Your Quick Guide To Starting A Meal Prep Business
From market research to food prep and beyond, this is everything you need to know to start making, shipping, and marketing your meal-kit business.
So, you’re thinking of taking your passion for cooking and nutrition to the next level. There’s never been a better time for starting a food delivery service. The meal kit industry is only growing as people become more conscious of how they eat and how they spend their time.
This post will give you an overview of how to start a meal prep business and give you some resources for getting started. From idea generation to shipping to advertising your services, this is everything you need to know to start sharing meals and making profits.
Table of Contents
How To Start A Meal Prep Business In 10 Steps
1. Decide What Makes Your Meal Prep Business Special
There are so many well-known meal prep delivery companies out there right now, so you have to find a way to set yourself apart from your competition. To do this, you have to decide what will make your meal prep business special, or what your niche is.
Ask yourself the following:
- What kind of people do I want to offer my services to?
- Do I prefer to cook entire meals or would I prefer to share my own recipes to help people cook?
- Do I want to teach others how to prep meals?
- Are there any particular areas of cooking or nutrition that I’m really interested in sharing?
You might want to deliver affordable, ready-to-heat meals for individuals who are too busy or tired to cook for the whole family, or you might provide the ingredients and recipe cards for people who are looking to bulk up in the gym. You might specialize in international cuisine and want to share your cooking methods and secrets with your customers.
Take dietary restrictions into consideration when deciding the kind of food you’ll offer if you want to reach a wider audience. However, if adding more options doesn’t make sense for your business’s niche, don’t worry about it. For example, if your meal prep business is focused specifically on selling meat-based meals, it doesn’t make sense to create a vegan option.
No matter what kind of meal prep business you have, the kind of customers you want to serve will inform everything you do. From your price structure to your ingredient lists to your advertising efforts, every business decision you make should align with your customers’ needs and your niche area.
2. Write Out A Business Plan
A business plan serves two functions. It helps you define what your business is and how it will make money. It also shows other people, especially investors, what your business is, how much it will cost to start and manage, and how you plan to turn a profit.
Your business plan should include the following:
- Business overview
- Target market
- Financial summary
- Marketing strategy
To get a fast, simple business plan out on paper, check out our post, The ‘How-To’ For One Page Business Plans. The post also includes a free one-page business plan template you can download and complete today.
3. Obtain The Proper Permits, Insurance, & Licenses
Whether you plan to cook out of your own kitchen or rent a space, there are permits, insurances, and licenses you need to have before lighting a single stove burner. Your state and local laws may vary, so start researching exactly what you’ll need on the Small Business Administration (SBA) website.
In general, though, you will probably need to apply for a:
- Business registration
- Employer Identification Number (EIN) if you plan to hire anyone else now or in the future (here’s how to find your EIN)
- Business license
- Food-handling license
- Health department permit
- Sales tax license
- Sales privilege permit
Consider general liability insurance, errors and omissions (E&O) insurance, property insurance, and worker’s compensation insurance to cover your business in the event of a disaster. There may be additional business insurance requirements depending on your state and local laws. Talk to an insurance professional to make sure your business is covered. It’s better to have insurance and never need it than it is to need insurance and not have it.
- Related: Read our definitive guide to insurance for small businesses to learn the basics of business insurance coverage, plus extra insurance factors to consider.
4. Figure Out How To Fund Your Meal Prep Business
A fully functional meal prep business comes with a lot of startup costs: renting out space and/or equipment, purchasing supplies, finding a shipping solution that works for you, and more.
If you’re not sure how to even begin funding a new business venture, read our post, Finance Your Startup With One Of These 23 Smart Fundraising Options. You should have an idea of how much you’ll need to start out when you complete your business plan.
Note: Some loan providers will not issue loans to individuals who do not have a business plan or the proper permits, licenses, and insurances. Make sure you have all your documentation squared away before approaching anyone about borrowing money.
5. Find A Place To Prep Your Meal Kits
You can work out of your own home if it’s large enough, or rent out kitchen space to start out. There are benefits and drawbacks to both of these options.
Working from home means that you won’t have to drive to and from a rental kitchen, pay monthly rent, and you might be able to claim some of your rent/mortgage as a business-related tax deduction. However, working from home will likely mean that you’ll need to rent or buy commercial kitchen equipment.
Renting a kitchen space is nice because it’s already set up with the necessary equipment, and it keeps your work life separate from your home life. Plus, you can definitely deduct rental costs on your tax forms, while home-based kitchens may not qualify.
However, rent can get expensive. To cut down on commercial kitchen rental costs, look for shared kitchen programs in your area. After your business grows enough, and you’ve proven that your meal prep delivery business will be profitable, start looking for your own dedicated commercial kitchen.
6. Decide How To Ship Meals
The most important thing to consider when selling perishable items is shelf life: How long can your meal prep boxes stay out of the fridge or freezer before they’re considered unsafe to eat? The longer they can stay in well-insulated packaging, the slower you can ship, which translates to smaller shipping costs.
You also need to decide which shipping partner to work with. Consider working with a shipper in your region before expanding your business. It will make calculating shipping costs way easier.
Learn how to cost-effectively package and ship your meal prep boxes with this small business guide to shipping perishable foods.
Finally, consider how you want to present your shipping fees to customers. You could offer free shipping and bump up the price a little to cover shipping costs, which is a very common eCommerce sales strategy. People love free shipping, and often don’t even notice the slightly raised pricing. You could also offer flat rate shipping to make budgeting a little easier and give customers an idea of exactly how much they can expect to pay before they get to their online shopping cart.
7. Design A Menu & Order Supplies
Allocate some of your funding to the essential supplies you’ll need for cooking, packaging, and shipping. Decide on at least one month’s worth of menus and where you will source ingredients from. Make sure your supplies and suppliers align with your niche. For example, if you advertise your meals as all-organic, make sure your suppliers have their organic certifications.
Do your research to find the most cost-effective purchasing solutions for your business’s needs. Some ingredients, such as rice and quinoa, have longer shelf lives, so it might make sense for you to buy those ingredients wholesale. However, buying fresh produce in bulk might not be your best option if there’s a chance it could rot before you use it all.
Finally, consider what your customer’s home experience is like when you design meal kits. What do they already have in the kitchen and what do they want the cooking experience to be like?
For example, if your international menu requires spices that are hard to find in local grocery stores, you’ll have to modify your recipes to include everyday spices, or include those spices in meal prep kits. If your target customers are busy parents, include pre-chopped produce and design one-pot meals, so they won’t have too many dishes to wash later on.
8. Create An Online Ordering Platform
Your meal prep business is probably based on subscriptions, so you’ll need an online ordering platform for customers to subscribe to a meal plan, choose different meal options, notify you if they need to skip a week, and more.
Choose an ordering platform that lets customers do this on the user-end of the platform and allows you some extra functionalities to help your business run smoothly. Make sure your ordering platform is easy for people to use, aligns with your business’s branding, and shares exactly why your meal prep business is different from all the other options out there.
9. Market Your Meal Prep Subscriptions
Since you don’t have a physical location to draw people to, you have to go out and meet your target customers where they’re at. You can do this online and in-person.
There is a whole section of marketing tips for gaining exposure and growing your online presence later on in this post.
- Related: Read about how to create your first social media marketing campaign on major platforms such as Instagram and Pinterest, which are very popular among foodies, parents, fitness fanatics, and other people who may fit into your target demographic.
10. Learn From Your Mistakes
Not one single business gets it all right from the beginning. The best businesses are vigilant about noticing and learning from their mistakes.
Take note of any area where you’re prone to waste. Do you order too many perishables and have to throw some away every week? Are some of your dishes underperforming to the point that you should take them out of rotation? Could you get some of your supplies at a lower cost from another vendor?
Use tools such as a food cost calculator, inventory management software, and sales analytics, as well as user reviews, to find all your business’s issues. Then, work to resolve them.
Recognizing issues, and then pivoting your business plan and operations to fix them, is the number one way to stay profitable in the long run.
Best eCommerce Platform For A Meal Kit Delivery Business
You need an eCommerce platform to do a lot of things if you want to cut down on the administrative aspects of your business. With your shopping cart platform, you should be able to:
- Have subscription-based shopping cart functions
- Accept recurring payments
- Automate menu updates
- Manage inventory
- Monitor deliveries
- Allow customers to skip and reschedule deliveries
- Send email and/or text notifications about their order status
- Offer coupons, discounts, and free trials
These are some of the best eCommerce platforms to build your business’s website:
- Stripe: Build a subscription feature directly into Stripe without any extra external software. Stripe Billing, which includes recurring billing, is built on top of Stripe Payments, a well-known payment option.
- Square: Incorporate Square’s excellent in-person POS software if you plan on taking any orders in a physical location. Use Square marketing for email marketing campaigns.
- Shopify: Use Shopify‘s end-to-end shipping and fulfillment solution to spend less time focused on shipping and more time focused on creating menus and marketing your business.
- BigCommerce: BigCommerce is the most cost-effective solution if you want to quickly scale your meal-kit business.
- Shift4Shop: Shift4Shop charges one flat monthly fee for subscriptions, rather than charging a transaction fee for every subscription you get. Shift4Shop is also the most budget-friendly solution if you don’t have the funds to invest in another eCommerce platform that’s easier to use.
- Meallogix: This platform is built specifically for meal prep businesses, which is why it includes a streamlined menu creation process and automated menu updates, kitchen task management, and ready-to-print labels. It is more expensive than other eCommerce platforms, but can be worth it if you’re not great at managing the administrative aspects of your business or really don’t want to modify your website frequently.
Depending on your eCommerce platform, you may need to add a specific subscription billing software to your online store. To decide which software is right for your business, read our post, The 8 Best Options For Recurring Payment Systems & Subscription Billing Platforms.
Marketing Your Meal Prep Delivery Business
If you start out on a regional level, which we highly recommend, start by showing up at physical events and creating an online presence.
You can secure a place at local farmer’s markets or at events that your target customers would show up at, or host your own events to get people trying (and talking about) your food. Leave flyers advertising your business at relevant locations, such as gyms or schools.
Offer coupons, sales, and free trials in person and online. Make it really apparent that your customers can stop subscribing at any time, so they don’t feel like subscribing is a huge commitment. Offer loyalty programs to retain customers and referral programs to capture more customers without any marketing efforts on your part.
Most importantly, always offer great customer service. Make sure you deliver quality products on time, and if a customer has a reasonable complaint, resolve conflict as smoothly as possible. Let customers know if there will be any ordering or shipping issues. If customers have frequent or unexpected issues, they will quit your service, and you’ll lose out on long-term profits.
Make sure your eCommerce platform allows you to easily manage your inventory, modify pricing, offer sales, and send out order updates.
Online, you have a lot of marketing options. These are just a few:
- Start posting regularly on social media with appetizing food images and nutrition/cooking-related posts. Build an online following on relevant social media platforms.
- Get reputable influencers to market your meal prep delivery business online. Later on, you can create an affiliate marketing program to get more people advertising your business.
- Interview with food bloggers and bloggers who are relevant to your target market. Get them to link back to your website to increase the number of site visits and sales.
- Optimize your website for SEO and start your own blog. This will help you build authority in your field and rank higher in search engine results.
- Start email marketing. Send out special offers, updates about menus, and other relevant news.
For a more in-depth guide for leading more people to your subscription website, read our post, The 6 Best eCommerce Marketing Strategies To Increase Website Traffic.
Final Thoughts To Start Your Meal Delivery Business
If you take anything away from this post, it should be this: focus on serving your specific customer base over everything else.
Find an eCommerce solution that helps you manage the repetitive administrative aspects of the business, so you can focus more on serving food and people. Design menus specifically geared towards your target customer’s lifestyle and needs. Meet them where they are, online and at physical locations.
Lastly, in those more “boring” moments, remember why you got into the meal kit industry in the first place: to bring your special meals to dinner tables everywhere.