How to Start Online Food Delivery Business in 2023?

Avantika Shergil By Avantika Shergil  |  Jan 12, 2023  |  Business Strategy Delivery App Startups
Starting Online Food Delivery

The restaurant business has been doing exceptionally well for ages and there is no doubt about it. Now, whether you are already a restauranteur and your business is doing fine or you are an entrepreneur and thinking of venturing into a restaurant or food business, this guide on how to start an online food delivery business in 2023 shall show you the best possible way to expand your presence in the market. And the best way is to approach your customers through a digital platform. Hence, mobile app development companies that provide bespoke online food delivery apps are in limelight these days.

What is the food delivery business and why is it growing at a rapid pace?

A food delivery business is delivering food items to consumers at their doorsteps. Now, these food items may come from hotels, restaurants, cafés, cloud kitchens, or even food trucks. The entire process of ordering and delivery happens through portals or food delivery mobile apps.

Statista’s annual report projects a food-delivery market volume of nearly USD 300 billion by 2027 with the growth of a CAGR of 8.24% which is excellently impressive for farsighted businesspersons. Just in the US, the online food-delivery app market is likely to touch a whopping figure of USD 42.6 billion by 2027 expanding at the rate of CAGR of 10.5% between 2017 and 2027. So, if you are thinking about how to start an online food business, mind it that the entire Gen Z is there to support you!

The time is now. Think of on-demand app development for food delivery whether you already have your restaurant or thinking to have one. Taking your business online comes with ample benefits to your venture.

How does Online Food Delivery work?

As now you know that it is worth investing in the food delivery business, a fair idea of how this business works and how the food delivery business model benefits you becomes important to learn.

How does an Online Food Delivery Application Work

The main stakeholders in the food delivery business are users, restaurants, and delivery persons. They all play their roles on the app.

Users

They are the consumers, customers, or patrons who order food online.

  • Chooses a meal from the menus
  • Pays online
  • Rates and reviews the food and delivery men
  • Schedule food orders in advance
  • Real-Time Tracking
  • In-App Messaging
  • Other Features: Promos, Push Notifications, Offers, etc.

Restaurants

These are the food providers who receive orders and prepare them according to the instructions

  • Dashboard
  • Creates menus
  • Maintains good quality to stay in the competitive market
  • Order management
  • Tracking GPS
  • Payment
  • In-App Messaging
  • Rates and reviews delivery persons and patrons

Delivery persons

Also known as riders or food delivery boys, these are the food carriers

  • Receives order details
  • Learns locations of restaurants and consumers through GPS-based tracking features
  • In-App Messaging
  • Goes to restaurants to pick food packets
  • Delivers at consumers’ doorsteps
  • Rates and reviews

The core business model for online food delivery venture

Not just for the app owners, the food delivery business for restaurants is also lucrative. In other words, whether you are just an investor and want to venture into developing an online food delivery business app or you yourself are a restaurant owner and want to expand your business, it is all a win-win situation. Chiefly, the core business can be divided into three categories –

Online Food Delivery Business Models

Aggregator business model

The online food-delivery business model offers a powerful digital platform that serves as a bridge between consumers and restaurants. The platform allows all the restaurants in the region to register themselves, and a similar offer goes to consumers or mobile app users. Hence, both service seekers and providers are on the same platform. Generally, this model is applicable to business persons who own a mobile app for online food delivery.

Order and delivery model

In this unique food delivery business model, food business owners hire a delivery service partner for quicker and better food delivery management. The third-party food delivery service providers fix the delivery charges (after discussing with restaurateurs) before offering their services full-fledged. This model gauges success especially for small food business owners who do not want hefty investments in developing digital solutions.

Full-service business model

Suitable for larger food chain businesses, the full-service business model includes everything from cooking to food delivery through an on-demand food delivery app. For instance, McDonald’s, Pizza Hut, and Domino’s Pizza have a full-fledged mobile app for food delivery where everything from orders, delivery men, and logistics (transportation) is managed by the company.

How to Start an Online Food Delivery Business? A step-by-step guide

Step by Step Guide to Start a Food Delivery Business

True to every business startup, you need a foolproof strategy to begin a small step toward a large success. From merely a thought of building a food-delivery business to having a user engaging on-demand food-delivery app as a product requires intense homework. Here are the steps to start a food delivery service –

Research and planning of food delivery business

It all starts with food delivery market research to understand and learn the trends and consumer demands. Studying peers (similar on-demand food delivery apps) would help you construct a better product. You may also research pricing, online menu designs, and the overall presentation of food delivery software. The following factors are important to mind in this phase.

Stats and figures

You may check research firms’ data to understand the demand for food delivery businesses and apps. Such numbers will help you focus on a particular area or type of business with brighter prospects.

Set the target consumers

Based on an on-demand food delivery business needs in specific areas, you can set your target customers. For instance, food delivery service works better where societies with officegoers are found. You may also take the help of data-providing companies and focus on working men and women who are likely to order food online more frequently.

Jotting down the ideas

Once market research and peers are studied thoroughly, you may take the help of food industry experts to outline and draft business strategies. You may also need to frame the budget to start a food delivery business in 2023. In 2023 and beyond, integrating the latest technologies such as Artificial Intelligence and the Internet of Things would be mandatory to stay competitive, and that would cost you a bit more.

Assuring food delivery business resources

On-demand food delivery business requires some crucial paperwork to stay legally clear. Business license and insurance are two major steps you need for your business. Plus, you need to develop a powerful network of restaurants and delivery partners to assure that on-demand food delivery service runs smoothly.

Licenses

The prices to acquire required business licenses and insurance from local authorities would add up to some extra work for your legal teams. Several states mandate worker’s insurance, and food licenses approved by bodies such as FDA that you need to mention and present for your food-delivery app.

Network

The success of an online food ordering business depends on several factors, the major being a good number of registered users and restaurants available on the portal. You can start an online food delivery business only when you have built a powerful network where many restaurateurs have registered their eateries on your app. More options of restaurants, café, and food suppliers would attract more users to the app stores as reviews and word-of-mouth spread.

As a part of the network, you must also find and assure delivery partners of safer and quick food packet delivery to consumers’ doorsteps. The delivery partner and logistic network should have a backup in case the primary way of deliveries fails in unexpected events. Perks, wages, and special on-demand food delivery business models that benefit delivery partners may help you retain the staff (delivery persons or riders) who are the backbone of the business.

Food delivery business’ digital presence

Your online presence can increase your client base manifold, and that is the reason, most companies have their web portals and food delivery mobile applications on which they provide their services and products. You may find startup app developers to discuss your project and develop wireframes and prototypes of your food-delivery apps.

Hire developers

You may find the best mobile app development company as your tech partner and hire remote developers who shall work dedicatedly on your project. Various hiring options are available according to your budget and the complexity or type of your project. You can hire developers on a fixed cost or can build your own team to work on your project dedicatedly for a longer time to assure that you have the best product in the market.

Assure standard development and deployment

Before you hire developers to build an online food-delivery business app, it is advisable to sign legal documents with your tech partners such as NDA to play safe. You need to make sure that the online food delivery app is built using standard tools and that the deployment on predefined platforms goes smoothly. To assure that your product is up and running flawlessly, you may also need to sign a contract for maintenance that would include solving any escalations and regular updates of the food delivery apps to keep up the pace with market trends.

How online food delivery app or portal help you achieve your goal?

So now that you know the prerequisite of having a food-delivery app, it is time to sleeve up your development and marketing teams to focus on the areas that assure you of the app’s success. Here are they –

how online food delivery app or portal help

UI/UX

Millions of dollars are spent on a user interface to provide the best possible user experience because today, the digital trend is leaning toward aesthetics of mobile applications. Starting a food delivery business means offering the simplest yet most attractive designs of food dishes with clear texts about the necessary information. Intuitive UI/UX shall help you retain visitors and seek food delivery services.

Bigger user base

While brick-and-mortar restaurants depend on the footfall and visitors passing by, if you have a food delivery business app, the user base increases manifold. You can opt for digital marketing through social media and other online campaigns to reach hundreds of thousands of users beyond geographical boundaries.

GPS-based services

The success of the food-delivery mobile application lies in easy ordering, secure payment, and top of all, accurate tracking of the food parcel. Patrons are desperate to check the status of their food whether it is being prepared or on the way. GPS-based food delivery systems would help users track riders and hence would make them happy customers on your platform.

Secure payment

Security has been one of the biggest concerns for any mobile app. Similarly, for an on-demand food-delivery app, secure payment would give a sense of relief to users (patrons) as they would pay for their food orders without any hesitation. On the other hand, the delivery partners and restauranteurs are also at ease because they have received payment along with orders.

Nail your food delivery business now

It is possible to plan and succeed food delivery business in 2023. Yes, you can nail it better with a customized user-centric mobile application for the same. You can build a brand-new software solution for your food delivery service by hiring the best developers; simply outsource your project and set yourself worry-free from micromanagement.

Avantika Shergil Avantika Shergil   |  Jan 12, 2023

An enthusiastic Operations Manager at TopDevelopers.co, coordinating and managing the technical and functional areas. She is an adventure lover, passionate traveler, an admirer of nature, who believes that a cup of coffee is the prime source to feel rejuvenated. Researching and writing about technology keeps her boosted and enhances her professional journeying.

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