How to Start Your Own Food Delivery Business in 2024?

Days are gone where people tend to stand in a long queue to get their food or wait at the restaurant table to eat food. Nowadays people prefer to get their food delivered at their doorstep irrespective of the time or location. Food delivery has become one of the lucrative businesses considering the overwhelmed response it gets from the people around the world. 

Many entrepreneurs and startups are capitalizing this opportunity by starting a food delivery business in their region and getting huge revenue from it. Are you an entrepreneur thinking of how to start a food delivery business?, Then this is for you. As the world moves towards digital transformation investing in developing your own food delivery app can be the great choice as people are preferring more online orders and door delivery. 

In this article, we will explain in detail the process to start your own food delivery business, challenges involved in it, Building your own food delivery app and monetization strategies you can use to generate more revenue from it.

Is it Worth Investing in the Food Delivery Business?

The food delivery business takes place as it creates momentum to grow and step up to the next level. Analyzing the size of the food delivery market according to a Statista report and forecasting this year 2024, it will reach $1.22 trillion US dollars, with a CAGR expected from 2024 to 2029 at a rate of 9.49% at a value of $1.92 trillion US dollars. Thus, more valuable insights may be nullified beyond the limits with other increasing factors like smartphone and internet usage.

Attracting these results will play a role in building your food delivery app before you enter into an analysis of many things like market analysis, operational cost, creating your unique selling point (USP), organizing food delivery menu items, and what values you offer to your users. Let’s see all of these factors that are affirmative of starting a food delivery startup.

Choosing the Right Food Delivery Business Model

Before taking action to start a food delivery business, everyone should know what are the different business models and how these models would be adopted for their business.

Aggregator Model

In this business model, the food delivery business can act as a connecting partner between restaurants and consumers. That is associated with a lot of restaurants and food outlets. This way, a lot of customers can choose their favorite dishes on one top-roof platform. By using this method, you can accumulate commission from restaurants in the form of platform, customer, or delivery charges. It depends on their wishes.

1. It's easy to expand your audience reach by adding a lot of restaurants and food outlets.

2. No need to use your in-house delivery staff or kitchen; that doesn't require a lot of investment

3. Offer diverse cuisine varieties to cater to your audience through your platform.

Examples of real-life food delivery businesses using this methodology include Delivery Hero, FoodPanda, Grubhub, and UberEats

Full-Service Business Model

If you have successfully running a restaurant business, everything from meal preparation to delivery can be done in-house. This way, you can get more control over everything, and you’ll earn more. It also requires a huge investment to prepare. This model is used in real-life examples of brand names such as Domino’s, KFC, and McDonald’s.

Order and Delivery Model

In this model, food preparation businesses or restaurants hire one reliable delivery service partner for their food delivery business. They will manage their food orders and deliveries quickly and efficiently, and you can also track their delivery commitments in real-time data. 

For that, the food delivery service provider charges delivery fees because they will reach our ordered food items at the correct customer doorstep and on time. Doordash, Uber Eats, Grubhub, Deliveroo, Meituan, Swiggy, and Zomato are brands using this business model.

Also Read: How to build a food delivery app like Uber Eats?

How to Start a Food Delivery Business?

Too many try to start a business but only the least succeed. Those least businesses succeed because of the steps they carried out before starting the business. So before starting a business every entrepreneur should be aware of a few things and need to tick all the boxes in order to succeed in the food delivery business. So here we have explained the steps to be carried out to start a food delivery business. 

Market Research

Initially, start your market research for your food delivery business. At that time, analyze your targeted business areas and who you targeted, like youngsters, families, and professionals; construct your restaurant menu items; and insist on your money-making ideas.

Analyze Competitors

In the food delivery business, two types of operators have run their online delivery businesses, such as a platform for a customer and a restaurant for a consumer. Those two operators have different ways of handling their business operations in terms of food delivery partners, pricing strategies, online menus, and marketing techniques. These are such things to compare your business plans and determine which stage you are weaker in.

SWOT Analysis

Your prepared data will be used to analyze your business strategy in terms of strengths, weaknesses, opportunities, and threats to compare important operations to those of your competitors. To elevate your SWOT analysis in all areas and acknowledge it, find out which areas need improvement in your strategy and deficiencies.

Legal and Regulatory Considerations

Register your business with a targeted, relevant government to get legit government licensing approval for a food delivery business and operations. Follow the government's guidelines for food safety and public welfare. Secondly, collect all necessary legal documents to apply for your business insurance, which may cover your business liability and property damage.

Developing a User-Friendly Food Delivery App

Mobile apps are everywhere. So never let any opportunities that can help lead your business to new heights. So to start an online food delivery business create a user-friendly food delivery app and stay ahead of the curve. 

Usually entrepreneurs choose to build their food delivery apps from white label solutions or from scratch. It may depend on their needs. Usually, most of them are seeking to start food delivery apps by choosing white label solutions rather than building from scratch as it saves them more cost and time. But before taking action, there are some steps to go through and pass to find one perfect option.

Deciding Cost and Budget

Overall, the cost to start a food delivery business ranges from $5,000 to $50,000 USD, depending on the inventory management, licensing requirements, technology implementations and others embedded in it. Let’s inquire about the costs that will take place to determine food delivery business.

Technology Cost

Mobile app development cost is determined by various factors such as app complexity, functionality, app development frameworks , team size, location, and other factors. Is there any cause that consumes a lot of money to develop? To get rid of your fixed budget rate, by partnering up with one reliable mobile app development company, they will guide you to attain your desired business. 

Do you want to develop your food delivery from scratch? It will take a lot of time and the cost will be around $45,000 to $80,000, but on the contrary developing with a food delivery script ranges between $5,000 to $35,000.

Marketing Costs and Customer Acquisition

Advertisements and marketing will play an important role in increasing your overall budget. If your food delivery business advertisement focuses more on paid ads on social media, banner ads, video ads, and mail ads, it may consume more of your fixed budget.

All set of your business, then promote your food delivery services for your customers in all potential marketing ways, such as creating highly engaging quality content on social media platforms like Facebook, Instagram, Twitter, and Snapchat, influencer marketing, App Store, and Google Play Store optimization in follow all the platform guidelines, and do SEO optimization. Initially, give promotional offers such as free delivery, reward points, personalized exclusive offers, and cashback to your first-come audiences.

Set Up Order Receiving Channels

In current trends, brands use many channels to reach customer orders, including phone calls, text messages, WhatsApp, mobile apps, websites, and social media. You can provide a personalized customer experience for your users using a website or mobile app to make their food orders easier to track with GPS technology for customers and restaurants/delivery partners. 

You can also integrate point-of-sale. With this way of order-receiving, you can also push your advertisements via notifications and avail personalized offers for your platform users.

Set up Delivery Logistics and Operations

Decide on your delivery medium because it’s important for the food delivery business. Generally, food delivery businesses use their staff or partner with delivery partner companies. 

To make a business contract with your delivery partner with a lot of combinations like rules and regulations in a delivery distance coverage area, fixed wages, bonuses for outperforming, working hours, peak hour delivery, festival delivery, and days off. Your chosen delivery partner comes under your business guidelines and follows the contract rules.

Monetization Strategies For Your Online Food Delivery Business

Before you take the business leap, you must know your monetization methods and what ways you prefer to choose them. How doubtful-minded are you? then here we provide the relevance of your doubts

Commission on Orders

By using your food delivery mobile app or website to place an order through a partnership restaurant, they will pay a commission fee for order placements. This commission is a fixed rate of 20 to 30% depending on multiple factors like order quantity, value, or restaurant category.

Impose Delivery Fee from Customers

You can charge your delivery fee depending on the customer‘s order of food from top restaurant menus. These delivery charges may vary depending on the distance traveled and the quantity of food. This delivery fee covers the platform's operational costs and delivery personnel.

Subscription Model

Avail premium subscriptions for your app users on a monthly, quarterly, or annual basis. This premium plan offers the customer free delivery for all orders and a minimum amount. Platform users can utilize priority meal delivery, exclusive beneficial offers, and discounts.

In-App Advertising

Do partner with restaurants and other food businesses to promote their product using your platform. That concerned third-party client will pay for the ad placed through your app or website. However, using this ad campaign to induce your audience to buy the product incurs an additional commission.

Dynamic Pricing

Implement this dynamic pricing during peak hours, highly demanded days, or festival days. Using this technique temporarily increases delivery prices to give an incentive to your delivery personnel and improve supply chain efficiency.

Premium Services

Introduce extra add-on services for only premium plans that cover extra features like diet customization, expedited delivery, contactless delivery, pre-scheduled delivery, and a lot more. These services are more appealing to attract your premium customers.

How Can Appticz Help in Starting Your Food Delivery Service?

In the on-demand industry, Appticz has pro-longley providing on-demand mobile app development services for many kinds of businesses. There is no place where we have not left our footprints in the on-demand industry. At this food delivery business, we have excellent knowledge of how to address the client's pain points and give future-centric business suggestions to build the platform using the client’s desires. 

We have a surplus of business data and know which business ideas are suitable for your business in the long-term and our techies will not be the least in technical knowledge. We will build your platform to be safer and more user-friendly in all aspects. Contact us to get started.