[Free Business Idea] How To Start A Food Delivery Business

Technology is changing the way we buy food in Nigeria. Since the introduction of eCommerce web and mobile solutions, convenience has become the order of the day. Apart from the one or two amala joint addicts we all know, the working class seems to be generally swapping  lunchtime bukas for online food orders to be munched at the desk.

If you’re a budding entrepreneur looking for what business to start, you could also consider a food delivery venture as a meal ticket. Right now, the big players in the business are JumiaFood, NaijaEats, CityChops, but who says you can’t succeed in this area?

A food delivery service basically transports food from a restaurant to a predefined consumer location for a fee. One lady around the car park of a certain large bank on the Island sells out of moi moi by 8.30am every morning. No matter how many wraps she prepares, she sells out. I’ve done the maths and pegged her capacity at 300 pcs. (I don’t think her 2011 Toyota Corolla will fit much more in). Multiply this by N200 per wrap, and we have N60,000 EVERY MORNING. How much do bankers get paid again?

I can’t help but wonder how much more easily her business would flow (and how much more profit she would make too) if she erased her individual transport cost to the car park, and just got a delivery company to deliver all orders to her customers work desks by 8.30am.

3 ways you can offer a food service

• Self catering: This involves only your restaurant and menu, i.e. lunch time deliveries, seminar and corporate parties order.
• Liaison with a restaurant: You operate your delivery services exclusively with a particular restaurant.
• Independent: You are in partnership (MOU) with different restaurants and provide food delivery services independent of their operations.

The third option is our main focus for this article, an independent food delivery business, much like a middleman, bridging the gap between the consumer and the restaurants.

The process

Your business structure involves a website, mobile application, emails or an SMS short code with in-built restaurant menus in a defined geographic location, you provide food order forms, order confirmation and acceptance sms/emails, payment gateways and delivery fulfilment.

You handle Ordering, Payment and Delivery logistics.

I could have easily said phone calls, but that just makes it so much harder, busy lines, non reachable connections, etc. the involvement of computer applications improves user interaction and makes it more interesting.

Business requirements

• Business registrations: CAC, Tax ID No, food handlers test, NAFDAC food handlers permit. This should require a total of N150,000
• Online presence: Website, mobile application, and SMS short codes. N70,000
• Payment system: This can be Pay On Delivery, Point Of Sales, and Webpay. Interswitch Webpay costs N150,000 for installation.
• Restaurant partnerships: Hold meetings with restaurant owners; create agreements and MOUs, designs plans that benefit you and the restaurants.
• Delivery transportation: These means of transportation aid in delivery, they include; bicycles, motor cycles and mini vans for long distance. N400,000 each. The smart way to do it in the testing phase is to liaise with existing Okada drivers, and save the hefty investments until you start getting sizeable returns.
• Staff: These are necessary for timely operations. Workforce includes administration, customer care, drivers/delivery men. N100,000
• Uniforms: Branded shirts, jackets, sneakers, helmets. N500 each
• Delivery materials i.e. insulated food bags, cooler boxes, etc. N15,000
• Supplies such as paper towels, spoons, etc  N10,000

Location

You should have a predefined geographical target area to offer delivery services. This is he key to your success, and  metropolitan cities such as Lagos, Abuja, Ibadan and Port Harcourt offer attractive returns. Smaller cities also do well, but these might require intense marketing and customer convincing. A good way to represent this is having a marked area on Google maps embedded on your website.

Logistics charges

Your charges should be affordable, reasonable (calculated distance from the restaurant to the consumer) and also able to keep you in business, as well as cover vehicle maintenance costs.

This charge can be fixed, or a surcharge which is a percentage from the total fee.

Delivery time

Have a reasonable delivery time and stick to it. Customers wouldn’t want to wait more than the predetermined time stated on your website to get their meals; it has to arrive hot and fresh. Also you can provide a tracking system on your website to enable them easily locate their orders. Your average delivery time should be 20-45 minutes.

Menu

All menus should be gotten from partnership restaurants, allow chefs and owners decide on what can be readily available, specials and pricing. Ensure that you include popular restaurants around your vicinity, and check their health regulations registrations too.

Pricing/Payment

Pricing shouldn’t be different from actual restaurants’ menu price list; this could affect your business in a bad way. The only extra payments should be delivery charges, VAT and maybe Tip.

Payment systems is a tough one, but have all necessary options available to the customer, this can either be Pay On Delivery, Mobile Money, Webpay and Point Of Sales. A wire transfer might not work well in this situation, but you can include that for internet bankers.

Ordering system

This should be easy and user interactive. Customers should get you on the go, hence the need for mobile friendly interfaces.

Logon > Peruse Menu > Place Orders > Pricing Cart > Payment Options > Order Tracking > Delivery

Staff

Employ hard working, efficient staff, introduce a profitable earning system and design good motivation programs. Delivery men should be familiar with the locale, smart and friendly.

Accounting

Your accounting system should be top-notch, restaurants, staff, overhead and maintenance costs should be well documented on accounting spreadsheets and software. An example is QuickBooks or the traditional Excel

Marketing

Marketing should include several different ways, be ready to get dirty, use the traditional Word-of-mouth, and never stop talking. Prints fliers, handbills, menu listings, place these in restaurants, banks, businesses that require your services. Email, texts, promotions, web banner ads and classifieds in newspapers are also necessary.

(Not this):

 

Usual problems and possible solutions

• Lengthy delivery time: Employ efficient delivery men, and get a motor cycle for densely populated traffic.
• Wrong orders: Have an accurate order taking system and double-check via confirmations for optimization before alerting restaurants.
• Cancellations: If it occurs from your end, offer an apology, full refund and possible discount on the next order.

For efficient management try this