To boost revenue and attract new customers in 2023, restaurants are bringing alternative revenue streams to the table.
Many food business owners have become quite adaptive over the last few years, learning to shift gears in a moment’s notice. From meal kits to merchandising, e-Cookbooks to ghost kitchens, many in the restaurant industry tapped into new streams of revenue to survive some of the food industry's choppiest waters. But in 2023, during times of smoother sailing, many of these once-thought-to-be-temporary solutions have taken a permanent seat at the table.
Starting a Meal Prep Delivery Business in 2023
While the initial hype around meal prep business may have waned, it continues to be a relevant option for customers seeking convenience, looking for ways to save time, and exploring new cuisine.
If you’ve given thought to adding a new stream of revenue by starting a meal prep business, 2023 could be the perfect time to add a twist to your restaurant’s delivery repertoire.
A definite take-away from those times we’ll never forget, meal prep kits are a revenue stream that restaurants can introduce to earn more profits through already existing delivery operations.
Meal prep kits can come in various forms. You could sell pre-cooked meals that customers assemble themselves, like a make-your-own-taco box, pizza making kit, or kit complete with frosting and treats to decorate your own birthday cake.
Another option is creating a DIY kit that includes pre-measured raw ingredients with recipe cards for customers to cook a dish from start to finish. Keep in mind that some ingredients like your restaurant’s signature sauce, custom marinades, or time-consuming components should be made in advance and packaged as an ingredient.
Because restaurants are already set up for food prep, meal kits are a natural way to add additional income to your delivery operation without incurring additional overhead costs. It’s just a matter of coming up with some creative packaging and including easy-to-follow directions.
Make sure to include something in each package that your customers can hold onto: a fridge magnet, a shopping list pad, or a kitchen tool featuring your restaurant’s name and logo. Your customers will enjoy preparing your restaurant’s favorite dishes at home, and when they’re ready to let someone else do the cooking, your restaurant will be at the top of their mind.
And even though we’re just heading into summer, it's never too early to start planning for the holidays. Promoting your meal kits during the holiday season works twofold: not only do they make a great gift, but they can expand your restaurant’s awareness and customer base.
Bonus points of delivering meal prep delivery kits:
Meal kits keep your restaurant on your customer’s mind
They can easily be created using your existing staff, inventory and kitchen
Meal kits are a creative way to add extra revenue
Like food trucks and branded merchandise, meal kit packaging and enclosures can help to expand your market reach and build awareness of your brand without spending money on paid advertising.
Once you’ve decided to add a meal prep delivery service to your menu, it’s time to choose the concept. We’ve put together this guide to help get you started.
10 Tips for Starting a Meal Prep Delivery Business
1. Choose your niche
Does your restaurant already serve a particular cuisine and you’d like to create a meal prep business that compliments your existing menu? Or are you thinking about going in a completely separate direction and trying something new? The first step is to decide on a niche.
2. Know Your Target Market
Once your concept ideas are in tow, think about who would benefit from this delivery service. Whether it’s everyone and anyone, busy families with kids, people who want to learn how to cook, or those who have no interest in cooking at all and just want easy-to-follow recipes, make sure you keep this person in mind when designing your menu.
3. Write a Business Plan
Whether you’re starting a meal prep food delivery service from your existing kitchen or plan to operate out of a separate commercial kitchen, you’ll need to write out a business plan. A business plan lays the foundation of your business and can help you get loans from investors, forecast your sales, stay organized with the tasks you need to complete, and map out any gray areas about operating your business. Your business plan should include the following:
Executive Summary
Company Description
Concept and Menu
Management and Ownership Structure
Employees and Staffing Needs
Market and Competitor Analysis
Advertising and Marketing Strategies
Financials
4. Find a Workspace
The next step to starting your own meal prep business is to find a workspace that is best suited for your needs. You could either expand your current restaurant to expand the reach of your menu or operate out of a ghost kitchen.
Ghost kitchens, also known as dark, virtual, shadow, commissary, cloud, or delivery-only kitchens, are commercial cooking facilities that are not attached to a brick-and-mortar restaurant. There is no physical storefront, no front-of-the-house staff, no seating, no space for customers to pick up takeout, and no parking. In fact, the only cars stopping at a ghost kitchen are delivery drivers.
Simply put, ghost kitchens are delivery-only haunts with no internal space for customers to drink or dine. Though they can technically coexist on the grounds of an existing restaurant in a completely separate kitchen, ghost kitchens are often based in smaller, less desirably-placed commercial facilities or host kitchens. But regardless of where the kitchen is located, these operations are for delivery only and customers order exclusively online, and are ideal for a meal prep kitchen.
When deciding on your workstation, you’ll need to consider space for the following;
Kitchen - This is the most important room of your business. There should be enough room in this kitchen for the size of the operation you will handle, as well as all of the necessary amenities to recipe test or prepare your meal prep business.
Packaging Station - A specific place for packaging and putting together your meal prep kits is needed for proper organization, handling, and keeping track of orders.
Delivery prep - Make sure you have optimal refrigeration storage space to keep your meal kits cold before loading them into delivery vehicles.
Office Space - A designated place for desks, computers, and phones for your accounting, marketing, and customer service teams.
5. Obtain Permits
Starting a meal prep business requires special permits. Below are some of the permits you’ll need to get your business off the ground and running:
Employer Identification Number (EIN)
Seller’s Permit
Business License
Food Handler’s License
Catering License
Health Department Permits
Zoning Permits
Dumpster Placement Permits
6. Order Supplies
To make your product, you will need the correct supplies to start making meal prep food deliveries. Below are a few necessities you’ll need to get started:
Ingredients
Utensils
Paper goods
Napkins
Meal prep containers
Delivery supplies
7. Set Up Your Delivery Strategy
Before any of your meal prep kits can reach your customers, you’ll need to be decisive on a delivery strategy. Will you hire your own drivers? Will you rely on third party delivery platforms? Or will you work with something in between?
Sauce is a commission-free pickup and delivery platform that puts local restaurants first and provides customer-friendly ordering, featuring tools that drive high-margin revenue directly through existing online assets, backed up with the best competitive local delivery costs in the market. If you’re new to the food delivery business or if you’re just adding a new meal prep service to your existing business, it’s best to weigh all of your options.
8. Create a Website
Your website is one of, if not the only, place where you will get your sales. Therefore, your website needs to be top-notch and performing at its best. Investing in a great website that’s user friendly is the best way to obtain sales. You can create websites for free by using Squarespace, Weebly, or Wix, and you can pay a small amount for domain names and cool business features. These types of websites also provide pre-made templates, so you can browse and select one that speaks to your business’s aesthetic.
When choosing your template and creating your website, think about the colors, pictures, and fonts you will use to target your key demographic:
If your concept prioritizes simple ingredients that make the meal easy to put together, try to keep the website minimalist
If your concept prioritizes plant-based eating, use bright, fun colors that match the hue of fresh vegetables
If your concept prioritizes omnivore eating, studies have shown that warm colors such as red, orange, and yellow make people hungrier rather than cool tones. You could also put drawings of animals and vegetables together in your design.
9. Hire Staff
If you plan to operate out of your existing kitchen, you can utilize the great crew you’ve already gotten onboard. This takes the hiring process off the table. But odds are you’ll probably need to hire some new members to your crew at some point, especially if you decide to operate out of a completely separate ghost kitchen. In this case, you may have to start from scratch. Your existing staff is a great resource. Ask them if they’d like to pick up additional shifts or if they know anyone that they could recommend.
10. Advertise
Once you have your target audience identified and have found ways to stand out from the competition, it’s time to take that information and start getting the word out. Below are some great, and oftentimes free, ways to market and advertise your meal prep business:
Social media: - Driving traffic to your restaurant’s website is essential for attracting customers, increasing sales, and boosting your bottom line. Social media, email, radio, direct mail, and print, are all effective channels for getting your business’s name out there. With apps like Facebook, Twitter, and Instagram, you can post, update, and inform customers of all of your offerings.
And since the shortest distance between two points is a straight line, there’s probably no better, easier, and more cost-effective way to draw a connection between you and your target audience than to reach them where they spend their time. And based on some very compelling evidence, much of their time is spent on Facebook.
For more information on marketing via Facebook Advertising, see our blog post, How to Use Facebook advertising to Drive Traffic to Your Restaurant’s Online Menu.
Direct mail marketing: Though the common belief is that today’s younger consumers are digital natives, glued to their smartphones, and only reachable through social media, the truth is, this age group responds to a marketing channel that’s been around for centuries and is now more dynamic than ever: direct mail. Direct, to the point, and tangible, there's just nothing that has proven itself to sell takeout and delivery than good old school paper in the mailbox.
For more information on how to use direct mail to market your business, see our blog posts, Think Ink: Direct Mail Marketing For Restaurants.
Email marketing - Some may be under the misconception that email marketing is dead, but the reality is that this type of marketing is still alive and kicking. Email marketing, in fact, is one of the easiest and most cost-effective marketing tactics a food service business of any kind can use to increase sales, attract new customers and entice existing ones to keep coming back.
Promotions for new customers - Utilizing this strategy is a great way to spread the word about your meal prep business. When a customer purchases a certain amount of meal kits (either all at once or over time), give them a gift certificate to send to a friend that offers one free meal kit. You can also use holidays as times to create discount codes for celebrations such as Valentine’s Day or a New Years' Eve night indoors.
Loyalty program - Show your regular customers your appreciation for their business by creating a customer loyalty program. For example, for every 10 meal kits they buy, throw in a new one they haven’t tried yet for free! Providing a new meal kit will expand their knowledge of your menu and will introduce something new that they will love and crave.
Free press - Public Relations or PR is an essential part of food service marketing that not only helps create awareness about your business, but it builds credibility. Use the power of the press to generate free publicity by creating a press release announcing your new business and submitting it to local print, broadcast, and digital media channels.I
Spot television- Incorporating television advertising into a meal prep business’s marketing plan can be highly effective for increasing brand awareness and driving customer traffic. Television advertising can be highly engaging and memorable, especially when compared to other forms of advertising such as print or radio. By using sound, motion, and visual elements, television advertising can create a strong emotional connection with viewers. And contrary to popular belief, aside from the initial investment into video production costs, television advertising can actually be one of the most cost-effective forms of advertising.
Now that you’ve become familiar with the ins and outs of how to start a meal prep delivery business, it’s time to start planning so you can make your dream a reality. Whether you’re creating meal kits or fully prepped meals to quickly heat up, starting a meal prep delivery kitchen can be a profitable new revenue stream to add to your food service business in 2023.
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By Eileen Strauss
