How to Start an Online Food Delivery Service from Home
In this article, I'll be discussing how to start an online food delivery service. With just 10 easy steps. No big deal.
You want to start an online food business, right? But, you've no idea how to go about. Well, you're not alone. Most food entrepreneurs are great when it comes to starting & running an offline business. However, they get intimidated when it comes to online. After all, there're so many stuff involved in an online venture - online ordering, payment, tracking, etc.
The solution? This article. I've spent several hours crafting this tutorial that will guide you through the complete process. Each process or step has been explained thoroughly with examples.
Are you ready to start your dream food empire? Yes? Let's get started.
Step #1. Decide On Your Business Model
A business model is a structure that shows the bird's-eye view of how an organization will communicate & transact with its stakeholders. These stakeholders include vendors, employees, customers, bankers, society etc.
Business models are important because they give a clear picture of how a business intends to create & deliver value. Note that, a business model is different from a business strategy. While a business strategy is essentially a plan of how a business will acquire its customers & gain market share, a business model shows how a business will interact with its key stakeholders. Strategy has a marketing angle to it, whereas a model is more of operational in nature .
To create a business model, list down the key stakeholders of your upcoming online food delivery service. Against each stakeholder, write the activities you'll perform with respect to that stakeholder.
Look, an online food delivery business can broadly have 4 different business models - make food & deliver, buy food & deliver, make food & outsource delivery or buy food & outsource delivery.
Make Food & Deliver - In this business model, you'll be making food in your own kitchen & delivering the same to your customers on your own.
Buy Food & Deliver - In this business model, you'll not be making any food. Instead, you'll be sourcing food from near-by restaurant & delivering the same to your customers on your own.
Make Food & Outsource Delivery - In this business model, you'll be making food but won't be delivering the same yourself. Instead, you tie-up with a local food delivery player who would pick-up & deliver orders to your customers on your behalf.
Buy Food & Outsource Delivery - In this business model, you'll neither be making food nor delivering it to customers yourself. Instead, you'll buy food from near-by restaurants (as & when you get orders) & deliver the same to your customers via a local food delivery partner.
So, at the outset, you need to decide on your business model - how're you planning to make & deliver food? Once you've your business model ready, time to think about other important aspects of your online food delivery business.
Step #2. Get Your Target Customers, Product & Positioning Right
Target customers are a segment of all potential customers whom you primarily intend to serve. Look, you cannot target everyone. That way you'll lose focus about what your online food delivery service is all about.
Think of any restaurant chain - Domino's, McDonald's, Subway & KFC - they all have a profile of people whom they want to target. Domino's target customer is someone from middle class who's looking for best quality pizzas at best prices. McDonald's target customers are parents with young children.
Subway target customers are young people who're looking for quick & healthy sandwiches. On the other hand, KFC is targeted towards diehard chicken lovers. Starbucks is for working professionals looking for a quick cup of coffee & a meeting place.
Making sense? So, who're going to be your target customers?
Take a sheet of paper, write down the following features of one of your target customers:
- Name (Imaginary)
- Food or eating habits
- Food problem she wishes to solve
It's all about visualizing your ideal customers & streamlining your prospective food delivery business to suit their needs.
Example: If your target customers are working professionals, you need to specially focus on nutrition aspect of your meals.
Example: If your target customers are people aged above 40, you need to focus on simplifying your ordering process.
Example: If your target customers are children below 10, you need to focus on delighting them with fun-filled branding stuff like gifts or toys (along with food of course).
Example: If your target customers are working women below 40, you may delight them with ready-made health conscious meal plans with an ability to customize them. You could even go to an extent of showing the number of calories against each plan.
Once, you've your target customers ready, time to focus on the very important part of your business - the food itself.
Nothing will work, until unless your food is great. And, your food will be great only if it serves well the needs of your target customers. Niche down any food category you've in mind taking into account the needs of your target customers & you'll have your product ready (at least in your mind).
Example: If you're starting an online food delivery business in a locality with a good number of colleges, may be you need to focus on serving light snacks.
Example: If you're starting an online food delivery business at a place filled with offices, may be you need to focus on serving quick lunch dishes.
Important: You also need to take competitors into account while deciding on your product (food niche). If most of your competitors are already serving what you've in mind, it won't be worth trying to start the same. Instead, think differently. If all your competitors are serving Pizzas, can you niche down & only serve Veg Pizzas (if this fits well with your target customers). If all your competitors are serving Sandwiches, can you niche down & serve only Chocolate Sandwiches (in case you target customers are parents with kids). Makes sense?
Niche down. Don't be a yet-another food delivery business. Differentiate yourself. Serve just one food to a segment of the audience but do it well.
Positioning means aligning your product towards a specific group of your target customers. Example: If you're selling Chocolate Pizzas, your target customers would be parents with kids. And, you may further position your product to target only parents with high income (& with kids of course). Accordingly, you'll need to ramp up your offering & price points.
Example: Starbucks is positioned to target white collar employees who can afford to pay premium price for a cup of coffee. On the other hand, a local coffee shop is, generally, positioned to target middle class people who're looking for a great cup of coffee at reasonable price.
Step #3. Coin A USP (Unique Selling Point)
As I said earlier, you don't want to start a yet another food delivery business. Do you? No, because there're already a plenty of those who look too similar. There's no differentiation. They all look the same.
So, in order to differentiate, you need to first coin a USP (Unique Selling Point). An USP is nothing but a feature of your food delivery business that differentiates you from your competitors. Example: "30 minutes or get your Pizza for FREE" is the USP of Domino's.
Your USP needs to be remarkable enough to create a buzz in the market. It should force people to talk about your business.
Note, a USP shouldn't be bland like "good quality sandwiches", "best & tasty pizza" or "delicious ice creams". Those aren't USPs, they're simply features claimed by every other food business owner.
To coin a memorable USP, think about the most pressing problem of your target customers (Domino's figured out that their target customers' biggest problem was not getting fresh & hot pizza fast enough)
So, what's your USP gonna be? Think.
Here're a few examples to inspire you to have your own business model, target customers, product, positioning & USP:
Example: Imagine you're looking to start an online food delivery business serving French Fries. You can have the following business model, target customers, product & positioning:
- Business model: Make food & deliver
- Target customers: Teenagers looking for healthy French fries
- Product: Healthy French fries with focus on nutritional ingredients & freshness
- Positioning: Budget
- USP: Minimum calories, guaranteed
Example: Imagine you're looking to start an online food delivery business serving Noodles. In this case, you can have the following:
- Business model: Make food & outsource delivery
- Target customers: People looking for authentic Chinese dishes
- Product: Authentic Chinese noodles
- Positioning: Premium
- USP: Feel like you're eating noodles in China. The same exact flavor, ingredients, aroma & experience.
Example: Imagine you're looking to start an online food delivery business serving Salad. Here we go:
- Business model: Make food & deliver
- Target customers: Above 40 working professionals looking for light, fresh & healthy Salad
- Product: Light & healthy Salad
- Positioning: Premium
- USP: Light, fresh & healthy Salad delivered within 15 minutes.
Example: Imagine you're looking to start a business serving Sandwiches. Here's how you should go about:
- Business model: Buy & deliver
- Target customers: College students
- Product: Unlimited varieties of Sandwiches
- Positioning: Budget
- USP: Fastest Sandwich delivery in the town
Step #4. Buy A Domain Name
To take orders from your customers, you need a website. Don't you? Of course, you can also take orders over phone, Facebook, Twitter, etc. However, you should always give priority to your website. Why? A website will provide the best experience to your customers - menus, self ordering, order tracking, upsells, downsell, user registration, etc. Everything done digitally saving your & your customers' time.
Imagine taking hundred orders over phone & some of those customers calling you every now & then to check their order status. What a mess will it be! That's where a website steps in. It streamlines the ordering process & relieves stress. Also, it's great for branding. After all, who doesn't like having a business website?
So, how do you go about? Before building your food ordering website, you need to reserve & buy a domain name.
A domain name is a website address your customers would visit to order food. Example: yourfooddeliverybusiness.com
Yes, you'll have to buy a domain name before proceeding to build a website. The good news? Buying a domain name is a simple process. It's as easy as buying products on Amazon.
Just head over to the website of a domain registrar like NameCheap (I've bought all my domain names from them. They're awesome). Search for your preferred domain name, add to cart & proceed to checkout. Congrats, you just got a domain name!
Note, if your preferred domain name is already taken, then you'll have to search again with a new preferred domain name.
Following are the characteristics of a good domain name:
- Avoids special characters like -, &, *, $, etc.
- Having .com extension
- Short & easy to remember
- SEO optimized
- Describes what your business is all about
Step #5. Build A Food Ordering Website
Once you've bought domain name, time to build your food ordering website on top of it. Relax, the process is simple. You don't need to hire a developer or engineer. I'll show you how to build a website, all by yourself.
Shopify is a revolutionary tool that helps business owners to build an eCommerce website all by themselves. You don't need to be a programmer. With Shopify, you can build a full-fledged eCommerce website by simply dragging & dropping various web elements.
At the outset, you need to create a Shopify account. Head over to Shopify website, enter your email address & click on "Start free trial".
All Shopify plans come with a 14-days free trial. You can use this trial to set up & create your food ordering website. Once ready, you can enter your credit card details, choose a pricing plan & go live.
After setting up your account, you'll be greeted by a beautiful Shopify dashboard. This is where you can control & manage your entire eCommerce website.
Now, you need to add a theme to your online store. Think of a theme like a skin of your website. It's primarily meant to add a look to your website.
Shopify, by default, comes with a FREE theme. However, if you want to have a different look & feel of your store, you can install a premium theme from Shopify's theme store. These premium themes come at a price of around $ 100 to $ 200.
Click on "Customize theme" to add a premium theme.
Filter industry as "Food & Drink" & you'll get a list of awesome looking themes for your food business.
It's not just about design & look. These premium themes come with a few premium features as well.
Whether it's a FREE or premium theme, with Shopify, you can always change the basic stuff like colors, menus, font, etc. of your store.
Next up, you need to connect your domain name (that you bought at Step #4) to your Shopify store. Click on "Add domain" option available on the dashboard.
Note: You can also buy a domain name directly from Shopify. In that case, you can skip Step #4 - Buy a domain name.
Following are the articles that can further guide you to set up custom theme & domain on your Shopify store:
Note: You can buy a domain name directly from Shopify. In that case, you can skip Step #4. The best part? - You don't need to manually connect your domain name to Shopify (it gets auto-connected after purchase).
Now that you've a beautiful theme & domain name connected to your store, time to add your food products details.
Click on Dashboard > Online store > Pages
Last but not least, you'll need to connect your PayPal account to your Shopify store. This PayPal account will be used to accept payments from your customers.
Click on Dashboard > Settings > Payments
If you don't have a PayPal account, you can click here to create one. It just takes a few minutes.
That's it, done!. You just created a brand new online food delivery website. To summarize, you need to do following:
- Install a theme
- Connect a domain name or buy a domain name
- Add products' details (food menus)
- Create important pages like about us, contact us, etc.
- Connect PayPal account
Of course, there're a ton of other settings that you can configure on Shopify. But, my objective with this tutorial is to cover only the basic & mandatory steps required to get a food delivery website running.
Prefer a video tutorial? Here we go:
Click here to take a virtual tour of Shopify.
In nutshell, Shopify comes with the following features:
- Unlimited products
- Unlimited bandwidth (No limit on number of visitors)
- Custom domain name
- Drag & drop website builder/editor
- Beautiful themes
- Responsive (Website looks good on both desktop & mobile)
- Free SSL certificate (The lock icon beside a website URL)
- User registration & management
- SEO support (Will help you rank well on search engines like Google)
- PayPal integration
- Social media sharing supported
- Enterprise-grade security
- Worldwide CDN (Your website will load fast no matter where your visitors browse from)
- Mobile app (To manage orders from your mobile)
- 24*7 support via Chat, Email & Phone
- Multiple selling channels supported - Facebook shop, Amazon, etc.
- Premium apps (You can add any custom feature to your store by installing a third-party app)
With more than a million merchants, Shopify is the most popular eCommerce website builder out there. Click here to check the pricing of Shopify.
Step #6. Buy Kitchen Equipments & Packaging Materials
Why kitchen equipments? Because you can't make food for a hundred customers in your small kitchen equipments? Can you? Therefore, you need large kitchen equipments specifically for your delivery business.
The equipments will depend on your product. If you're planning for chicken grills, you need a large grill. If you're planning for Pizzas, you need large ovens that can bake a good number of Pizzas at a time.
Needless to say, you can save time by buying these equipments from your local market.
After buying kitchen equipments, you need to focus on getting the packaging materials ready.
Note: In a food delivery service business, packaging becomes really important. If not done correctly, your food will become a mess by the time it reaches your customers.
Example: If you're delivering Sandwiches, you need to tightly pack it with aluminium foil to keep its warmth & freshness intact.
Example: If you're delivering Pizzas, you need to pack in such a way that there remains a gap between the top crust of the Pizza & the inner-top part of the package.
Example: If you're delivering sweet desserts, you need to pack them in a plastic container so that the syrup doesn't lick out & spoil your main dish.
Example: If you're delivering rice & curry, you need to keep both in different compartments (for obvious reason).
Example: If you're delivery cold or hot drinks, you need to deliver the same in an insulated bottle so that the temperature remains intact.
Apart from the packaging, you also need to focus on bag or container you would be using to store & deliver multiple packages. Preferably such a bag or container need to be huge in size (to accommodate many packages) & insulated (to keep the food temperature intact).
Step #7. Hire Delivery People OR Outsource Delivery
Time now to hire people who would be delivering your food. If you're planning to deliver food yourself, you can safely skip this step.
To hire delivery people, you can list your requirements on advertisement mediums like Craigslist or local newspaper.
Ideally, you should be looking to hire someone who has/is:
- A vehicle (to be used for delivery)
- An experience with food delivery
- Well versed with local areas & places
- Prompt & smart
- Willing to work during odd hours (lunch or dinner)
Alternatively, you can outsource food delivery to a local logistic player like:
- Uber Eats
- Skip The Dishes
- Just Eat
- Grub Hub
- Eat 24
Note, the aforesaid services are available only in the USA. You can check for such players in your country simply by Googling "food delivery service in [your town or country name]".
For beginners, I would recommend to start by delivering yourself. Once you start getting a good number of orders, you can always hire delivery persons.
Step #8. Pilot & Test
It's vital to test your food delivery system end-to-end before going public. No matter how well you set up, there're bound to be a few problems once you actually start taking & processing orders. The objective here is to plug those problems.
Therefore, you need to test the following:
- Capturing order over website, phone & email
- Processing & getting order ready
- Updating order status on website (Shopify)
- Delivering order
The best way to test is to request your friends & family members to create orders on your website. Using those orders, you can test end-to-end your complete food delivery system.
Also, your friends & family members can also provide feedback with respective to their entire ordering experience - food quality, delivery time, order generation, etc. Take those feedback, go back to the kitchen room & work on them.
Step #9. Launch, Market & Outreach
Now is the moment you've been waiting for. The big bang launch!. Excited? Me too.
But, before launching, make sure to do the following:
- Keep enough food ingredients ready. You never know the kind of demand you may get. Let's prepare for the best-case scenario.
- Prepare early. If your working hours are from 12 PM to 4:00 PM, start preparing from 9:00 AM on the launch day.
- Check if the website is up & running. Preferably, execute a dummy or test order.
- Open your Shopify dashboard, email inbox & keep your phone un-busy.
- Make sure the delivery vehicle(s) has enough fuel to last the whole day.
Once launched, you also need to market your food delivery service. In other words, marketing & launching need to go hand in hand. Look, unlike an offline business, an online business isn't easily discoverable. So, you need to market well, if you want to be successful with your online food business.
Flyer, Brochures & Banners
The easiest & the most affordable way to market your online food delivery service is by going door to door. Print a good number of flyers or brochures & distribute them in your target locality. Make sure to include the following:
- Your store name & address (domain name)
- USP or Tag line
- Phone number & email address
- Attractive pictures of your food with prices
- Launch discount or offer
If you distribute around a thousand flyers & say around 50 or 100 people order, it would still be a success.
The other approach is to install ad banners at important locations like traffic junctions, hospitals, schools, churches, etc. Of course, this'll cost you money.
Facebook Ad is a great way reach out to your customers with a click of a few buttons. This medium works even better if your target audience is teenagers.
Yes, the process is quite simple. To get started with Facebook, all you've to do is create a business page with details like cover photo, logo, location, website address, description & call-to-action buttons. After your business page is ready, you can create an ad to reach out to as many target audience as you want.
Note, social media ads, if not done correctly, can make you lose a lot of money. Therefore, I recommend you to start Facebook ads with a small token amount. As you start seeing success, you can scale up your campaigns.
For success with Facebook ads, take care of the following:
- Target audience. With Facebook ads, you can target users with specific interest, demographics or behaviours. Ideally, for food delivery business, you would want to target people who've liked or followed other food service business pages in the past.
- Bidding. Facebook ad cost is based on a bidding system. So, with every Facebook ad, you can either set up a target manual bid (cost per click) or automatic bid (cost per click decided by Facebook). For beginners, to keep the cost low, its recommended to start with manual bidding.
- Creatives. The success of your ad will largely depend on the your creatives - ad photo or video, ad title, ad sub-title, etc. Make sure they're eye-catchy & hit the curiosity of your target audience.
- Landing page. Your website home page will be your ad landing page. Make sure to optimize it for orders.
Another way to promote your online food delivery service is by organizing events. These events will aimed at educating your audience & introducing your food to them.
Example: If you're delivering Pizzas, you can organize an event where you'll educate your audience about the Pizza history, culture, trends & community.
Note, your invitation to the event should not look like an advertisement. The point is that you should mention clearly in your invitation that your event will be a place where food lovers with meet & have a chit chat. No body likes direct advertisement. Making sense?
YouTube is huge nowadays. So, why not promote your food delivery business there? And, the best part? It's simple. Simply open a business channel, upload a few videos & see the views roll in.
However, I would like to warn you that YouTube has become a crowded place. It's not easy to make a video go viral until unless its disruptive or unique. Therefore, don't jump on & start uploading average videos. Instead, take time to prepare a strong YouTube strategy & then follow it religiously.
In hurry to drive visitors to your online food delivery website? Then, try partnering with food influencers.
Food Influencers are creators who've established a loyal following on social media platforms like Instagram or YouTube. They can help your business go viral in a matter of seconds.
Example: Mark Wiens is one of the most popular food influencers with millions of followers (on YouTube).
All you've to do is shoot a message to them & pitch your requirements.
If your target customers are 40+, you can spread word about your delivery business by advertising on a local newspaper.
It's an age-old ad technique that still works today.
Coupons & Offers
Who doesn't like a discount coupon? For customers, it means discount & for business owner, it means more orders.
So, get started. Print a few hundreds of discount coupons & distribute the same at high-footfall areas like outside of malls, hospitals, parks. Alternatively, you can install a canopy or stall inside the aforesaid places & distribute these coupons.
Your happy customers are going to your brand ambassadors. They'll talk about your great food & service everywhere. Yes, that's called word-of-mouth or referral marketing. To take this to a new level, offer referral incentives to your existing customers.
Example: Offer existing customers a flat 40% off on their next order for referring a new customer.
In Shopify, you can install an app called Referral Candy to have referral features installed on your food store.
Step #10. Learn & Grow
Rome wasn't built in a day. Similarly, your food business won't reach peak on the launch day itself. In long run, its all about learning from mistakes, improving & delighting your customers.
Example: In the course of running your business, you'll learn a lot about customer preferences. While your food menu has 20 varieties of Sandwiches, you'll find 80% of your customers only ordering two types of Sandwiches- Plain & Grilled. So, you may think about streamlining your menu & cutting down the food options.
I would recommend you to talk to your customers regularly. Listen to them. What they love the most about your food & what pisses them off. You can also run an online survey to collect these data anonymously.
Also, its important that you study your operational & financial data. What's the mark-up you're taking per order? How much is the order delivery cost per order? How can the profit be improved? How can the cost be further optimized?
Look, entrepreneurship is all about perseverance. Even if you don't see customers for the first few days, don't lose hope. Keep marketing. And, I'm sure you'll see the light.
Look, as I said, the process isn't that tough as it seems. Anyone can create & run an online food delivery service in a matter of few hours. Yes, thanks to technology.
So, get started with the first step - pick a business model. And, you'll be amazed how other steps fall in place quickly.
Yes, your dream food business is just a few easy steps away.
Start. Prepare. Deliver.