How do I start a food delivery business from home?

Are you passionate about flavour or think you’re onto the next culinary trend? Find out how to start a food delivery business from home in this article.

We’ll cover all the essential elements you’ll need to set up a new business making great food for on the go, including:

• How to set up your business legally
• How to develop a food product
• How to research and engage your target customer
• How to budget and plan your business
• How to manage your finances more effectively with Countingup

Starting a business is an exciting time for new entrepreneurs, and you have a few different options when establishing your business legally. This step is necessary as you’ll be able to declare the new income you’re receiving and pay any tax on your profits.

One of the quickest ways to become a sole trader, as all you have to do is register for Self Assessment with HMRC. As you apply, you’ll need to verify who you are and disclose some information about your new business. However, this isn’t your only option. For example, if you have big growth plans, it may be a better idea in the long term to start a limited company. Learn more about the different advantages and restrictions each option might present in our article How to set up your business: Sole trader or limited company.

Whatever method you choose, you’ll need to register with your local authority for a food business licence as a food provider. It’s free but make sure to register at least 28 days before opening to avoid fines or other legal trouble.

While the early days of your product development might involve lots of fun taste tests, there’s lots more to food businesses – particularly the practicalities of delivery and travel. That’s not to say flavour and taste aren’t important, of course, but modern consumers are looking for other elements in their food purchases.

Some key things to consider are:

• Delivery: depending on how popular your business gets, you’ll need to sort out the logistics of how to deliver your food orders. Can your business benefit from offering batch orders to reduce your transport time? Do you know how to expense vehicle costs?
• Allergens and food safety practises: try to minimise the presence of allergens in your recipes and keep a sanitary cooking/baking space. If you can’t remove allergens entirely, ensure your preparation and cooking spaces don’t allow for any cross-contamination and warn customers if you can’t guarantee this.
• Cultural and dietary preferences: consumers are very picky when it comes to their food. Try to make accommodations for dietary choices like halal meats and vegan/vegetarian options.
• Packaging: customers like to see eco-friendly packaging they can dispose of easily. As you’re planning to deliver your food, you’ll need to make sure any packaging you use manages temperature and grease properly. Otherwise, you may have unhappy customers with lukewarm food and sticky hands. 
• Shelf lives: as you prep ingredients for storage or later delivery, you’ll need to carefully manage temperatures and hygiene. Fortunately, local delivery can reduce your spoilage as you have less transit time. 
• Flavour and presentation: customers won’t come back if your food doesn’t taste nice, but they might come in if it looks nice. Experiment with different ingredients and methods to find a recipe that’s as eye-catching as it is mouth-watering.

If your business is to be successful, you need to know your target customers well. 

Food delivery businesses have a number of options in what they offer to customers, ranging from interesting flavours and dedicated cultural cuisines to customer classics done to a high standard. To know more about what sort of customers might enjoy the food you plan to make and how to advertise to them effectively, you’ll need to conduct market research. Find out how to do this and more in our article How to write a business plan and How to create a marketing strategy for small businesses.

As a food delivery business, you might find visual advertising is more effective. Therefore, you can consider using platforms like Instagram or Facebook to show off your tasty dishes. However, many successful food businesses can also get established by offering free samples to entice customers with great smells and scrumptious nibbles. 

Remember also, a key selling point of your business is ready-made food that can save your customer time. Consider how you can work this point of value into your advertising.

Every business needs a budget –– and small businesses are no exception. Using one, you can make sure your new venture makes every penny count and maximises your future profits.

Budgeting for business is a fairly standard practice, which is why we’ve got advice available in our article How to budget for starting a business. 

Food delivery businesses need to pay particular attention to their overall profits. While new businesses often lose money for their first few months while they set up, they manage to grow to a size where they make a profit again. 

However, many hospitality and food businesses operate on thin profit margins. It’s therefore vital to your success that you can work out how strategy and investment changes to your business affect your profits. Learn how to calculate your business’ profit rates with our article How to calculate profit margin.

When you’re starting a new business, bookkeeping and accounting can seem like daunting subjects.

Built for small business owners, the Countingup app is the two in one business current account and accounting software. It automates time consuming bookkeeping admin, giving you more time to focus on growing your business.

Countingup provides automated invoicing tools and receipt capture reminders so that you can easily keep organised records when you’re on the go. You can also take advantage of the real-time profit and loss reporting feature so you can get insights into your business at any moment. 

Find out more about Countingup here and sign up for free today.