How to Start a Food Delivery Business from Home
With 86% of Americans ordering food delivery at least once a month, starting a food delivery service can be a great way to make your mark on the world!
But how do you go about it? If you’re thinking of launching a food delivery startup and dreaming of being the next Just Eat, here are 5 steps to online success.
1. Do your market research
The first step when it comes to creating an online food delivery business is to determine its viability. You don’t want to get started and invest your hard-earned money, only to find out too late that there’s no demand.
Thorough market research is essential. This includes:
- Determining the areas you’ll serve and if you need any specific permits, licenses, or insurance
- What type of food and delivery service you’ll focus on. For example, will you deliver meals all day, or focus on evening dinner?
- Who your target audience is (consider both end customers and food businesses)
- How much people and businesses are willing to pay to use your services
- Who your competitors are, and what they are doing. Consider other smaller businesses as well as the big, well-known marketplaces
- What your unique selling point is (i.e. how you stand out from other businesses offering the same service)
A simple way to find out what your target audience wants the most is to ask them. Send them a feedback form or meet face-to-face to see how your new venture could benefit them.
It’s also important to look at food delivery trends. How people want to order food online, what type of food they’re ordering, and what their expectations are. New trends emerge all the time, so keep your finger on the pulse!
2. Develop a business plan
Think of your business plan as a roadmap for your food delivery service. It will outline your goals, how much money you aim to make, and most importantly, where you see yourself in the future.
A business plan is also helpful if you need to apply for a loan, or get funding from an angel investor or venture capitalist. Banks and investors will want to see how much money you need, what you’ll spend it on, and what they can expect in return.
How long does your business plan have to be? It depends. A business plan can be a one-page document or a 50-page manifesto. As long as the information within it is pertinent to your startup, that’s all that matters!
3. Offer an easy-to-use app
The key to online food delivery business success is to provide a high-quality user experience. You want your app or website to be easy-to-use and fast to check out. If your system loads slowly on mobile or has a difficult checkout process, prospective customers will go elsewhere.
We recommend building an MVP, or minimal viable product. An MVP is a no-frills version of your app or website, with the bare minimum of features. This means you can launch quickly and get feedback, helping you improve your food delivery business as you go. Plus, it’s more cost-effective, so you can launch without unnecessary expense.
Consider all the features you want to include and list them in order of priority. For example, a real-time map showing customers where their order is sounds like a nice idea, but it’s not essential for launch. You can always add it later if there is demand in the future.
Don’t worry if you don’t have any app building experience – a custom app development company will be able to create a high-quality, easy-to-use app that your customers will love.
4. Plan the logistics
Food delivery is a lot more complicated than you might think. You need to ensure you have a steady flow of drivers or riders and that your delivery routes are well-optimized.
After all, you don’t want customers complaining that their food is cold!
Here’s an interesting story to inspire your online food delivery business. When Deliveroo was just starting out, founder Will Shu was the company’s first rider, riding around London on a scooter for six hours a day to understand delivery logistics as best he could!
The good news is that there is off-the-shelf route optimization software that can plan deliveries for you, taking issues like traffic and roadworks into account. This is much easier and more cost-effective than building the software yourself.
It’s also important to think about how you can scale your business in the future. If demand grows, do you have the infrastructure in place to keep customers happy?
5. Invest in marketing
Large food ordering marketplaces like Just Eat, Deliveroo, and Uber Eats invest a significant amount of money in online and offline advertising. This means if you want to go toe-to-toe with them, you need to promote your services to the right people.
It’s important to remember that you don’t have to spend a lot of money on your marketing. There are lots of free and low-cost ways you can promote your food delivery startup. You can expand your digital presence, including on social media and search engine optimization.
The key is understanding who your target audience is, and what marketing channels resonate with them the most. For example, if you’re aiming your services at older people, TikTok might not be the right platform for your needs. Think about which channels will provide the best return on investment.
One of the most powerful ways to promote your food delivery service is through word-of-mouth advertising. By offering exceptional customer service and providing a high-quality experience, customers are more likely to stay loyal and recommend you to other people.
We hope you found this guide to starting a food delivery service useful. You’re one step closer to developing a food delivery startup that fulfills your customers’ needs.
