offices, construction sites, restaurants, fast food restaurant, assisted living homes, nursing homes, hostels, dormitories and camp houses et al in the neighborhood where your home and office food delivery company is located informing them about your business and the products you distribute
- List your home and office food delivery company in local directories/yellow pages
- Advertise your home and office food delivery company in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners in strategic positions in the location where your home and office food delivery company is located
- Ensure that all your staff members wear your branded shirts and all your vehicles, vans and bikes are well branded with your company logo.
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