Americans just love ordering online and takeaways, which no doubt shows why US restaurant-to-consumer delivery is increasing and has a net worth of $17 billion in annual sales.
Experts say that the market is expected to grow at a rate of 8.2% to reach $25 billion in annual revenue by 2023.
The food delivery business is an integral part of the restaurant business and also an important part of the US economy. It plays a major role in helping restaurants and food professionals to reach new customers in a constantly changing marketplace.
Many online food ordering apps have become go-to options for people who love to eat at home. However, there is still an opening for aspirant entrepreneurs to carve a niche in their society by starting a food delivery business.
The last two years of the pandemic have seen a major need for food delivery, as the pandemic came with a new demand for convenience. Restaurants all over the world have discovered new and innovative techniques to reach customers. Even with many restrictions, restaurants can see many advantages of having delivery for their restaurant.
Hosting a well-known brand name with licensing or launching your delivery service can help you in increasing your income and produce an additional stream of income.
Delivery in restaurants can appear to be the finest strategy to manage your restaurant business in light of the present situations in the restaurant sector, which also includes expensive leading expenses, intense rivalry, and also increased costs.
Let’s cover the different types of the food delivery business and how to start a delivery-only restaurant.
There are two types of food delivery services: meal delivery service and restaurant delivery service. A restaurant delivery service can make money by charging a commission from restaurants for working for them and charging customers a service fee. And a meal delivery service is a home meal or pre-made meal ingredients to businesses or homes.
What is the remuneration for starting your food delivery trade?
Starting a food delivery business gives you a prospect to impact your community by supporting small-scale food service businesses and also offering the people with flexible dining options at home.
The food delivery business helps restaurants to enlarge their reach outside the foot traffic. They can also assist restaurants that don’t have a physical space for the customers. Starting your delivery will be a little task for you as you will be competing with some established online platforms like GrubHub, DoorDash, Uber Eats, and ChowNow.
However, your partnerships and local connections will create a competitive advantage with more attractive delivery fees and commissions. Many restaurant owners struggle to impose the existing service fee by large delivery platforms. So here, you can take advantage of the situation and gear up with your own delivery fleet.
Below are the steps on how to open a delivery-only restaurant-
How to start your own delivery restaurant? This is a big question for all restaurant owners whether it is a large-scale business or a small-scale business.
Think out of the box concept:
You must have a clear idea of what delicacies you want to add to your menu. If you are starting a restaurant delivery, you must start from scratch, and ensure the ingredients can be used in multiple dishes. In addition to this, also check the potential menu that is suitable for both dine-in, takeaways, and home delivery without compromising safety and quality.
With proper brand and delivery licensing, select the type of delivery concept that suits your restaurant the most.
Make a budget and a plan
Creating a food delivery business and arranging the funds are the two biggest steps to getting your business on track. While creating a business plan, you might want to consider your customer base, ongoing costs, and how long it will help you to get profits.
It is also a perfect time to pick up your brand name and develop an initial plan to endorse your business. Starting a food delivery business will cost you up to $2000 to $20,000.
The investment might include:
- A workspace: the costs of where you operate your business can differ greatly depending on where it is located. Many entrepreneurs start their businesses from their homes, reducing the preliminary expenses.
- Technical costs: almost all businesses whether it is small or large scale needs a computer, internet access, phone systems, and possibly a scanner or printer. One can also use their devices initially but always plan to invest in the technical system once your primary things are ready.
- Insurance and business license: ensuring your business is adequately covered is very important. Mostly the small business will need legal insurance, and as a food delivery business, you need commercial auto insurance as well. In most states, you might need worker compensation insurance if you wish to hire some employees.
- Websites and marketing materials: you need to endorse your business to attract customers. You can start by building a social media presence and a simple and captivating website. Boost your online presence on various social media sites.
- Delivery-specific tools and vehicles: many delivery businesses offer transportation for the drivers and also food bags to maintain the hygiene and freshness of the food. This is where commercial service comes into play. Your transportation will not cover business-related deliveries and other claims.
Research your target market
If you know your audience, it will increase the chance of having a successful business at any time in life. You should figure out things like the area, from where your business will operate. Is it near a corporate district, university, or suburban area?
The demographic of your audience will help you in determining what you will name your business, what restaurant marketing strategy you will choose, and what type of meals you will deliver. You can also research the area with the local business agency to see where the need is. You can also survey by going into the community and observing what people are looking for.
Plan your food menu and delivery services
Once you know your target market, you can start planning your menu and service offers. This will fluctuate depending on if you are working with local restaurants or meal prep services in your locality.
Your focus is on easy snacks, quick meals, dinner, lunch, or meals for singles or families. A clear idea will help you in getting started with your delivery services. If you want to partner with local restaurants or with mixed eatery places, then make sure your customers should have appealing options.
Create a friendly menu for delivery
All types of food items will be delivered, so it is vital to consider what items from the menu will stay warm and fresh after being prepared, picked up by the delivery person, and finally given to the customers. You have to take care of the fact that after the food is ready, it can take anywhere from 20-45 minutes to arrive at the client’s doorstep.
Focus on the easy source of ingredients that can be used in multiple dishes. Always avoid complicated menu items that must be assembled upon delivery or separated into various packed containers.
Cover your financial and legal requirements
There are a few things that every small business requires:
- Form a legal entity: setting up a business structure can always protect your assets. You can opt for various options like a sole proprietorship, corporation, or partnership.
- Always register the taxes: always apply for the employer identification number. Make sure you have met your federal and state tax requirements before you open the doors.
- Open a business bank account: by having separate banking lines for your business, you can protect your assets. It also helps in managing your taxes easily. Also, be sure to set up an accounting system to properly understand the finances and be ready to file the taxes properly.
- Licenses and permits: always check with state, local, and federal small agencies to make sure you have all the licenses and permits required to start a food delivery service in your area.
- Business insurances: find small business insurance to cover and protect your business from liability and unnecessary out-of-pocket expenditure.
How to protect your restaurant delivery business from all the risks?
Once you decide to start an online delivery business, you have to pay extra attention to all the business risks. Small-scale businesses can cover insurance for most common accidents that can occur with a delivery service. Like general liability insurance can cover food delivery businesses.
Medical expenses and third-party injuries
General liability can protect you if you are responsible for any injury to someone other than a member of staff. General liability insurance can cover operating expenses if you are found legally responsible for delivering the food that makes a customer ill and they report for any medical costs.
This liability also protects you financially if a delivery person visits someplace and injures someone and the consumer demands compensation for the hospital bills.
Property damage of third-party
General liability can cover if you are responsible for damaging any property that you do not own. If a delivery worker by mistake breaks a sprinkler outside a consumer’s home and causes momentous water damage, the consumer decides to sue you. Your liability insurance can cover the associated legal cost up to your policy limit.
Advertising and personal injury
A general liability policy also covers the advertising and personal injuries, such as invasion of libel privacy and slander. A consumer can also sue you for the incursion of privacy if you share their images on social media platforms without their permission.
Other policies to think about are marketable auto insurance, which can also guard you while you are driving for business purposes, and also worker’s recompense insurance, which is also required in almost all states as soon as you hire the first member of staff.
Now let’s see how the takeaway business has transformed
Currently, cloud kitchens and delivery have increased in popularity, especially in major cities like Chicago, New York, and Bay Area. This is also a newly transformed industry where scrumptious delicacies are being powered by the latest technology to reach consumers in the fastest way possible.
With high competition at large, no doubt, the mightiest players in the segment are not reluctant to some muscle bend to extend their supremacy in the market. Furthermore, there are only two types of agendas on the list: delivering it fast and preparing good food.
Local on-demand food delivery business is very lucrative with a complementary revenue source. However, this was never an overnight technique that cropped out of the blue. There are various benefits of operating an offsite kitchen or home delivery service.
Such business techniques mean increased competence and exposure, less overhead expense, lower refit cost, and good consumer skill through various online media.
Fact: by 2023, 77% of restaurants would prefer online delivery over dine-in as their future project.
But many challenges can be faced in both takeaway and delivery-only kitchens from handling a full-fledged restaurant. And to run it efficiently, restaurant owners need to adopt the latest technology that can make it work for them.
The ability to harness the latest technology and use it innovatively is the key to a successful venture. Also delivery online majorly depends on online presence to attract customers. Here, an accessible website to order food online is a must.
Therefore, the apparent questions are:
- Should small-scale restaurants or food businesses take the thrust and jump on the bandwagon too?
- What are the ideal ways to go about launching your delivery or takeaway business?
If you plan to start everything cautiously, the best way to go is to launch your online restaurant channel. Also providing your websites and restaurant mobile apps accessible to everyone with a strong online presence for your restaurant gives you the liability to do marketing and advertising your way.
A full-stack online order system is a great way to build and strengthen your brand. It also helps you to connect better with the customers and build loyalty for customers.
While you plan to sign up with the restaurant online system, there are a few prerequisites on how to open a delivery-only restaurant. Let’s take a look at them:
Always have a flow chart of your estimated online process in place:
As a blooming business, you may already have your operation and systems in place catering to your mortar and brick establishment. Your present situation is designed to optimize the experience for people coming for dine-in. However, when planning to take the online route, the same efficiency level in operation and system must be met.
This is how you can achieve that:
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- Find a location for a kitchen set up: this is the primary advantage in the business; you need to invest in a good location with proper parking space. You have to focus on getting a place that has proper sanitization that matches with customer demographic and also supports the demand for the type of food that you plan to serve to your consumers.
- Minimize the staff time in accepting orders by phone: if your business is new and you don’t want to engage with your staff members taking orders over the phone. Automating the process will allow the employees to focus on other vital aspects of the operation.
- Making sync with existing POS systems: one of the most efficient ways to ace the delivery-only business is to select a POS system that is customized according to the requirements of the online ordering website. Once the food is ordered on the website, it is directly sent to the POS team to avoid any delays after receiving the order.
Get your orders right:
The accuracy of the orders is of utmost importance that makes sure that the customers get what they have paid for. The free online ordering system can also eradicate the miscommunication that often occurs while taking the orders on the phone.
Another advantage is the automated process in which the consumers can modify and select the food order just the way they want. The order is then sent directly to the restaurant printer with no miscommunications or misunderstandings.
Being able to take orders straight from the system will not only ensure 100% accurate order but also saves the brand image of the restaurant from bad reviews. Lastly, expediency is the key. Providing an easy-to-use and seamless ordering system will create a better experience for the consumers, increasing sales.
Give proper emphasis on packaging:
You can showcase your plating skills at the restaurant, but is the takeaway consumer also getting a similar experience when the food arrives in a packed box? Packing like a professional can do the trick.
Follow the guidelines:
- Collaborate with the vendors who can send you packaging samples. Try it on yourself, pack a food item and get it delivered to your doorstep. This will help you in deciding the packaging styles and let you help in giving the best consumer experience.
- Stylish and sturdy packing are very important, nobody wants a spilled food container to be delivered to their doorstep.
- Labeling your packaging orders in your looks, colors, and feel is the primary key for the consumers as it lets the consumers remember that you have delivered it with full heart and value to give a 5-star experience.
Online ordering platforms built for restaurants provide a promising factor for good quality food and also branded food ordering service along with in-depth consumer analysis.
Marketing your business:
Another crucial factor is marketing your business. Most businesses fail to market their business properly whether it is online or offline. Online ordering offers a perfect setting to advertise promotions and deals that can give maximize returns on the marketing level.
Use these platforms and tools to get the answer to your question on how to grow your restaurant business.
- Display the online ordering options at a high-up spot on your website
- Provide discount offers on first-time orders
- Use social media platforms to loop in both existing and new consumers by linking them directly to the online ordering platform.
- A mobile application that also allows online ordering is the most logical progression before launching the web ordering system.
Once you have built your database with proper marketing strategies, you can also use analytics offered by online ordering services to track order channels. There are various online ordering software for restaurants that allow you to understand the guest purchase history, and buying behavior and also help in communicating with them directly as a reward point, special discounts, and new products.
You can also use the information to remove, add or modify something in menu items and also on what your consumers are ordering.
Benefits of having a delivery-only restaurant
- Augmented profits
- New profits returns
- Choose your delivery service partners
- Plan your concepts properly
- Pick up your packaging team
- Look for a virtual kitchen
- Look into your marketing campaign
- Obtain all your licensing easily
How to stay on the top ranking:
Technology is a powerful tool that has helped us in transforming the food business. By staying on top of online ordering, you can create a bundle of opportunities for your restaurant business and also attract new customers, even if you are new in the industry.
Executing an online ordering system is the finest way to turn curious searchers into regular ones. The techniques mentioned above will help you in managing your delivery sales and keep up with the competitors. You just have to follow the above guide carefully and your delivery restaurant service will find its way to the customers’ hearts.
Also, it would be best if you collaborate with the right delivery partner to expect booming returns.