How to start a food delivery service

There are loads of niches within the delivery service industry, but few make us as happy as a food delivery service. Nothing parallels the joy of dreaming up a bowl of Pad Thai and having it magically appear at your doorstep.

While there are some giants in the field to compete with (Postmates, Grubhub, Uber Eats) there’s still room for the little guy. If you're looking to make some cash and manage your own schedule, delivery services are one of the more desirable business models.

In this post, we’ll give you the guidance you need to get your online food delivery service off the ground, so you can start making people’s days.

What is a food delivery service?

A food delivery service is a business that delivers edible goods to a paying customer. The most popular ones, like Postmates, Grubhub, and Instacart, are probably already on your phone.

Food delivery services may have boomed in the days of social distancing, but their popularity has been a long time coming. As of 2021, 60% of Americans order take-out at least once a week, and by 2024, the food delivery service industry is expected to reach $32 billion.

Why start a food delivery service?

Starting a delivery service can give you the freedom to run your own business, work when and as much as you want, and help out other small businesses in the process. And because you don't need to rent a storefront or hire a large team, they won't break the bank with startup costs.

If you already have a vehicle you can use to shuttle goods, you could start a restaurant delivery service (or any other kind of food delivery service) for even less.

According to recent census data on delivery workers, couriers can make upwards of $20/hour, with some making more than $50,000 a year—and that’s for couriers who don’t necessarily work in food or own their own delivery business. If you’re managing the whole operation, the profits could be even higher.

So, how do you get started?

How to start a food delivery service

Like any new business venture, starting a delivery service requires a bit of forethought and planning. Will you use a personal vehicle, or buy a new one? What types of restaurants or businesses will you be supporting? Will you deliver meals, groceries, alcohol, or something else?

It’s easy to get overwhelmed by the options at the beginning of the process. But by following these five steps, you can get on the road in no time.

1. Decide what you’ll deliver

Food delivery is already a niche within the delivery service industry, but it's a vast category all on its own. When starting your courier business, it’s a good idea to centralize your efforts on a target market within the larger food delivery scene.

Here are a few types of food delivery services to consider.

Prepared food delivery

Most meal delivery services we’re familiar with operate in this space: think of your favourite food ordering mobile app, like Postmates, Grubhub, or Uber Eats.

If you work in this sector, you’ll deliver food to customers who have ordered online. From the restaurant to your door, this type of food delivery service is understandably a popular choice.

While there’s still room for new prepared food delivery services, it’s worth noting that the big players in this industry will have mostly cornered this market. If you’re a food delivery startup, you’ll likely have a harder time connecting with restaurant chains that already work with a popular food delivery app.

Instead, consider what you can offer your local restaurant owner. This might be exceptional, personalised customer service, faster deliveries, lower operational costs, and being readily available online and via phone.

Marketing yourself as a dedicated delivery driver to one or two restaurants is a better way to build up your client base than presenting yourself as a Postmates alternative.

Grocery delivery

If you’re looking for the widest target audience possible, starting a grocery delivery service is a great option. Everyone needs groceries, and nobody loves going out to get them. Valued at $39 billion as of 2021, Instacart takes the cake as the most popular grocery delivery service around.

While you could sign on to be a shopper for Instacart, you could also try your hand at starting your own grocery delivery service. If you opt for the latter, consider connecting online or via phone with a local grocer or food co-op that doesn’t use Instacart. This can boost your chances of making a profit.

You could also distinguish yourself from the other guys by offering delivery routes to more rural areas, or non-standard delivery times for customers with busy schedules.

Alcohol delivery

To be the beer delivery man: every frat boy's dream.

Alcohol delivery services like Drizly are becoming increasingly popular. By starting one, you can eliminate the last-minute beer run, help cut down on drinking and driving, and make yourself a pretty penny.

Have a favourite brewery in your hometown? Consider partnering with them to drive six-packs or growlers to paying customers. Because alcohol is prepackaged, you and your favourite watering hole can cut down on overhead costs like food carrier bags and paper packaging.

B2B food delivery

Not all food delivery services need to operate between restaurant and customer. There are fewer established options in the business-to-business (B2B) space, meaning more room for you and your new food delivery platform.

Starting a B2B food delivery business can look like a lot of things. You could deliver produce from a farm to a commercial kitchen, coffee from a local roaster to an office, or cakes from a bakery to an event planning company. Working between businesses is a great way to support local organisations, and create a niche for yourself in the process.

Juice and health food delivery

Are you a sucker for a good celery juice or turmeric supplement? If so, you may be inclined to focus your delivery service on health foods. With wellness culture on the rise, specialising in health food options is a solid business plan.

You could connect with a juice bar, a local organic farm, or a herbalist in town to hand deliver wellness products. Looking to capture the eco-conscious clients in the wellness world? Consider delivering via bike, or connecting with charitable organisations that allow customers to offset their carbon footprint with each purchase.

Meal kit delivery service

Starting a meal kit delivery business is one of the more unique options on this list, though it's not a great fit for everyone. If you happen to be a chef, farmer, or baker, though, starting a meal delivery service might be an excellent business strategy.

The most popular one in the business is Blue Apron, which sends customers meal plans, pre-portioned ingredients, and recipes for how to use them.

If you have the means and the expertise to start a meal kit delivery business, or you can partner with someone who does, it can be a great option. Meal kits are on the rise in terms of popularity, and are expected to become a $33 billion industry by 2026.

2. Figure out the delivery logistics

Once you’ve decided what kind of food delivery service you plan on starting, it’s time to work through the logistics.

There are four main things to get in order: your delivery vehicle, your business registration, your budget, and your marketing strategies.

Find your delivery vehicle

You can’t start a food courier business without a way to transport food. While a car is the most popular option, you could also use a bike, a van, or even a motorcycle.

Regardless of the type of vehicle you use, you’ll need to get it properly insured and registered. If you’re driving a car, you’ll need commercial auto insurance or automobile liability insurance. If you’re opting for something a little bigger, like a semi or a delivery truck for B2B deliveries, your delivery team may need additional licenses or insurance policies.

When choosing your vehicle, consider the following options.

• Startup Cost: It goes without saying, but using a car you already own will be quite a bit cheaper than buying a new one.

If you do need to buy a vehicle, consider shopping used to help lower start-up costs. Just be sure to check the mileage and engine health if you do— paying thousands in repairs will undo the savings you accrued by buying used.

• Ongoing Cost: If you plan on delivering food by motorized vehicle, paying for gas will become an ongoing cost. Fuel-efficient vehicles will help keep your budget manageable. In addition to gas, larger cars or trucks will need regular tune-ups and vehicle maintenance.

Ongoing costs will be different depending on what kind of food delivery service you choose to start. Prepared food delivery businesses might need to purchase and maintain only a few insulated food carriers, whereas B2B delivery services transporting larger goods may need moving equipment, dollies, or even a cargo van.

• Environmental Impact: According to new research from IBM, nearly two-thirds of American and Canadian consumers say it’s important that the businesses they support are environmentally conscious. In terms of making your delivery service green, the best option would be to make deliveries by bike.
  
  You could also opt for a hybrid or electric vehicle (which will save gas money and help save the planet), or optimize your food delivery route to avoid backtracking and wasting energy.

3. Register your business

Once you’ve got your vehicle, your niche, and your food product, it’s time to work through the nitty-gritty of your business plans. This means getting the legality of your business structure handled, and creating a budget.

To be frank, we’re not qualified to tell you how to avoid legal and financial ruin in your business. We can offer the research and some steps to get you started, but that serious stuff should really be up to you (and your lawyer).

Rather than telling you how to file your taxes, let’s do a quick rundown of what legal and financial hurdles to keep in mind when starting your food business. There are two main points to consider:

• Registering your business as a sole proprietorship or an LLC
• Calculating your rate and making a budget

The registration process varies slightly depending on your location, but a simple Google search will send you in the right direction. In the US, you can register your business online, in person, or through the mail.

When starting your food delivery service, you’ll have to decide whether you want to run it as a sole proprietorship or a limited liability company, or LLC.

A sole proprietorship is a business owned and run by a single person, whereas an LLC exists separately from any individual.

Of the two, a sole proprietorship is the simpler option. This route requires fewer start-up documents and will allow you to run the business under your name, making it a great option for smaller-scale operations.

An LLC requires a bit more work (and cash) to set up. It’s a good option for larger delivery services or those looking to run a business under a name other than their own. In an LLC, no single person is liable for claims filed against the business. Instead, the business itself is liable. Plus, unlike a sole proprietorship, you can file separate taxes as an LLC.

For fledgling food delivery services, a sole proprietorship is probably the way to go. But if you’re working in the B2B space or expanding, you may grow into needing an LLC.

4. Calculate your rate and budget

Making and sticking to a budget is essential when starting a food delivery service. In general, the largest start-up costs are vehicles, equipment, registration and insurance. Other factors like repairs, hiring employees, and marketing and advertising costs can come down the line.

Your budget will be naturally informed by your rate, or what you’ll charge for your deliveries. The price of your service will be a combination of your flat rate and any additional fees.

Here are some common fees you might include.

• Distance delivery fee (for delivering outside your usual range)
• Mileage fee (to cover gas costs)
• Surcharges for bulky or oversized orders
• Expedited or priority delivery costs (for urgently needed goods)

5. Decide on your marketing strategies

People can’t enjoy your delivery service if they don’t know it exists. Whether you choose to handle the marketing yourself or bring in a marketing professional, there are loads of ways to get your name out there and find more potential customers.

For service-related industries in particular, word of mouth is the golden standard for marketing. While that used to mean calling your dad to see where to buy a new set of tires, word-of-mouth marketing has moved online: to Google reviews, Yelp, and social media.

Many experts in the field are confident that online word-of-mouth marketing will grow to be even more influential than traditional advertising.

Regardless of the method you choose to market your business, the core concepts remain the same: if customers love it, they’ll become repeat customers. If they really love it, they’ll tell their friends about it. That’s how you go from a budding small business owner to a thriving entrepreneur.

Use Paperform to run your food delivery service

If you want to create a business that people rave about, you’ll need business management processes that are streamlined, sleek, and easy to use. To run a food delivery company in particular, you’ll need to find organized ways to handle the following processes:

• Offering quotes
• Taking orders
• Processing payments
• Receiving customer feedback
• Tracking orders

Paperform can handle those first four processes for you. Whether you opt for one of our templates or create your own, you can create order forms, payment pages, and feedback requests that match your unique branding and personality.

All your order forms come with automatic taxation and receipt generation and can accept payments from dozens of payment providers. We can’t track orders yet, but you can partner with apps like Route or Shop to make your food deliveries trackable for customers.

And with our library of over 3,000 direct and Zapier integrations, you can connect with all your favourite apps to automate everyday processes. Connect with your CRM to update customer data from food orders, or integrate with Gmail to send automatic emails about upcoming deliveries.

Need a way to calculate a price for a complicated delivery? No problem. With Paperform’s advanced calculations, you can get a unique quote, complete with your specific surcharges and fees, in just a few clicks. Your customers won’t be surprised by any hidden fees, and you don’t have to go through the headache of calculating individual rates.

Want to hear from your customer base to improve your business? Choose from one of our 39+ feedback forms to create stylish surveys that customers won't dread filling out. You can even offer coupons and discount codes to those who complete your forms, combating survey fatigue and improving retention.

Get on the road with Paperform

With a little bit of planning, some initial investments, and a strong work ethic, you’ll be on your way to running your own food delivery service in no time.

No matter what you choose to deliver, Paperform is here to help you get it done. Give us a go today with our 14-day free trial and discover all the ways we can help you get your food delivery service on the road.