Just as we’ve seen with many other sectors, the foodservice industry is primed for disruption. This is primarily thanks to the increasing presence of delivery only restaurants.
These businesses offer food like any other brick-and-mortar restaurant with one key difference: you can’t actually go into the restaurant. Rather, your food order is fulfilled by a third party service and dropped off by their delivery person.
As a result, such restaurants are sometimes called ghost kitchens, virtual restaurants, cloud restaurants, or dark kitchens. However, regardless of what you call it, the food delivery business is changing this industry’s landscape.
Benefits of Starting a Food Delivery Business
Perhaps the most notable benefit of starting a delivery-only restaurant is lower overhead costs. Opening a traditional brick-and-mortar restaurant requires a significant financial commitment as you must lease your restaurant space, furnish it with equipment and decor, hire on staff, and more. Similarly, operating a food truck (a popular alternative to traditional restaurants) still requires purchasing a vehicle, outfitting it with equipment, and maintaining it over time; these issues are compounded by complex legal restrictions and inconsistent sales.
Alternatively, a ghost kitchen requires a much smaller space to operate than a traditional establishment and eliminates the complexities of vehicle maintenance and the legalities of having a roaming restaurant. This means that you, the restaurant owner, can start your business without investing as much. By only taking delivery orders, virtual restaurants reduce the barriers to entry for those wanting to open their own food business.
How to Start a Food Delivery Service
While the food delivery business is a great way to get started, it does come with special considerations you might not have to think about when opening another restaurant concept. Below, we are walking you through our best tips for starting a food delivery business.
1. Think Delivery First
While delivery or take away options are usually an afterthought for traditional restaurants and food trucks, it is necessary due to changing customer demands. This often results in decreased quality of the food and its presentation resulting in customer complaints or dissatisfaction.
The key to starting a successful delivery-only restaurant is to overcome this challenge by putting delivery at the forefront of your concept and optimizing your menu for transportation. Avoiding food that arrives as a cold and soggy mess is the key to the delivery model -- this will keep your customers happy and coming back for more.
So, how do you do this? Create a simple menu full of versatile ingredients to increase the consistency of your product with the added benefit of reducing supply costs. Then focus on the time, temperature, quality, and taste of your food, preparation methods, and packaging to optimize the final product your customers will receive from the delivery driver.
2. Know Your Customer
As with any new business, you will want to research and thoroughly understand who your customer is and how you can best serve them. As a food delivery business, it is even more important to find your niche or target market. Are you near a college campus where you can cater to students who might order food at all hours of the night? Will you operate in the business district of a city to serve busy professionals who often work through their lunch hour? Could you focus your offerings on nearby senior centers or those who may not be capable of leaving their homes? Or perhaps you have noticed there is a lack of vegetarian, vegan, gluten-free, or other special dietary options available in your area which you could fill with your service.
Identifying the specific target market you want to serve will not only help you develop your menu appropriately, it can help target your marketing and branding efforts. To get started, look up other businesses in your area to develop a sense of who is around you.
3. Develop a Brand
Once you know who your customer is, you are ready to start building some buzz within the community you will serve. Given that your business will exist almost entirely online, you will want to allocate significant resources to creating a logo, website, menu, and other digital assets that can be used across your marketing channels.
There are a variety of platforms on which to create your website, but no matter which one you choose, make sure you use this as an opportunity to showcase your business, tell your story, and help customers learn more about you.
Then, devote some time to creating engaging social media profiles, complete with your contact information or website link. Some of the most popular options for delivery-only restaurants are Instagram and Facebook, but be sure to research your customers to develop a better understanding of where you can connect with them.
4. Find a Kitchen
While you are building brand awareness, you will simultaneously need to find a kitchen to produce your food in. Unfortunately, this can’t be the kitchen in your home. In order to comply with the legalities of food safety standards, your food must be produced in a licensed commercial kitchen.
The good news is, thanks to an increase in shared commercial kitchens over the past several years, finding a space may be much easier than you think!
Shared-use kitchens are designed to be used by multiple businesses, often being rented out by the hour, day, or month to multiple tenants rather than to a single business for years at a time. Most often, you will be required to pay a deposit when you first begin using the kitchen, but use a pay-as-you-go model to book and pay for your time in the space. With this approach, you’ll be setting up a ghost kitchen in no time!
5. Choose the Right Partner
Finding the right delivery partner will be key to successfully running your business. After all, the delivery process will be a significant portion of your customers’ experience. These businesses typically take a commission of every order in exchange for providing the infrastructure and manpower to smoothly navigate the delivery process. You will leverage their technology platform to connect with customers, receive and process orders, and they will supply delivery personnel to take the orders to your customers.
While giving away up to 30% of every order may seem extravagant, you must consider the benefits of using a delivery company. First, you will save time and money marketing to customers. Instead, hungry customers will come to an established digital marketplace and find you. Plus, most platforms will allow you to pay for in-app advertising or premium placement to attract more eyes (and stomachs) to your business.
Additionally, you will save time and money from having to find and employ several people to deliver your food. Instead, these individuals will work for the platform and be paid through them.
There are several delivery partners currently available in the national market, though you may want to consider any popular food delivery startup services in your area specifically. As you look for a platform, research and evaluate their average delivery times, reliability, customer service, and user reviews to determine the best fit. Some of the nation’s top platforms currently include DoorDash, GrubHub, Postmates, Caviar, and Uber Eats. Or better yet, check out small business delivery software by Shipday. We offer small business order management solutions for business in order to streamline the process.
6. Practice Makes Perfect
Before you deliver anything to a paying customer, make sure you have extensively tested your menu, packaging, and delivery process. Focus on creating food that will travel well and finding packing materials that will hold temperature while allowing the food to arrive as intended. When you evaluate your suppliers, ask them to send samples of their product so you can test it.
Once you open your virtual doors, make sure you have an individual acting as quality control between the kitchen and the third party delivery team. This person should triple check the orders to ensure all items are packed and ready to go, that the correct utensils have been provided, and that the orders are being processed in a timely manner. This tracking process will help eliminate errors and identify further opportunities for improvements. After all, launching your business is only the first step in your journey, not the last.
7. Add a Personal Touch
Today’s consumers have a lot of options when it comes to what they choose to order for dinner, so it is crucial that you set yourself apart. One great way to stand out from the crowd and build your brand is to add a unique and personal touch to your orders. Mints and fortune cookies might be a cheap and easy way to include a little something extra, but they are also overdone. Instead, consider including a handwritten note, a small collectible item that is relevant to your brand, or some other trinket. Creating a memorable experience is sure to delight your meal delivery customers and lead them to keep you in mind next time they are placing an order.
Above all else, make sure you’re choosing great systems and software that will help your food delivery service thrive. Check out the best restaurant delivery apps and food management software from Shipday to get started today!