How to Start A New Food Delivery Business In 2023?

When you think of starting a food delivery business, generally, you might assume cooking and packing food, recruiting teams, creating a web portal, and getting the orders at the place, right?

Well, it sounds exciting to have your own food delivery business since the concept of online food delivery business is revolutionizing the entire food industry in a dramatic way. 

If you turn the time wheel three decades back when the first-ever online food delivery business was started by Peapod company in 1989 in America, since then, many companies have established their ventures in this sector. 

Uber Eats, Just Eat, GrubHub, Deliveroo, DoorDash, Delivery Hero, and many more are earning millions and billions of dollar revenues from this booming business model. 

Today, food delivery has become a multi-billion dollar business concept. 

So, it makes obvious why you feel aspired to start your own food delivery business. 

But wait

Starting a new food delivery business is not as simple as you imagine. This sector has evolved in the era of Web 1.0 – Web 2.0. But since the current world is driven by mobile-first approach, establishing a food delivery business requires a different strategy. 

Thus, to assist you with this, we will guide you on how to start a new food delivery business in 2023. You will learn many important things that would help you enter this sector flawlessly and achieve the best results. 

So let’s dine into 

What Is Food Delivery Business?

Food delivery is a business model where the service provider or platform owner provides food delivery to the customer’s doorsteps. It is a kind of courier service in which restaurants, offline stores, or third-party vendors offer on-demand food delivery service to consumers through a web or mobile application. Consumers simply have to browse the application to select their desired food and order them online and get it delivered to the given address or location. 

Current Statistics of Food Delivery Market

Food delivery allows restaurants and food businesses to expand their reach or establish their individual venture. It empowers both business owners and consumers by providing fast, convenient, and cost-efficient accessibility to ordering food. 

Therefore, this model has grown tremendously in the past years. If you see the latest statistics, the food delivery industry has become one of the highly profitable market segments for newcomers and existing businesses. See the below stats and you would realize how quickly and immensely this sector is expanding its zenith.

1. The revenue of the online food delivery market is estimated to reach 1.45 Trillion USD with a CAGR of 13.68% by 2027 from 0.77 Trillion USD in 2022. 
2. Grocery delivery alone is projected to show an impressive growth of 22.8%  by 2023. 

   
   3. In the USA, DoorDash is the most famous food delivery mobile app which alone holds 50% of the entire market share. And Delivery Hero is the top performer in the UK.

How To Start Your Own Food Delivery Business?

Food delivery involves various operations. It includes market research, application development, feature listing, getting essential licenses, and other important things. So to start the food delivery business, there are some key steps that business owners need to follow. 

1. Define Your Niche

Food delivery sounds like a specific kind of service. But in fact, it is a broad domain. There are different models to choose from. There are numerous foods and services to offer to customers. You can either work as a mediator or a full-stack owner, or find a mid-way. Therefore, the first important step is to define your niche. 

1. What particular thing do you want to offer to your customers? 
2. Do you want to offer order-only service or provide additional services and perks? 
3. Who is your target audience? 
4. Which specific location or country zone do you want to target?

Based on your business goal and requirements, you should have a clear vision and path. This would help you develop an effective and result-driven food delivery application or platform.  From here, you will provide online food ordering and delivery services to customers. 

2. Choose The Food Delivery Model

There are different models in the food delivery business. Depending on your business goal and methodology, you should choose the appropriate model. Selecting the right model is crucial since all the further process and operations will be managed through it. Hence, choose which suits best to your requirements. 

• Order-Only model
• Order & Delivery Model
• Full-Stack Model
• Cloud-kitchen mode
• Meal delivery service
• Meal-kit delivery service
• Farm-fresh delivery service
• Grocery delivery service

3. Decide Your budget

To start your food delivery business, you need plenty of resources. A food delivery app, workplace, tools & technology, equipment, human workforce, marketing tools, delivery service vendor, etc. And to acquire all these things at a commonplace, you will have to invest substantial money. 

However, the investment also depends on your business size and how large the market you want to cater to. If you want to start at a local area level, then you can start with minimal resources. 

On a rough estimation, a startup may require between $15,000-$25,000 investment to start a food delivery business at a small level. 

But as much as your business size increases, the initial investment cost would eventually increase. Hence, you should take assistance from an expert business analyst or consult a professional company for creating a well-defined strategy. 

4. Create A Food Delivery App Development Strategy

This is the most important thing. Without having a food delivery app, you can’t think of running this business. A food delivery app is a mobile application that is used to manage all the food delivery business operations. This app would be used by all the key stakeholders. It includes customers, restaurants, delivery persons, third-party vendors, and the business owner. 

So, food delivery apps must include all the essential and additional features to allow every user group to use the services. In fact, the success of the food delivery business largely depends on the food delivery app. How well does it perform? What exciting features does it have to offer to customers? What technology does it incorporate for providing something unique or innovative? 

Thus, you should try to contact a dedicated food delivery app development company. They hold proven expertise in creating feature-rich and customer-friendly mobile apps for providing on-demand food ordering and delivery services. They use bespoke technology and integrate the latest trends. As a result, it enables the app to perform seamlessly and helps business owners generate good profits.

5. Ensure Legal & Financial Compliances

This industry involves many legal complications. Aside from developing the application and other setup requirements, you need to have the following things done in order to start a food delivery business-

1. Form a legal entity
2. Register for taxes
3. Open a business bank account
4. Get permits and licenses
5. Get business insurance

6. Launch Your Food Delivery Business

At this stage, you are all set to start your food delivery business. Your food delivery mobile app or web portal must be ready to be used. You should have a dedicated workforce team for managing internal operations. And setting up the whole business structure and ensuring legal compliance, the door to the food delivery industry is now open to you. 

But the task is not finished yet. There are still many miles to go. You constantly have to work on marketing and promoting your service since this industry is very competitive. You have to pay close attention to your competitors, how they are performing, and then devise a better plan. 

Different Food Delivery Business Models 

Food delivery is primarily an on-demand service that mainly focuses on delivering food to customers’ doorsteps. However, not every model works in a similar fashion. There are different models in food delivery services that work with a particular methodology. 

When you are planning to start a food delivery business, you need to select the model as per your business goal and service requirements. Here, we have mentioned the most popular models which are currently widely used across the entire food delivery industry. 

1. Platform-To-Consumer Model

This model is incorporated by third-party applications or platforms. In the Platform-To-Consumer model, the platform lists the nearest available restaurants or stores to customers based on their location. But the key difference is that the third party does not provide delivery service. They actually act as an Order-Only-Model platform. It only gives information about the local restaurant and allows users to make orders from partner restaurants. 

Examples: DoorDash, UberEats, Deliveroo

2. Delivery Service Aggregator

This model also falls under the Platform-To-Consumer Model but acts a bit differently. In the aggregator model, the food delivery platform acts as an intermediary between a consumer and multiple nearby restaurants. It works like an Order-and-Delivery Model that also takes the duty of providing delivery service to customers. Restaurants only have to cook the food and get it packed for it to be delivered as they received the order. Rest things are managed by the platform owner. 

Examples: JustEat, GrubHub, Delivery Hero

3. Full-Stack Model

The Full-Stack model contains everything in-house. It controls all operations right from cooking the food to managing the platform and taking online orders to deliver the food. In this model, mostly the food is cooked in cloud kitchens which solely focus on cooking and delivering food without having any dining facility. 

Examples: Kludio, Dahmakan

So, you have got a good understanding of what food delivery is overall and how it works. Now, when it comes to starting the food delivery business, you must need a digital platform to provide all the services. This could be either a web portal or a mobile app. 

However, when it comes to run this business, you would need both web as well as mobile application. But the secret key driver that determines your business success is food delivery mobile app. 

Food Delivery App: Why It Matters? 

It is evident that the food delivery industry has evolved in the age of the web revolution where people mostly browse websites for online activities. But ever since smartphones disrupted the entire industries and consumer market, the use of mobile apps emerged as the first preference for most online activities. 

Whether it is online shopping or exploring anything on the Internet, modern consumers today feel more convenient using a mobile app on their smartphones than browsing websites on laptops or desktop PCs. 

Since we all are living in a mobile-first world, not prioritizing mobile apps as the primary approach in the business model could lead to counter-productive results. Especially startups, small businesses, and single restaurants which run on limited resources. 

They need an effective and right strategy to efficiently utilize their resources and generate better ROI. Therefore, for food delivery businesses, strategizing their business considering the dominance of mobile apps on consumer behavior matters a lot.

For this purpose, mobile apps stand out as a proven method. See today’s popular food delivery companies. They all have witnessed huge success after adopting mobile apps in their business functioning. And the key reasons why food delivery business need a dedicated food delivery mobile app is mentioned as follow-

For consumers

• 24×7 service availability
• Faster and convenient accessibility
• Save time and money
• Real-time tracking
• Search nearby restaurants 
• Easy to order food online
• Notifications related to new offers and dishes

For restaurants

• Reach more potential customers
• Expand business reach
• Ease of managing online orders
• Attractive digital food menu
• Quick Monitoring of delivery 
• Opportunity to market 

For delivery persons

• Easy to manage orders in an app
• Hassle-free and convenient
• Save time and effort in delivery

Conclusion

Food delivery industry is growing at a skyrocketing speed. The massive adoption of mobile apps and huge convenience of on-demand food delivery services make it a highly profitable business model. The best part is that it provides a wider scope for every business size that wants to enter this promising sector. 

So, when you are planning to start a new food delivery business in 2023, you should consider all the above-mentioned things. Hence, it is better to consult an expert food delivery app development company that can assist you in developing a full-fledged food delivery app and assist in launching this business successfully. 

How MobileCoderz Can Help You in Launching Your Food Delivery Business?

MobileCoderz is the top-notch mobile app development company in the industry that provides best-in-class mobile app solutions to ranging business requirements. We have a big team of qualified developers, tech experts, and experienced business analysts who possess years of experience in developing result-driven business solutions. Our brilliant team can help you in starting your food delivery business by developing a top-class food delivery mobile app.