Ryan Hines and Jay Kulas' newly opened restaurant, The Rustic Spoon, had a await time of over xc minutes on weekends. But within six weeks of opening, the eating place had to shut downwards dine-in operations due to COVID-19. Sales dropped by 80%, and the owners had to let get of nearly of their staff. The restaurant is now trying to stay afloat by offering takeout options and self-delivering nutrient to customers.

Hundreds of restaurants in the U.S. and across the earth are facing similar hardships.

With the COVID-19 crunch resulting in a shutdown of nigh dine-in operations, restaurateurs are putting together delivery services to keep upward sales. Just if y'all have no prior experience in setting upwards or managing food delivery, this tin evidence to be a challenge.

To help businesses such equally yours, we've put together resources on how to start a nutrient delivery service. Here are six steps you should follow to prepare the delivery arm of your restaurant.

Step #1: Research the market

The online food delivery service market is expected to grow by more than than $40 billion over the next three years to reach $154.34 billion in 2023. That said, it's also important to note that nutrient commitment is a low-margin business concern with tough competition.

Conduct thorough research to sympathise market dynamics and build a suitable entry strategy. Here are some key aspects to consider:

Competitors

The nutrient delivery service market is largely dominated by platform-to-consumer and restaurant-to-consumer players who have their ain delivery logistics. The sometime includes food commitment platforms such as Postmates and Uber Eats, while the latter includes eating house chains such every bit Dominos and McDonald's. Report the pricing patterns, online menus, and marketplace strategies of these players to position your business organization favorably against theirs.

Partnerships

About restaurants choose to partner with third-party platforms, such as Uber Eats or DoorDash. This is one of the easiest and quickest means of starting delivery services, though y'all'll have to pay commission, listing, and delivery fees. Study all potential partners and talk to their representatives direct for consummate data. You tin can also consult your peers for their opinion and reviews.

Opportunities and threats

Perform a strength, weakness, opportunity, and threat (SWOT) analysis to compare key aspects of your business organisation vis-à-vis your competitors. The analysis will help you leverage your strengths, appraise weaknesses, take on new opportunities, and identify threats. For example, if almost of your employees have vehicles, you lot can use their help to set up delivery logistics.

Market gaps

Despite market demand, there may exist fewer players servicing a specific neighborhood or serving a particular blazon of cuisine. Check if you tin can cater to such unattended customer segments and make more profit.

swot analysis chart

SWOT analysis of a food delivery company (Source)

Step #ii: Define your target audience

Your dine-in restaurant already has an audition. Try targeting the same customers for your delivery service as well. They already know your brand and have an existing relationship with information technology.

Based on the inquiry you've conducted, determine if you'd also like to cater to other market segments. Ensure that the location or area within which you lot programme to deliver has enough potential customers. A satisfactory client demographic mix will include expert numbers of working families, college students, hostelers, and millennials.

You lot may also accept to tweak your delivery bill of fare based on the preferences of your target audience(due south). Families might be interested in healthy food options, while students might desire repast and snack options that are non too expensive.

Menu customization options in TouchBistro

Menu customization options in TouchBistro (Source)

Step #3: Determine initial investment and related costs

As per experienced entrepreneurs, startup costs for a restaurant delivery business can range anywhere betwixt $3,000 and $25,000 with monthly overheads touching $600 to $10,000. Let's discuss some of the major expenses involved in setting upward and running a nutrient commitment service.

Website evolution expenses

Initially, you lot can take orders via calls and text messages, but in the long run, it's advisable to take your own website. You can use DIY website architect apps to create a website yourself or hire a professional if you have a flexible upkeep.

Software buy/subscription

Point-of-sale (POS) software (to collect online payments) and GPS tracking apps (to rail deliveries) are the basic software tools you'll need to get-go your delivery service. Free versions of these tools should suffice your initial concern needs. Equally your service expands, y'all can choose to upgrade to access more features.

Logistics costs

Building your own commitment fleet involves high investment. Initially, you can work effectually this cost by using your or your staff's vehicles for delivery. As your business grows, yous tin purchase or hire commitment vehicles. Having your own commitment logistics volition assist save the commission you lot'd have to pay to tertiary parties for delivering food to your customers.

Marketing expenditure

You'll demand to set aside a upkeep for marketing your products and services. Email marketing, social media marketing, pamphlets, hoardings, participation in events, etc.—these are some of the common methods to promote your food delivery service.

TouchBistro's template to record startup costs

TouchBistro's template to record startup costs (Source)

Step #4: Ensure your licenses are in place

You'll already take business and food service licenses for your restaurant. Contact your town or city clerk's office to bank check if at that place are any additional licenses you'll need to first delivering nutrient. Since regulatory requirements vary from land to country, you can visit the U.S. Modest Concern Administration (SBA) website to get complete information on land licenses and permits.

Step #five: Fix suitable channels for receiving orders

You have the option of taking orders through phone calls, text messages, WhatsApp messages, websites, mobile applications, and social media.

Orders via phone calls and text and WhatsApp messages require the least investment. Your social media handles can serve as a multipurpose aqueduct, helping you collect orders besides equally promote your business.

Y'all tin also employ nutrient delivery software as a one-terminate solution to create your website, receive orders, and manage delivery. The software offers POS integration also every bit GPS tracking. Initially, you can try out a free food delivery app and then movement to a paid version, if required. Some food commitment apps charge a standard fee per order or a percentage of your total sales.

Order management in Sapaad

Order management in Sapaad (Source)

Step #6: Market your service

Let your customers know that yous've started delivering food. Promote your concern through pamphlets, text messages, social media letters, etc.

Employ analytics tools to build suitable engagement strategies and social media marketing tools to create, schedule, and post promotional letters. You can also run SMS or WhatsApp campaigns to inform customers about the deal of the day, chef'southward special, discounts, and more.

Food commitment software such equally Flipdish and GloriaFood offering digital marketing features such as push notifications, SMS and phone marketing, email marketing templates, and loyalty campaigns at no additional toll.

Inform customers about the food grooming, sanitation, and hygiene measures you lot follow. Additionally, train your delivery personnel to handle customers politely. Their punctuality and behavior toward customers also assistance promote your business organization.

Email marketing template in SharpSpring

E-mail marketing template in SharpSpring (Source)

Using engineering science to build a successful food delivery service

Y'all may exist an expert at dishing out the yummiest food, but technology may not exist your strongest indicate. Let us assist you lot with the digital aspects of managing your food delivery business concern—right from choosing a cost-effective website builder app to ensuring you lot have the safest POS arrangement and the most accurate GPS tracking tool.

Browse through our food commitment software catalog to identify tools that lucifer your business needs. Y'all can also check out our FrontRunners report to place the top market players.

If you demand personalized help with software option, schedule an appointment with our advisors for a free, no-obligation consultation.

Annotation: The applications selected in this article are examples to testify a feature in context and are non intended equally endorsements or recommendations. They accept been obtained from sources believed to be reliable at the time of publication.