Business

How to Start a Food Delivery Business in 2020

There has never been a better time to start a food delivery business. The ease and convenience with which customers can now choose and order food have revolutionized the food delivery market.

Food delivery offers convenience for those that are too busy to cook. Parents, students and working professionals have schedules that leave little room for food prep and cooking, and they are increasingly turning to meal delivery services as a back-up plan. Whether they order by app, website or phone, customers can have a vast array of food from local restaurants on their doorstep within half an hour.

Indeed, figures show that 65% of Britons enjoy a takeaway at least once a week, and for aspiring food delivery business owners, that’s a significant opportunity. So, if you’re thinking about becoming a middle cog in the wheel of food delivery, then read on to find out what you need to consider when starting your food delivery business in 2020.

Write a business plan

Writing a business plan is a good idea for any business. It acts as a guide in the initial months of your new business and it can give you more confidence knowing where your business is heading.

Starting a food delivery company can be an easy way of earning a living but there are start-up costs involved. You’ll need to think about purchasing vehicles and you’ll need to hire delivery staff (unless you intend to be a lone self-employed food courier). You’ll need to take out food delivery insurance and invest in the necessary equipment to keep food hot during travel.

Consider what differentiates your food delivery business from other businesses in your area. What makes it better? How will your food delivery service operate and what is its pricing strategy?  Think about the costs of setting up, including equipment and premises, bills and wages as this is a good exercise in determining the viability of your food delivery business.

Choose your restaurants

The aim of a food delivery service is to collect food from participating restaurants and deliver it to the customer’s homes within a stipulated time, so you’ll need to choose which restaurants to partner with.

Small, local restaurants are a good place to start, particularly those that don’t already have their own delivery services. Yet the benefits to these restaurants are numerous; it’ll increase their sales, reach more customers without the need to expand their premises. And with food delivery becoming more popular, more restaurants will be competing for the best delivery businesses.

Choose a mode of transport

How will you transport the food? One important decision to make is what modes of transport you want to invest in. Bicycles are the most efficient means of transportation and don’t require petrol costs but are not suitable for longer distances. Whereas motorbikes and scooters are fast and can travel further. Cars are less practical for food delivery as they may cause problems with parking.

The important thing to remember is that a timely delivery is important to customers, so you want to provide a reliable and efficient service. This means ensuring that each vehicle is in the best condition and you are fully insured with food delivery insurance, specific to the vehicle and your service.

Learn from the big food delivery businesses

Businesses like Deliveroo – which originally started with founder Will Shu riding around London to deliver food – are now highly successful players in the food delivery business. The company prospered because it was able to efficiently cater to the needs of a large customer base. Deliveroo and others like it, have transformed the experience of doorstep delivered food for its consumers with its dynamic but straightforward business model.

Revenue and expenses

Cash flow is a problem for any new business so, as part of your business plan, estimate your first year’s earnings.

Your revenue will come from your customers who will pay a delivery fee, plus the order fees from your partner restaurants. When pricing your services, consider all expenses and make sure they are covered and that you’ll still make a profit. Don’t forget the cost of fuel and vehicle maintenance when creating a price structure.

Delivery insurance

Your new business relies upon roadworthy vehicles so one of the most important things you’ll need to consider for your food delivery business is delivery insurance, as standard insurance won’t cover your vehicles for delivering food. Delivery insurance is specifically designed for the food delivery industry and accounts for the heightened risk that comes with food delivery.

Meal delivery businesses have gained widespread popularity in recent years, thanks to the convenience it offers customers who want their favourite foods without having to leave their home. This thriving industry is showing no signs of slowing down, so now is the perfect time to grab your piece of the action and set up your own food delivery business.

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