How to start a food delivery business

  1. Find your niche
    Food delivery businesses run the gamut, from farm-to-table to meal kits to straight-up restaurant delivery orders. The first order of business is to find your niche. What will be your unique approach?

Spread offers a different business model. It’s essentially a dedicated ad network for restaurants — something Wang thinks is missing in the current market. Restaurants can use this commission-free platform to target the best prospective customers and win repeat customers much more cost-effectively.

  1. Define your approach

Start a new marketplace. Grubhub and DoorDash are examples of marketplaces. It seems like a relatively simple concept. You sign up restaurants, build a product, get users, and pass orders along to restaurants. But building a successful marketplace means getting the details right, like accepting payments and making sure restaurants fill the orders correctly. To convince restaurants to come on board, you’ll need some kind of angle that differentiates you from other marketplaces.
Start a white label ordering service. This approach involves building and selling software that restaurants can use on their own site to take orders. Wang estimates there are probably over 100 companies currently in this space. It has a low barrier to entry — simply write the code and sell it.
Start a food ordering and delivery platform. This full-scale approach to food delivery (like Uber Eats) involves building out the logistics end. It covers everything, from building an app to take orders to establishing a restaurant network and creating a delivery service.

  1. Work out the logistics
    Food delivery is all about logistics. When Farmhouse Delivery was still small, Scherzer and her partner simply pulled products off the shelf and delivered them locally around Austin in an old DHS van.

But as the number of orders climbed above 100 and spanned other nearby cities, it was clear they needed another solution. “Ten new customers across four cities instead of 10 customers living on the same street — you can see the complexities there,” Scherzer explained.

Today her business has an entire fleet of vans and box trucks. The box trucks go to the big cities in central Texas and transfer food to vans, which deliver to customers’ doors. Though 90 percent of deliveries are handled in-house, she also sometimes uses contract drivers from TaskRabbit if they’re behind on deliveries or need some support.

  1. Build a customer base

Like any other business, you must also start with researching your target market. Determine what it is that your target market would like to have for their meals. Study also the locality in which your target market is situated. For example:

If your target market is the students of a nearby university, you may want to focus more on light and heavy snacks.
Or, your target market is the employees of an adjacent office building, you may want to offer healthy lunch meals and snacks similar to SnackNation healthy office snacks.
If your target market is the residents of a residential building, then you may want to consider their meal needs, such as if they have kids or not.
Once you decide what market you’re going to target then select a catchy name for your business to appeal that target audience. Then customise your meals according to what you target market needs.

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