The food delivery industry is booming at the moment. In this article we find out how you can start your own business in this lucrative sector and some of the top reasons why it’s such a smart idea.
As TV screens get larger and the choice of home delivery food increases, it’s no wonder Brits often choose to stay at home to eat, rather than dining out. And the trend of choosing to eat, drink and socialise at home is likely to continue, as we shun expensive bar and restaurant food in favour of cheaper, tastier and more convenient alternatives. This makes it a great time to start a food delivery business.
According to the NPD Group, over the last 10 years, the home delivery food market has increased; it’s now worth £4.2 billion. It seems like there really is no stopping the takeaway delivery phenomenon that is shaking up Britain’s food service industry. Companies such as Just Eat and UberEATS have played a large part in the increase of takeaways. They’re enabling lesser known independent businesses to compete with bigger brands; so much so that the NPD Group has forecast that the takeaway delivery market will grow an additional 17 percent in value over the next two years.
Why is starting a food delivery business such a great idea?
1. The UK has an aging population
It isn’t just takeaway meals that make up the home delivery food market. There are also franchises that cater to other services. The Office for National Statistics (ONS) has reported that more people are living in the UK than ever before – 65.6 million, in fact. This is, in part, due to an increase in life expectancy. As a result, 18 percent of Brits are aged 65 or over, while 2.4 percent are 85 or over.
This has increased the demand for services provided by franchises such as Wiltshire Farm Foods more than ever before. Wiltshire Farm Foods cooks and delivers delicious and nutritious frozen ready meals to hungry people up and down the country. Its customer pool has an average age of 83.
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2. The UK population can’t get enough of healthy and organic produce
Sales of organic food and drink are also on the rise. In 2017, they increased by six percent to £2.2 billion, a record high driven mainly by independent outlets and home deliveries, according to a report from the Soil Association. This makes it a great time to buy into a franchise, like Riverford, that puts a healthy twist on online food shopping. Each week, it delivers more than 47,000 boxes of fresh fruit, vegetables and organic goods taken directly from farms.
Top tips for starting a food delivery business
So, you’ve decided you want to start a food delivery franchise unit. But how do you go about it? Here’s our step-by-step guide to see you become your own boss in the food delivery industry:
1. Research your target market
If your food delivery business is to do well, your products and services need to be popular among the people in the local area. Therefore, it’s vital you take the time to think about the demographics in your business territory. Are there a lot of university students and young people? Or perhaps you plan to operate your business in a quieter neighbourhood with families and retired couples? Is it an affluent area, where people can afford pricier meals? Is world food popular in the territory?
You should consider the answers to all these questions and let them shape your business. For example, there’s no point partnering with upmarket, expensive restaurants if your territory is made up of university students or lower-income families who can’t afford to buy your food.
2. Have a USP
Make sure you are completely confident with why consumers will love your product. Keep in mind that lots of your target market will like to know the back story of your business, i.e. where the inspiration for your business comes from. Make sure this shines through in your product design and marketing strategy.
3. Decide what type of business you want to start
There a few different types of food delivery businesses. Are you going to provide a courier service to restaurants or stores in your local area or are you going to be responsible for producing your own meals? If you choose the latter, you need to decide whether you will ‘make to order’ or ‘batch make’ your product in bulk. While making to order can help reduce waste, bulk batching can often mean bigger profits, but involves parting with more cash initially for ingredients.
4. Find the right location
If you’re planning to cook the food yourself, you’ll definitely need to find a suitable workspace. This could be in your own home, if you have room, but it will need to adhere to the appropriate health and safety standards. If you’re managing the deliveries, you’ll need to have suitable office space. Whether you choose to work from home or rent commercial space is down to you.
5. Create a business plan
This will help you put your ideas down in writing and ensure you have the resources to create a viable business. You’ll need to think about funding and financial projections. You should also include all your thoughts on the business’s location, target market and operations. If you need to secure funding, your business plan will be scrutinised by lenders, so it’s vital you get it right. Although it should show your future business in the best light, your plan should be realistic, rather than idealistic.
6. Register your food delivery business
When you start a new food business, you need to register it with the local authority. You need to do this at least 28 days before opening. Doing so is free and can’t be refused. Head to food.gov.uk for more details.
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7. Buy all your materials
Compared to lots of other franchise sectors, food delivery businesses don’t actually require you to have a significant amount of capital. If you’re thinking about starting a home-based business, you’ll most likely already have lots of the materials, appliances and utensils you need already. You might need to purchase the following, though:
- Large food containers to store food after cooking
- Large pots and pans
- Meal containers and utensils for the delivery
8. Make sure everyone knows about your exciting new business
Your local customers will determine the type of marketing techniques you’ll use. Local radio spots could be used if your target demographic is families and posters will work well in urban areas with high footfall. The older generation may be more likely to frequent community groups, garden centres and bowls clubs, so that would be a good place to start for that demographic.
Today, there are very few businesses that wouldn’t benefit from social media marketing, so create business profiles on popular platforms like Facebook, Instagram and Twitter.
Start a food delivery franchise unit today
Times are changing. Where people once used their leisure time to socialise in local pubs and restaurants, the home has now become the entertainment venue of choice. Having friends over for food allows people to control what is eaten and even order affordable, healthy options – as well as the usual fast food – right to their door.
If you’re interested in investing in a home delivery food franchise, there is a wide variety to choose from, so there is bound to be an opportunity that's perfect for you.
Becky Martin, Point Franchise ©