grocery delivery business plan

How To Start A Grocery Delivery Business (With FREE Business Plan Template)

• Market potential : Rapid growth is expected in online grocery delivery, with ample opportunities for small businesses.
• Business models : Options range from gig services and partnering with local stores or wholesalers, to connecting with farmers and offering personal shopper services.
• Key strategies : Success hinges on product quality, superior customer service, efficient delivery, and strategic marketing.
• Foundation steps : Write a detailed business plan, set up your administrative and legal framework, and invest in essential equipment and technology.
• Growth : Use a mix of traditional and digital marketing to attract customers, and focus on operational efficiency and customer satisfaction to expand.

Demand for online grocery shopping is growing steadily, with no signs of slowing down. Statista estimates that the number of people using online grocery delivery services will pass 2 billion by 2028 — and global revenue will surpass a trillion dollars by 2026 . That’s a lot of revenue to go around! 

Even though large retailers like Walmart and on-demand apps like Instacart dominate the market, there is plenty of room for smaller companies who can find the right niche and serve it well.  

In this article we’ll discuss the different types of grocery delivery business and how to get started. We’ll also look at startup costs, profitability and the pros and cons of starting a small business focussed on grocery delivery. 

💡If you’re already done your homework and just want to start planning, go ahead and use our free grocery delivery business plan template .

Choose your type of grocery delivery business

There’s a variety of ways to offer grocery delivery services, each with a different delivery model and different up-front investment needs. So the first step is to decide what niche you’d like to fill, and how much time and money you’re able to commit.

Online grocery delivery businesses tend to get all the attention, but this is one kind of business where you can do a lot offline. Here are five business ideas to start with:

1. Join a gig service

The simplest option is to sign up with a grocery delivery app like Instacart, DoorDash, GrubHub, Uber Eats,  or whatever the local equivalent is in your country. 

This has the advantage of being quick and easy to do if you don’t have startup funds. All you need is a mobile app and some kind of vehicle. But earnings can be limited, especially if you’re dependent on tips — and most of the upside goes to the app. It could be a good way to get an on-the-ground sense of the target market, though.

2. Partner with a local grocery store

Partnering with a local grocery store has the potential to create a rewarding symbiotic relationship. The store has the supplier connections, the inventory, and the knowledge of what works in the local market. You could provide a delivery service that brings in new customers and increases their turnover, while building a good small business for yourself. You could kick-start this partnership with some simple marketing tools like in-store fliers and posters.

Think carefully about how order management would work. This is a business that doesn’t necessarily need to be online, which could save a fortune in app development and fees to faraway third parties. The demographics of your target market are important here. For example, many older customers don’t want, or can’t afford, the latest phones with fancy apps. Providing a simple phone-based ordering system could fill a real gap in the market, while providing a customer experience with the personal, human touch that many people crave.

Delivery scheduling will be important to making this business profitable. Delivering one order at a time will probably be too expensive – working a day or two ahead to schedule multiple deliveries in a single round will make the difference. 

You’ll also need to work out how much to charge in delivery fees and how to share the revenue. An arrangement that works for everyone could be the basis of a sustainable business. 

3. Deal directly with a wholesaler or fresh produce market

Working with a wholesaler or market is another good option that can give you access to a huge range of products at competitive prices. This could mean you’re able to offer your customers better deals, fresher produce, and a more diverse range of items than they might find in a regular store.

Start by pinpointing which wholesalers or markets align with your business values and customer needs. Are you aiming to deliver organic produce? Bulk pantry items? Ethnic foods that are hard to come by? Once you've nailed down your niche, approach wholesalers with a clear proposal. Show them how your delivery service can bridge the gap between their bulk offerings and customers craving convenience.

Ordering from wholesalers typically means buying in larger quantities, so you'll need a plan for storage and inventory management. This might require renting space or managing a rotating stock to keep everything fresh.

The financial side will be crucial here, too. Since you're buying in bulk and likely at lower prices, you'll need to work out pricing that covers your costs, remains attractive to customers, and still turns a profit. It's a balancing act, but get it right, and you're on your way to a thriving delivery service that stands out with quality and value.

Case Study: Marché Second Life

You could get really creative with this model. For example, Routific customer Marché Second Life rescues “ugly” foods, shipping excess and odd-looking produce as well as specialty items like sausages, cheese, and coffee directly to consumer doorsteps across Montreal. They’re reducing food waste, saving money for consumers and building a great business all at the same time!

4. Connect to farmers

Hooking up with local farmers can plant the seeds for a flourishing grocery delivery business that’s all about fresh, local, and sustainable. Imagine delivering the kind of produce that hasn’t spent days in transit, still has the morning dew on it — AND supports the local economy. This kind of partnership could give your business a green edge that's both eco-friendly and customer-pleasing.

Get to know the farmers in your area and find out who’s open to partnering for a delivery service. They might be selling the freshest fruits and veggies, dairy, eggs, and even meats, but not getting the reach they want. Your delivery service can be the link that gets their farm-fresh goods into the kitchens of more locals.

When you pitch your idea to farmers, emphasize the mutual perks. You’ll be getting the good stuff straight from the source, and they'll get their products to a wider audience without having to manage deliveries themselves. Plus, your customers will love knowing that their groceries are coming from just down the road — it's a wholesome story that sells itself.

Case Study: Walden Local

Walden Local is a great example of a fruitful partnership with local farmers. Their direct-to-consumer farm share program enables customers to sign up for monthly or bi-monthly deliveries of 100% grass-fed beef, pasture-raised pork, lamb, chicken, and wild-caught fish — all raised locally in New England and New York.

5. Work directly with customers

For a personal touch, consider offering services as a personal grocery shopper or concierge. This model is about more than just delivering groceries; it's about curating shopping experiences tailored to each customer. Whether it’s tracking down specialty items, ensuring that the avocados are perfectly ripe, or even coordinating with other local services for a one-stop delivery, your attention to detail could set you apart.

This hands-on approach may appeal to customers who are looking for something a bit more bespoke than the standard grocery delivery — think busy professionals, individuals with specific dietary needs, or folks who simply value their time too much to spend it wandering up and down store aisles with a shopping list.

To make this work, you’ll have to be willing to adjust your schedule at short notice and be on the ball with your communication skills, maybe getting texts or calls about last-minute dinner party needs or particular preferences. You’ll become a trusted part of your customers' routines, the go-to person when they need to make sure everything is just right.

Your pricing strategy here needs to reflect the premium service you’re offering. While you won't need a massive marketing budget (word-of-mouth will likely be your best friend), you will need to ensure your time and efforts are well-compensated. Building solid relationships with customers and consistently exceeding their expectations is key to making this personal approach profitable.

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As you can see, there’s no shortage of ideas. To choose the model that’s best for you, consider:

• Your existing knowledge, skills, and preferences
• How much you have available to invest 
• Whether you want to employ other people
• The demographics and culture of your town, city, neighborhood or other local area.

Make your grocery delivery business stand out

You want to be remembered for all the right reasons — that batch of strawberries that tasted like sunshine, or the way you replaced a bruised apple without being asked. 

Here are some ways to ensure your business not only stands out, but also becomes the go-to choice for your customers:

Product quality

This is one of the most challenging things about operating a grocery delivery business: you’re dealing with perishable products most of the time, and quality is the cornerstone of your business. Whether it's the crunch of a carrot or the scent of freshly baked bread, what you deliver has to inspire delight every single time. To ensure consistent high quality you can:

• Build relationships with great suppliers who understand that you won't accept anything less than the best. If you're sourcing from farmers or wholesalers, make regular visits to check on quality and freshness. Your customers trust you to bring the market's best to their doorsteps, so make sure you're doing just that. And if your suppliers also feel they’re benefitting from doing business with you, they’re more likely to alert you when there’s something special on offer. 
• Treat your produce tenderly . Cooler boxes, padding, dollies – invest in whatever it takes to handle your products with the greatest possible care. You’ll be the last person to handle them before they reach the customer's doorstep, so the quality is on you. 

Customer service

Your customer service can make or break your business. Be there for your customers, always ready to listen and respond. Whether it's through a friendly chat on the phone or a quick resolution of an issue, show them that you value their business. 

If you make a mistake — and let's face it, everyone does — own up to it and make it right. Sometimes, how you handle a slip-up can leave a more lasting impression than the slip-up itself.

As you grow, keep talking to your customers and listening to what they say. They’re the best source of info on how your business is doing and what you could do better. Maybe they’d appreciate a wider range of delivery times or they’re looking for new grocery items. These insights can guide your growth and help you and your partners adapt to changing needs

Personalized experience

Get to know your customers. Not their whole life story (unless they want to share and you really want to know), but what they like and what they need. Use this knowledge to tailor their shopping experience. Suggest new products they might like or remind them when it’s time to restock on their regular items. A little personalization goes a long way and shows your customers that they’re not just another order number to you.

Efficient delivery

In the delivery business, timing is everything. Find the sweet spot between being as quick as possible and still maintaining quality. And invest in a route optimization app! It will help you plan much shorter, more efficient routes – which means more deliveries per route, less time on the road and lower costs. 

💡 Routific is made for local delivery businesses – and it’s free to try for 7 days. Get your free trial now .  

And of course, let's not forget marketing. Use social media, local advertising, and word-of-mouth to tell your story. Share customer testimonials, behind-the-scenes glimpses of your operations, and highlight special products. Build a brand that feels like a neighbor, not just a delivery service.

Write your business plan

Any successful business starts with a great business plan. There are plenty of online and offline resources to help you with this. In the U.S., the Small Business Administration has a great website at sba.gov . Your local library or chamber of commerce are also both great places to find detailed, relevant local advice. 

Very broadly, though, you’ll want to choose a business name, conduct a market analysis of your target audience, and figure out how much you’ll need to spend on startup costs to make your business a reality. Additionally, you’ll want to include a timeline for when you plan to launch, and a marketing plan.

Having a well-thought-out business plan will help you stay organized and focused on the tasks that need to be completed before opening day. If you're not sure what that looks like, you can always search for templates of business plans online or hire a professional to help you create one.

If drafting from scratch feels daunting, online templates or professional services can offer a structured starting point. Or you can use our free template! (We have a detailed step-by-step guide on how to fill it out too.)

Research your market

Know your customers, and know your competition. Who are you serving, and who are you up against? Doing some solid market research to understand these will guide your service's unique angle.

Choose your financial model

Bearing in mind the type of grocery delivery service you want to start, consider how you’ll make money:

• Subscription models promise steady income, while on-demand services offer flexibility.
• What markups will you add?
• Will you charge a delivery fee? How much?

How much does it cost to start a delivery business?

The cost of starting a delivery business depends on several factors, such as the size and scope of your services, the type of equipment you plan to use, and any fees associated with obtaining the necessary permits or licenses. In general, getting started costs anywhere from $100-$20,000 .

Get your admin set up

There’s a lot of groundwork to lay. The good news is that if you invest the time to create a solid administrative base, you probably won’t have to think about it again:

1. Business structure

Depending on your liability preferences and the tax implications where you live, you can choose between a few different ways to structure your business:

• Sole proprietorship
• Partnership
• Limited liability company (LLC)
• Corporation. 

Each model has its pros and cons, affecting everything from paperwork to how much of your assets are on the line. This is one area where it’s well worth seeking professional advice. Look for a local accountant who specializes in entrepreneurs, or find a local bank or agency that supports small business development — most cities will have one.

2. Legal and financial must-haves

• Tax registration : You never want to get on the wrong side of the tax authorities! Secure your Employer Identification Number (EIN) via the IRS for tax purposes (or whatever the equivalent is in your country).
• Business bank account : Keep your finances tidy with a separate account for your business. Shop around different banks to find one with favorable terms and necessary features, like an easy way to take credit card payments. And talk to friends and trusted advisers about their experiences.
• Insurance : Protect your business with the right mix of general liability, commercial auto, cargo, and workers' compensation insurance, depending on your operation's specifics.
• Licenses and permits : Ensure compliance with local regulations by obtaining the necessary paperwork to legally operate.

Equipment and systems

Start lean with just the essentials — a dependable delivery vehicle, basic moving equipment, and technology like a smartphone and a delivery management system. 

A simple online presence with a domain name and website is enough to get started. You’ll also need an order management system. An online shopping platform like Shopify or Wix is a good place to start — they offer most of the functionalities a new business will need.  Check out our article on the best e-commerce platforms for small business to learn more. 

Finally, don't forget practical items like coolers for fresh deliveries!

Delivery scheduling and delivery management 

Smart delivery scheduling and delivery management could make or break the profitability of your business. Last mile delivery is notoriously difficult and expensive so this can get really complicated, really fast. You need to balance things like driver availability, customer delivery window preferences, traffic, weather, and route density. Pen-and-paper planning works for a lot of things, but not for route planning. 

A good delivery management system should enable you to:

• Offer custom delivery time windows
• Automatically create optimized delivery routes with accurate ETAs
• Send routes directly to driver’s mobile phones
• Track the day’s delivery progress in real time
• Support photo and signature proof of delivery
• Automate sending notifications to your customers, so they know when to expect their deliveries

Check out Routific’s free trial to see how easy it can be with the right tools.

Marketing and client acquisition

• Get visible: Use social media and a straightforward website to connect with your potential customers, and do some basic research on local SEO to boost your online presence. And depending on your target market, don’t underestimate the power of good old-fashioned posters and flyers.
• Referral programs: Word-of-mouth is powerful. Encourage happy customers to spread the word with incentives like discounts, free extras or even exposure for their own businesses. This can help to deepen your community roots.
• Local partnerships: Even if you’re not working directly with a local grocery store, wholesaler, or farmer, think about what other mutually beneficial collaborations you could offer to other local business owners. For example: If you have a focus on fresh, healthy produce, maybe local gyms, trainers, or health practitioners would be interested. If you’re serving seniors, check out community centers and doctor’s offices. Offering low-hassle snacks and lunches? Busy parents would probably love to know. Be as creative as possible in broadening your customer base.

Build your team

Who’s going to be on your team? Even if you’re the only employee to start with, you’ll need an accountant, an internet service provider, a designer, a packaging supplier, produce suppliers, etc. 

As you grow, you’re likely to need contract and then full-time drivers, and possibly a planner/dispatcher. Recruit and train a dedicated team, setting clear expectations and fostering a positive work culture. 

Launch and grow your food delivery business

With everything in place, you're ready to roll out your delivery service. Focus on delivering exceptional experiences, adapting to feedback, and gradually expanding your reach.

Good luck on your journey to creating a standout grocery delivery business. With careful planning, a customer-focused approach, and a commitment to quality and service, you're well on your way to success.

Pros and cons of starting a grocery delivery service 

1. low cost of entry.

Because there is not much that you have to purchase to operate a grocery delivery business it is easy to get started without putting a lot on the line. This allows you to enter or exit the business at your discretion without a lot of upfront concern or investment.

2. High market demand

In the modern world, especially after the pandemic, the need for on-demand delivery services has spiked in both cities and suburbs alike. This gives small businesses a chance to heavily capitalize on the opportunity and quickly gain a large consumer base without a lot of effort.

3. Straightforward business model 

Unlike other businesses, there are not a lot of complexities attached to delivering groceries to households. It is as simple as it gets which means that there is relatively less to learn to get a boatload of loyal customers under your belt within a short period of time. 

Disadvantages

1. high competition .

Given the low cost of entry, there is a great chance of encountering a high number of competitors looking to have a piece of the pie. In such a fiercely competitive atmosphere many business owners get discouraged and bail on the industry altogether.

2. Thin profit margins

Unless you get the products that you deliver from a grocery wholesaler, the profit margins are very thin given the simple nature of the industry. These thin margins really push the patience of most business owners and make the business option unviable for many that enter it. 

3. Heavy workload

To fulfill customer orders you not only need to be very punctual and responsible in your dealing but also have to take care of any aspects that may cause customer dissatisfaction. The job is also physically demanding and requires you to be on top of your physical health to be efficient.

Frequently Asked Questions

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Food Delivery Business Plan Template

Written by Dave Lavinsky

Food Delivery Business Plan

You’ve come to the right place to create your Food Delivery business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Food Delivery companies.

Below is a template to help you create each section of your Food Delivery business plan.

Executive Summary

Business overview.

Dig In is a newly established food delivery business located in San Diego, California. The company will have an online platform that will also be able to be downloaded to users’ phones as an app. Users will be able to create a login profile and have instant access to all the local restaurants, bakeries, grocery stores, and fast food establishments.

The company will outsource its delivery to local drivers that will be employed as Independent Contractors so they will be able to set their own schedule and hours. The drivers will receive orders through their app, select which user they want to deliver to, pick up the food order from the chosen establishment, and deliver to the user in a timely manner.

Dig In will reward users that frequently use their app. Users will be able to earn rewards and discounts for every order they place through the website or app. This will enable users to keep ordering their food delivery through Dig In.

Dig In will be owned and operated by John Hutchinson, a local entrepreneur who has been in the tech industry for over 15 years. He has developed other apps and platforms for tech companies and has started mapping out this business’ platform for over two years. At this point, he has perfected the technology and is ready to reveal the new local food delivery service in San Diego, California.

Product Offering

Dig In will provide food delivery services for the residents of San Diego. Residents who want the convenience of food delivered to their doorstep can download our app, find the establishment of their choice, and order whatever they’re craving for. Most of our sales will come from orders to local restaurants but we will also offer delivery from grocery stores and drug stores. Customers will be charged a small delivery fee or have the option to join our membership for reduced fees and special deals.

Customer Focus

Dig In will target all residents living in and around San Diego. It will appeal to students, families, retirees, white collar, blue collar, and government employees. Because our fees are moderately priced compared to other delivery apps, all income levels will be able to enjoy our delivery services.

Management Team

With his entrepreneurial and tech knowledge, John will be able to quickly fix any issues with the platform. He has also formed relationships with the most sought after restaurants, bakeries, grocery stores in the area to sign them up to be part of the food delivery platform. He has also hired a team of independent food delivery drivers to earn extra money by completing the food delivery orders.

Success Factors

The following success factors will set Dig In apart from the competition:

• Comprehensive List of Restaurants and Food Stores: Dig In will include a more comprehensive list of restaurants, grocery stores, and drug stores for customers to choose from.
• Membership Rewards: Dig In will allow users who create a profile to earn rewards for every order they place through its online platform. The rewards can be redeemed for delivery fee and order discounts.
• Faster Delivery Times: Dig In promises to have faster delivery times than its competitors.
• Pricing: Dig In’s price point for delivery fees is on par with its customers, if not cheaper.

Financial Highlights

Dig In is seeking a total funding of $500,000 of debt capital to launch. The funding will be dedicated for the design and development of the app, marketing expenses, working capital, and three months worth of payroll expenses. The breakout of the funding is below:

• Platform Development: $150,000
• Marketing and Brand Development: $100,000
• Three Months of Overhead Expenses (Payroll, Rent, Utilities): $150,000
• Working Capital: $100,000

The following graph outlines the pro forma financial projections for Dig In:

Company Overview

Who is dig in.

  The company will outsource its delivery to local drivers that will be employed as Independent Contractors so they will be able to set their own schedule and hours. The drivers will receive orders through their app, select which user they want to deliver to, pick up the food order from the chosen establishment, and deliver to the user in a timely manner.

Dig In’s History

John Hutchinson has spent the last 2.5 years creating the food delivery online platform. As a tech entrepreneur, he knows how to map, develop, and implement an online platform. He has been instrumental in creating other apps and platforms for ecommerce companies and has created attractive and efficient apps for numerous Fortune 500 companies.

During the COVID-19 pandemic, John was on lockdown and working from his home. He used other food delivery services, but they were all slow, got his order wrong, or didn’t have a good selection of restaurants and establishments. It was then that he started developing his food delivery business and would implement and perfect all of the things that the competition suffered at.

Since incorporation, the company has achieved the following milestones:

• Mapped out the online platform for the food delivery business
• Developed the company’s name, logo, and website
• Approached multiple local restaurants, grocery stores, and bakeries to be a part of Dig In’s platform
• Determined necessary insurance and legal requirements
• Began recruiting key employees
• Written and developed the Delivery Driver processes and procedures.

Dig In’s Services

Industry analysis.

The Food Delivery industry has grown substantially in the past five years. The convenience of ordering food from home has appealed to large demographics and now nearly everyone orders through a food delivery app at some point. Food delivery apps became a necessity during the COVID pandemic and now they are a mainstay in modern society.

According to Grand View Research, the Food Delivery industry is set to grow at a CAGR of 18.7% from now until 2030. What helps this growth is the increasing popularity of smartphones and the expansion of these services overseas. Food delivery apps are becoming an essential tool in modern society, which makes this a great time to create a new food delivery service.

Customer Analysis

Demographic profile of target market.

Dig In will target millennials, young professionals, and college age students as this demographic is more comfortable with online delivery services and regularly use other similar apps such as Uber and Tasty.

However, we expect Dig In will appeal to other demographics as well as it will be a convenient and moderately priced option to get food delivered quickly. For example, we expect working parents will enjoy our app as well as elderly residents who have trouble leaving their home to go grocery shopping or go to a restaurant.

The precise demographics of the San Diego area are as follows:

Customer Segmentation

Dig In will primarily target the following customer profiles:

• Young professionals
• College students
• Working parents

Competitive Analysis

Direct and indirect competitors.

Dig In will be competing with other popular food delivery apps. A profile of each competitor is below.

Food at Your Door

Food at Your Door is an online and mobile platform for restaurant pick-up and delivery orders. The company is known for connecting over 30 million customers and processes on average about 500,000 daily orders in most cities around the United States. Customers are able to search for restaurants, order directly through the website or app, and then await their delivery from independent contractor drivers.

The company generates revenue from delivery fees paid by consumers as well as commissions paid by participating restaurants. Food at Your Door’s other offerings include a program for corporate food ordering, website design and hosting for participating restaurants, and point-of-sale integration services. The company is continuously updating its platform with innovative technological advancements to stay on top of the competition.

Fast Foodie

Fast Foodie is a technology company that connects people with the most popular food establishments in their neighborhoods. They enable local businesses to meet consumers’ needs of ease and convenience while enabling their independent contractors to generate an additional source of income. The company is passionate about transforming local businesses and dedicated to enabling new ways of working, earning, and living. They empower their local economies by ensuring that people have equal access to opportunities to reach their full potential.

Fast Foodie has expanded their database to include not only restaurants, but convenience stores, pet stores, grocery stores, and drug stores.

Ding Dong is an operator of an on-demand goods delivery platform that is intended to facilitate smooth delivery of essential goods. The company’s platform offers full-service and in-store shopper services through a network of independent shoppers with same-day delivery and pickup service of fresh groceries and everyday essentials. This enables users to select items from their favorite grocery stores and get them delivered almost instantly.

Ding Dong was the first online platform to expand their services and products by including anything that can be purchased at a local grocery store, convenience store, or drug store. The drivers/shoppers are required to ensure delivery during the selected timeframe that the user selects.

Competitive Advantage

Dig In offers several advantages over its competition. Those advantages are:

Marketing Plan

Brand & value proposition.

Dig In will offer the unique value proposition to its clientele:

• Comprehensive list of restaurants and grocery stores
• Membership rewards and specials
• Faster delivery times
• Moderately priced fee structure

Promotions Strategy

The promotions strategy for Dig In are as follows:

Social Media

Dig In will utilize the most popular social media platforms for ads since the majority of the clientele will be active on social media. The company will also have business accounts on each major platform to post regularly of food options that are available for delivery.

Collateral Material

Dig In will develop numerous collateral materials to have on hand to give out to potential customers at the local farmers markets, events, or restaurant or store events.

Website/SEO

Dig In will invest heavily in developing a professional website and app that displays all of the restaurant and store options the company will be able to deliver for. The company will also invest heavily in SEO so that the brand’s website will appear at the top of search engine results.

Billboards/Signage

Dig In will invest in attractive signage and billboards to increase the brand awareness of the local food delivery business.

Dig In’s fee structure will be moderate so clients feel they receive great value when placing their food delivery orders.

Operations Plan

Operation Functions: The following will be the operations plan for Dig In.

• John Hutchinson will operate as the CEO of Dig In. In addition to running the general operations, he will oversee the app development and provide app support.
• John will hire 2-3 additional web engineers to run the website and app.
• John will hire 20-30 delivery drivers to work on an independent contractor basis.
• John will also hire an administrative team for accounting/bookkeeping, sales and marketing, and customer service support.

Milestones:

Dig In will have the following milestones complete in the next six months.

• 8/202X – Finalize app development
• 9/202X – Hire and train initial staff
• 10/202X – Kickoff of promotional campaign
• 11/202X – Launch Dig In
• 12/202X – Reach break-even

Financial Plan

Key revenue & costs.

Dig In’s revenues will come primarily from the fees it receives from the food delivery orders.

The delivery driver commissions, website platform fees, supplies, marketing, and labor expenses will be the key cost drivers of Dig In.

Funding Requirements and Use of Funds

Key assumptions.

The following table outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the business loan.

• Initial Number of Orders Per Day: 100
• Average Order per Customer: $25.00

Financial Projections

Income statement, balance sheet, cash flow statement, food delivery business plan faqs, what is a food delivery business plan.

A food delivery business plan is a plan to start and/or grow your food delivery business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Food Delivery business plan using our Food Delivery Business Plan Template here .

What are the Main Types of Food Delivery Businesses?

There are a number of different kinds of food delivery businesses , some examples include: Restaurant Delivery, Meal Kit Delivery, Grocery Delivery, and Veggie Box Delivery.

How Do You Get Funding for Your Food Delivery Business Plan?

Food Delivery businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Food Delivery Business?

Starting a food delivery business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Food Delivery Business Plan - The first step in starting a business is to create a detailed food delivery business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your food delivery business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your food delivery business is in compliance with local laws.

3. Register Your Food Delivery Business - Once you have chosen a legal structure, the next step is to register your food delivery business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your food delivery business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Food Delivery Equipment & Supplies - In order to start your food delivery business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your food delivery business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful food delivery business:

• How to Start a Food Delivery Business

How To Write a Business Plan for Grocery Delivery Services in 9 Steps: Checklist

By henry sheykin, resources on grocery delivery services.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Grocery delivery services have become increasingly popular in the US, with more and more people opting for the convenience of having their groceries delivered to their doorstep. According to recent statistics, the online grocery delivery market is expected to reach $29.7 billion by 2023 , indicating significant growth and ample opportunities for entrepreneurs in this industry.

If you're considering starting a grocery delivery service, it's crucial to have a well-thought-out business plan in place. This will not only help you define your target market and competition but also outline your unique selling proposition and establish partnerships with local supermarkets. In this checklist, we'll break down the 9 essential steps you need to take to create a successful business plan for your grocery delivery service.

First and foremost, it's important to identify your target market and understand their needs and preferences. Conducting thorough market research will give you valuable insights into the demand for grocery delivery services in your area, allowing you to tailor your offerings to meet customers' expectations.

Next, it's crucial to analyze the current competition in the market and identify their strengths and weaknesses. This will help you determine your unique selling proposition and formulate a strategy to differentiate yourself from competitors. Additionally, establishing partnerships with various grocery stores will be key in ensuring a wide variety of products and a seamless customer experience.

The pricing strategy is another crucial aspect to consider. Determining your pricing model and creating a financial plan will help you forecast your revenue and expenses, ensuring a profitable operation. Developing a comprehensive marketing plan will further assist in attracting customers and building brand awareness.

Logistics play a significant role in the success of a grocery delivery service. Outline the operational logistics , including sourcing vehicles and hiring drivers, to ensure timely and efficient deliveries. Additionally, it's essential to secure any necessary permits, licenses, and insurance required to operate a grocery delivery service and ensure compliance with local regulations.

By following these 9 steps and investing time and effort into developing a comprehensive business plan, you'll be well-prepared to launch and grow your grocery delivery service successfully. Stay tuned for our detailed guide on each step of the process and valuable tips to make your venture thrive in the competitive market.

• Market Research Future

Define Your Target Market And Identify Their Needs And Preferences

Before starting your grocery delivery service, it's crucial to define your target market and understand their specific needs and preferences. This step is essential for creating a successful business plan that caters to your customers effectively. Here are some key considerations:

• Demographics: Start by identifying the demographics of your target market, including age, gender, income level, and location. This information will help you tailor your services to meet their specific requirements.
• Convenience and Time-Saving: Determine the extent to which your target market values convenience and time-saving. Grocery delivery services are typically sought after by busy individuals, working professionals, parents, and elderly people who may have limited mobility.
• Technology Adoption: Assess the tech-savviness of your target market. Determine whether they are comfortable using apps or websites for ordering groceries, as this will shape the design and functionality of your platform.

Tips for Identifying Customer Needs and Preferences:

• Conduct surveys or interviews with potential customers to gather insights.
• Monitor social media platforms and online forums to understand common pain points and preferences related to grocery shopping.
• Stay open to feedback and actively listen to your customers to fine-tune your services as you grow.

By identifying and understanding the needs and preferences of your target market, you can tailor your grocery delivery services to effectively meet their demands. This knowledge will guide your decision-making process throughout your business plan.

Conduct Market Research To Understand The Demand For Grocery Delivery Services In Your Area.

Market research is a crucial step in the process of starting a grocery delivery service. By conducting thorough market research, you can gain valuable insights into the demand for such services in your area and make informed decisions about your business strategy. Here are some key steps to follow when conducting market research for your grocery delivery service:

• Analyze population density and demographics: Start by examining the population density and demographics of your target area. Look at factors such as the number of households, average income levels, and age groups to determine if there is a sufficient customer base for a grocery delivery service.
• Assess competitors: Research existing grocery delivery services in your area and analyze their offerings, pricing, and customer reviews. This will help you understand the competition you will face and identify gaps in the market that you can exploit.
• Conduct surveys and interviews: Reach out to potential customers and ask them about their grocery shopping habits and preferences. Understand their pain points and challenges when it comes to grocery shopping, and determine if there is a demand for a convenient delivery service.
• Explore online search trends: Utilize online tools and platforms to analyze search trends related to grocery delivery services in your area. This will provide you with insights into the level of interest and demand for such services.
• Consider offering a survey or questionnaire through your website or social media channels to gather more specific data from potential customers.
• Connect with local community groups, businesses, and organizations to understand their needs and potential partnership opportunities.
• Stay updated on industry news and trends to ensure you are aware of any changes in consumer preferences or emerging competition.

Analyze The Current Competition And Identify Their Strengths And Weaknesses

When starting a grocery delivery service, it is crucial to analyze the current competition in your area to gain insights into their strengths and weaknesses. This analysis will help you identify opportunities for differentiation and develop strategies to outperform your competitors.

Start by researching existing grocery delivery services in your target market. Look at their websites, apps, and social media presence to understand how they position themselves and communicate with customers. Pay attention to their delivery process, pricing structure, and any unique features they offer.

• Identify the key strengths of your competitors. This could include factors such as a strong brand presence in the market, a user-friendly app or website, a wide range of partner supermarkets, or exceptional customer service.
• Take note of any specific features or services that seem to attract and retain customers. This could include benefits such as same-day delivery, personalized shopping assistance, or the ability to order from multiple stores in one transaction.

Weaknesses:

• Identify the weaknesses or pain points of your competitors that you can capitalize on. This could include slow delivery times, limited product selection, lack of customer support, or difficulty in navigating their platforms.
• Consider any negative customer feedback or reviews that indicate areas where competitors are falling short. Understanding these weaknesses will help you shape your own offering to address these concerns and provide a superior customer experience.

By thoroughly analyzing the current competition and understanding their strengths and weaknesses, you can develop a clear strategy for differentiation. This will enable you to offer a superior grocery delivery service that meets the needs and preferences of your target market, ultimately driving customer loyalty and business success.

Determine Your Unique Selling Proposition And How You Will Differentiate Yourself From Competitors.

When starting a grocery delivery service, it is essential to determine your unique selling proposition (USP) and how you will differentiate yourself from competitors. This will help you attract customers and stand out in a crowded market.

To determine your USP, consider the following:

• Quality and Selection: Focus on offering a wide variety of high-quality products from reputable local supermarkets. Emphasize the freshness, organic options, and speciality items that customers may not find readily available elsewhere.
• Convenience and Speed: Provide a user-friendly app or website that allows customers to easily browse and order groceries. Guarantee fast and reliable delivery, allowing customers to receive their items promptly without any hassle.
• Personalized Service: Offer features such as personal shopping assistance or the ability to make special requests. Provide a customer-centric approach by ensuring accurate order fulfillment and addressing any issues promptly and satisfactorily.
• Reliability and Trust: Build trust with your customers by consistently delivering on your promises. Ensure that you have a reliable communication system for updates and notifications. Consider implementing a rating system to showcase positive customer experiences.
• Price Competitiveness: Prioritize competitive pricing to attract cost-conscious consumers. Offer promotions, discounts, and loyalty programs to encourage customer loyalty.
• Conduct market research to understand what aspects of grocery delivery services are lacking or can be improved upon in your area.
• Stay updated with industry trends and identify emerging needs or preferences among your target market. Tailor your USP to address these evolving demands.
• Regularly analyze your competitors' offerings and identify areas where you can excel or provide a better experience.
• Consider conducting surveys or focus groups to directly gather feedback from potential customers. Use their insights to refine your USP and differentiate yourself effectively.
• Take advantage of technology advancements such as predictive algorithms or personalized recommendations to enhance the customer experience and set yourself apart from competitors.

Determining your unique selling proposition is crucial for capturing the attention and loyalty of customers in the competitive grocery delivery services market. By clearly differentiating yourself from competitors and highlighting what sets your service apart, you can successfully attract and retain customers in the long term.

Identify Potential Suppliers And Establish Partnerships With Various Grocery Stores

Identifying potential suppliers and establishing partnerships with various grocery stores is a crucial step in setting up a successful grocery delivery service. Here are some important considerations to keep in mind:

• Research local grocery stores: Start by researching the local grocery stores in your area to find out which ones are open to partnering with a delivery service. Look for stores that align with your target market and offer a wide variety of products.
• Reach out to store owners or managers: Once you have identified potential grocery stores, reach out to their owners or managers to discuss your business concept and explore potential partnership opportunities. Showcase the benefits of partnering with your delivery service, such as increased sales, exposure to new customers, and the convenience of offering delivery.
• Negotiate partnership agreements: When establishing partnerships, it is essential to negotiate mutually beneficial agreements with the grocery stores. Discuss commission rates, delivery terms, and any other important details that will impact the partnership. Make sure both parties are clear on expectations, responsibilities, and timelines.
• Build strong relationships: As you work with grocery stores, focus on building strong relationships based on trust and open communication. Regularly check-in with store owners or managers to address any concerns, discuss feedback, and explore opportunities for growth and improvement.

Tips for identifying potential suppliers and establishing partnerships:

• Research the reputation and customer satisfaction of potential grocery stores to ensure they meet the quality standards expected by your target market.
• Consider partnering with a mix of large chain supermarkets and local specialty stores to offer a diverse range of products to your customers.
• Clearly highlight the benefits of partnering with your delivery service, such as increased reach to tech-savvy customers or the opportunity to offer unique promotions and discounts.
• Explore opportunities for exclusivity or preferred partnerships with selected grocery stores to gain a competitive advantage in the market.

Determine Your Pricing Strategy And Create A Financial Plan Including Projected Revenue And Expenses

One of the most crucial aspects of starting a successful grocery delivery service is determining an effective pricing strategy that allows you to generate revenue while remaining competitive in the market. To achieve this, it is essential to create a comprehensive financial plan that includes projected revenue and expenses. Here are some important considerations:

• Research the market and analyze the pricing strategies of your competitors. This will help you understand the price points and delivery fees that customers are willing to pay. It is important to strike a balance between profitability and affordability to attract and retain customers.
• Consider the costs involved in operating your grocery delivery service. These can include expenses such as vehicle maintenance, fuel, driver wages, technology infrastructure, marketing costs, and administrative expenses. Factor in any additional costs specific to your business model, such as personal shopping assistance or recurring delivery features.
• Calculate your projected revenue based on the number of customers you anticipate acquiring and their average order value. Consider offering tiered pricing options based on delivery speed or order size to cater to different customer segments.
• Include a financial forecast that outlines your projected revenue and expenses over a specific period, such as the next 1-3 years. This will help you assess the sustainability and profitability of your grocery delivery service. Regularly revisit and update this forecast as your business grows and market conditions change.
• Set goals for your profit margins and monitor your financial performance regularly. Compare your actual revenue and expenses with your projected figures to identify any discrepancies and make necessary adjustments to your pricing strategy.
• Consider offering subscription plans: Subscription plans can provide customers with discounted prices or waived delivery fees in exchange for a recurring monthly or annual fee. This can help you secure a customer base and provide predictable revenue.
• Offer promotions and discounts: Introduce special discounts or promotional offers to attract new customers and incentivize them to try your grocery delivery service. This can help you gain a competitive edge and increase customer loyalty.
• Regularly review and adjust your pricing: Monitor market trends, customer feedback, and your financial performance to ensure that your pricing strategy remains competitive and profitable. Be open to making changes when necessary to optimize your revenue and attract a larger customer base.

By carefully determining your pricing strategy and creating a comprehensive financial plan, you can ensure that your grocery delivery service is financially viable and able to meet the needs of both your target market and your business goals.

Develop A Comprehensive Marketing Plan To Attract Customers And Build Brand Awareness.

In order to attract customers and build brand awareness for your grocery delivery service, it is crucial to develop a comprehensive marketing plan. This plan will outline the strategies and tactics you will employ to reach your target market and convince them to choose your service over competitors. Here are some important steps to consider:

• Identify your target market: Understand who your ideal customers are, their demographics, shopping habits, and preferences. This will help you tailor your marketing messages to resonate with them.
• Create a strong brand identity: Develop a compelling brand that reflects the values and benefits of your grocery delivery service. This includes designing a logo, choosing brand colors, and creating a consistent brand voice across all marketing channels.
• Choose the right marketing channels: Determine the most effective channels to reach your target market, such as online advertising, social media platforms, email marketing, or traditional advertising methods. Consider the behavior and preferences of your target market when selecting the channels to focus on.
• Utilize social media: Leverage the power of social media platforms to connect with your target market, engage with them, and promote your grocery delivery service. Create compelling content, run targeted ads, and interact with your audience to build a loyal following.
• Optimize your website and app: Ensure that your website and app are user-friendly, visually appealing, and optimized for search engines. This will improve your online visibility and make it easier for potential customers to find and navigate your platform.
• Offer promotional incentives: Attract new customers by offering promotions, discounts, or special offers. This could include free delivery for first-time customers, referral programs, or loyalty rewards to encourage repeat business.

Tips for developing your marketing plan:

• Research your competitors' marketing strategies to identify any gaps or opportunities in the market.
• Consider partnering with influencers or local businesses to expand your reach and tap into their existing customer base.
• Track and analyze the effectiveness of your marketing efforts using analytics tools to make data-driven decisions and optimize your strategies.
• Continuously evaluate and refine your marketing plan based on customer feedback, market trends, and emerging technologies.

By developing a comprehensive marketing plan, you can effectively attract customers and build brand awareness for your grocery delivery service. Remember to continually adapt and refine your strategies to stay ahead of the competition and meet the evolving needs of your target market.

Outline The Logistics Of Your Delivery Operations, Including Sourcing Vehicles And Hiring Drivers.

When it comes to operating a successful grocery delivery service, the logistics of delivery operations are crucial to consider. Here, we will outline the key steps to take in order to ensure a smooth and efficient delivery process.

Sourcing Vehicles: A reliable fleet of vehicles is essential for delivering groceries to your customers. Consider the size and capacity requirements for your deliveries and choose vehicles accordingly. You may opt for vans, cars, or even bicycles for eco-friendly options. It is important to ensure that your vehicles are well-maintained and equipped to securely transport groceries.

Hiring Drivers: Hiring competent and reliable drivers is essential to provide excellent customer service and ensure timely deliveries. Look for drivers who have a good driving record and are familiar with your local area to navigate efficiently. Conduct thorough background checks and ensure they are properly trained in customer service and handling perishable goods.

Tips for Sourcing Vehicles:

• Consider leasing vehicles initially to minimize upfront costs.
• Research insurance options for your vehicles to protect your business.

Tips for Hiring Drivers:

• Advertise job openings on reputable job boards and local community websites.
• Have a thorough interview process to assess candidates' driving skills and customer service abilities.
• Consider implementing a training program to ensure drivers understand your company's values and expectations.

By outlining the logistics of your delivery operations, sourcing the right vehicles, and hiring competent drivers, you can establish a strong foundation for your grocery delivery service. A well-planned and executed delivery process will contribute to customer satisfaction and contribute to the overall success of your business.

Secure Any Necessary Permits, Licenses, And Insurance Required To Operate A Grocery Delivery Service.

When starting a grocery delivery service, it is crucial to ensure that you have obtained all the necessary permits, licenses, and insurance to operate legally and protect your business. This step is essential to establish trust with both your customers and the authorities.

To begin, research the specific requirements for operating a grocery delivery service in your area. Contact your local government agencies or regulatory bodies to inquire about the permits and licenses that are mandatory. This will vary depending on your location, so it is important to understand the specific regulations that apply to your business.

• Apply for the required permits and licenses promptly to avoid any potential delays in launching your service. This may include permits for food handling and transportation, business licenses, and any necessary certifications.
• Make sure to also secure the appropriate insurance policies to protect your business, employees, and customers. This may include liability insurance, commercial auto insurance for your delivery vehicles, and workers' compensation insurance if you have hired drivers or employees.
• Research and follow all the necessary legal requirements and regulations when it comes to permits, licenses, and insurance. Compliance is crucial for the success and longevity of your grocery delivery service.
• Consult with an attorney or advisor with experience in the food and delivery industry to ensure you are meeting all legal obligations.
• Keep track of any renewals or updates required for your permits, licenses, and insurance policies. Set up a reminder system or calendar to stay organized and avoid any lapse in coverage or legality.

By securing all the necessary permits, licenses, and insurance, you demonstrate your commitment to operating a legitimate and trustworthy grocery delivery service. This not only protects your business, but also provides peace of mind to your customers, suppliers, and partners. Remember to regularly review and update your compliance requirements as regulations may change over time.

In conclusion, writing a business plan for a grocery delivery service requires careful consideration and thorough research. By following the nine steps outlined in this checklist, you can create a solid foundation for your business and increase the chances of success.

Start by defining your target market and understanding their needs and preferences. Conduct market research to gauge the demand for grocery delivery services in your area and analyze your competition to identify ways to differentiate yourself. Establish partnerships with grocery stores and suppliers, determine your pricing strategy, and create a comprehensive financial plan.

Additionally, develop a marketing plan to attract customers and build brand awareness, and outline the logistics of your delivery operations, including sourcing vehicles and hiring drivers. Lastly, ensure you secure any necessary permits, licenses, and insurance to operate your grocery delivery service legally and responsibly.

By following these steps, you will lay the groundwork for a successful grocery delivery service that meets the needs of your target market and provides a seamless and convenient shopping experience for customers.

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Route Optimization and Planning

How to start & optimize your grocery delivery business.

September 2, 2020 8 min read

Grocery store delivery is all about logistics. Whether you bring fresh produce from farm to table or dry goods from a warehouse to your customer’s front door, your business relies heavily on planning, routing, and scheduling—three major components of logistics. So, if you want to delivery groceries successfully and efficiently, logistics is what you need to optimize. We’ve helped grocery services across the globe do just that. We know how to reduce mileage and spend to increase profit margins, how to simplify routing to increase on-time delivery rates, and how to personalize your customer experience without hiring a huge customer support team. Here’s everything you need to know to optimize the last mile for your grocery delivery business:

How to Start a Grocery Delivery Business: What You Need to Know

What optimization means for a grocery delivery business, why you should always be optimizing, how to optimize grocery delivery services using optimoroute, optimized pricing based on your fleet.

Starting a grocery business is like starting any food delivery business: you need a sound business plan, the right equipment and employees, and processes in place to scale your business and maximize operational efficiency . 

To start your own grocery delivery business, you’ll need to:

• Create a plan around your unique business idea. To compete with Amazon, Walmart, and other online grocery delivery businesses, you’ll need to differentiate your business plan by offering unique products, services, or prices (think vegan grocery delivery in four hours or less).
• Assemble tools, supplies, and hire your team. Be sure to include a POS system and route optimization software in your shopping list.
• Test out your workflows for functionality. Set aside time to do a few test runs so you and your team can refine your working processes before you open your doors.
• Start marketing ahead of your grand opening. Use social media to connect with ideal customers in your target market and build excitement.
• Launch and scale your business. Ensure all of your processes are running at max efficiency, and it will be easier to grow your business.

Check out our guide on how to start a food delivery business for detailed information on how to succeed at each step. Plus you’ll get tips on how to approximate start-up costs, hire your dream team, mitigate marketing expenses, and much more.

Once your grocery delivery business is up and running, it’s all about optimization. The more you streamline your workflows and processes, the faster and easier you can expand to new territories, open additional stores, and take on more orders.

Optimization is the process of refining an operation or a series of tasks to meet a goal or a set of goals. For grocery and food delivery businesses , this means refining logistics to increase your bottom line. It’s all of the steps you must take to get to higher revenue and profitability, whether you’re a startup or an established business. Optimization equates to:

• Time saved -When planning, scheduling, and other processes are optimized, they should take less time to complete.
• Routes shortened – Optimized routes are those that use the lowest mileage and/or are the least expensive, and ensure that perishable goods are delivered as fast as possible.
• Adaptability – Optimization helps businesses overcome challenges, such as a driver getting delayed at a delivery or running into traffic.
• A better customer experience – Shorter routes and less time planning equate to shorter turnaround times for your customer base and a better overall customer experience.
• Scalability – When all of your business’s processes are optimized, your bottom line increases, and you can reinvest to grow your company.

Optimization is the key to growing a business because it helps you identify areas for growth and reduce wasted spend, and it’s especially important for small businesses or local businesses operating on tight margins. Small tweaks can yield massive results. For example, route optimization—sending delivery drivers on the shortest and least expensive routes—not only ensures you’re spending the least amount possible on gas but also cuts down on vehicle maintenance and increases your delivery capacity. When Hardie’s Fresh Foods , a major distributor of fresh food in Texas, optimized their last mile delivery routing, planning, and scheduling, they cut mileage down across their fleet by 20% and reduced driver costs by 12%. They used OptimoRoute to increase their delivery capacity by 14% and raise their overall on-time delivery rate from 89% to 94%.

You must always be optimizing because delivery businesses are full of variables. Order volumes and product demands change. Just 12 months ago, in-store grocery shopping still reigned supreme. Now, more than 50% of consumers say they have purchased groceries online in the last year, whether from a desktop or mobile app. The exponential growth in demand for delivery of groceries was catapulted by COVID-19, but consumers like Katrina Caringi say they will continue using grocery delivery even after social distancing restrictions have been lifted, citing convenience as a major incentive. Planning and scheduling needs shift. Employees take vacations, demand fluctuates, and vehicles need downtime for servicing and maintenance. So, you can’t use the same schedule every week or even every month. Customer expectations surrounding the delivery experience change, too. Thanks to advances in technology, more than half of consumers now expect to be able to track delivery orders in real-time. And courier services like Instacart and Shipt have obliterated next-day delivery by offering same-day delivery or even turnaround times “as little as 1 hour.” Add all of these variables to changing traffic patterns, weather-related challenges, and the unpredictability of daily life, and it becomes very clear that optimization isn’t something you can “set and forget.” It’s something that business owners have to incorporate into their business model from day one and work on over time to ensure profitability.

Fortunately, there is one tool you can use to easily optimize your grocery delivery business. OptimoRoute is a robust route optimization software that calculates the most efficient last mile delivery routes based on the needs of your unique company. You can use OptimoRoute to improve driver scheduling, offer customers real-time visibility, and scale your field service operations. Here’s how:

Plan and schedule

To plan delivery routes and schedule drivers through OptimoRoute, you simply take the Excel spreadsheet or other document that lists your upcoming orders along with the delivery addresses and upload it. You can also include order IDs, delivery windows, and any special requirements, such as a refrigerated truck. OptimoRoute factors in several planning objectives, including scheduling the number of drivers needed for each shift, maximizing delivery capacity, and respecting overtime constraints. You can set custom workload balancing based on whether you want drivers to travel the shortest distance or you want grocery orders to be evenly distributed among your team. All of this functionality combines to make planning and scheduling easier, faster, and more effective. Dispatchers, or route planners, are able to clearly see when more drivers are needed to cover demand—and they’ll know early because OptimoRoute lets you plan up to five weeks in advance.

Food delivery businesses all over the world have increased their planning efficiency significantly using OptimoRoute. Hardie’s Fresh Foods is now able to plan routes for more than 8,000 weekly deliveries 8x faster. Oco Meals , a Vancouver-based meal delivery service, can plan 3x as many deliveries 10x faster.

Route drivers

OptimoRoute enables you to pair drivers with orders, set delivery times, and route courses in a fraction of the time compared to manual planning and routing. Once your parameters are set, OptimoRoute automatically factors in driver constraints, order delivery slots, delivery territory boundaries, and the capacity of each individual vehicle. These settings can be saved for future orders, too, so routing and scheduling become even faster.

You can use the “Return to Depot” feature to easily route multiple loads for drivers during a single shift. Finally, you can schedule driver breaks in such a way that your team gets the rest they need and breaks have the least impact on deliveries. It’s a win-win for your employees and your customers.

Adapt to obstacles

If you want to succeed amidst the chaos and challenges of the real world, you need to be able to adapt quickly. Adaptability is the key to overcoming obstacles, whether you’re facing rush hour traffic on a Friday or a global pandemic. We can see the value in adaptability by looking at businesses like Medvedgrad Brewery and Local Roots NYC . Both businesses pivoted their logistics at lightning speed when faced with coronavirus-related shutdowns, and it spelled the survival of their businesses during a time when companies were closing down left and right. Thankfully, not all of the challenges you’ll face will require a complete overhaul. Some will simply be a matter of rerouting a driver to avoid road closures or rescheduling a delivery because a customer inputs the wrong address. Regardless of the magnitude of the obstacles along your last mile delivery journey, OptimoRoute will help you find a solution by offering real-time visibility. Live tracking is the key to effectively troubleshooting hurdles when you’re managing drivers who are spread out over a large geographical area.

Need to fit an extra stop into one of your driver’s routes? OptimoRoute will show you who is running early, on-time, and late, so you can replan routes the best way possible. If one of your drivers gets a flat tire, you can see who is closest to their location and send that second driver to pick up any temperature-sensitive items. The OptimoRoute Driver App also enables drivers to troubleshoot roadblocks without having to call in to dispatch for help. Drivers are able to access customer phone numbers and notes, so they can call a customer if they’re having trouble finding their house or getting through a gate.

Automate customer notifications

According to Supply and Demand Chain Executive , 88% of consumers want real-time tracking when they purchase an order for delivery. You can give your customers what they want and optimize your customer experience with OptimoRoute customer notifications.

Customize your delivery messages and set them to automatically send at key stages: when a delivery is on its way, when it’s getting close, and then when it’s delivered. Your customers will receive an email or SMS notification with a link to track their orders in real-time.

Analyze data

To optimize your delivery routes long-term, you need to analyze your data over time. OptimoRoute automatically tracks and stores your team’s performance and provides you with concrete information. You can then use these analytics to adjust capacity plans and routing or scale your business. For example, if you want to know how many drivers you need working to accommodate your holiday rush , you’ll need to know how many deliveries each driver can fulfill during a shift. OptimoRoute shows you an average for your entire team and breaks down those numbers for each individual driver. You get deep analytics you can use to make informed decisions and scale your business to meet demand, expand your territory, or even open a new location.

Tomato Mountain Farm used OptimoRoute analytics to reinvent their delivery system, and it helped them scale their subscriber list from 300 to 1,200 in just one month. They were able to do this while maintaining profitability and reinvesting to expand their delivery fleet.

At OptimoRoute, we believe your business expenses should be optimized, too. That’s why we offer a 30-day free trial, so you can try out our unique features and see what increased efficiency means for your grocery delivery business—at no cost. When your trial period is over, our flexible pricing structure enables you to change your plan based on your fleet. You can easily scale your plan up during the Thanksgiving rush and scale back down whenever you need to based on the number of drivers you have working.

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Grocery Delivery Business

Back to All Business Ideas

How to Start a Grocery Delivery Business

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on April 22, 2022 Updated on March 13, 2024

Investment range

71,550 - $144,100

Revenue potential

$109,500 - $1,095,000 p.a.

Time to build

Profit potential

$43,800 - $219,000 p.a.

Industry trend

When pandemic lockdowns began, online grocery delivery took off like wildfire, and the industry has grown more than 150% since 2019. The market shows no sign of slowing, and while it may seem daunting to compete with the likes of Amazon Fresh and Instacart, you could start your own grocery delivery business and make good money if you do it right. 

But doing it ri ght requires an understanding of the process of launching a business. Luckily, this step-by-step guide provides all the information you need to get a successful grocery delivery business off the ground. 

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting a grocery delivery business has pros and cons to consider before deciding if it’s right for you.

• Steady Revenue – Customers can pay a monthly or annual fee for your service
• Flexible – Run your business from home, make your own hours
• Hot Market – Demand is growing fast!
• Saturated Market – Compete with large grocery delivery services
• Good Tech Required – To be competitive you need an app, which can be costly

Grocery delivery industry trends

Industry size and growth.

The grocery delivery market is directly related to the online grocery industry

• Industry size and past growth – The US online grocery industry is worth $39.2 billion in 2022 after expanding more than seven-fold in the last decade.(( https://www.ibisworld.com/industry-statistics/market-size/online-grocery-sales-united-states/ ))
• Growth forecast – The US online grocery industry is projected to grow nearly 7% in 2022. 

Trends and challenges

Trends in the grocery delivery industry include:

• 60% of US consumers are now buying their groceries online and most get them delivered. This is a huge market, offering opportunity for even small businesses.
• Same-day grocery delivery is growing in demand, and many grocery delivery services can’t keep up, providing even more opportunities for startups.

Challenges in the grocery delivery industry include:

• Grocery delivery logistics must be seamless, as customers can easily switch services if a problem occurs with their delivery.
• Grocery stores and wholesalers tend to choose large grocery delivery services as partners, perceiving that they will be more reliable. 

How much does it cost to start a grocery delivery business?

Startup costs for a grocery delivery business range from $70,000 to $140,000. The largest cost is for the development of an app. 

Alternatively, you could just have a website and market yourself as a local errand service that will do grocery shopping and grocery delivery, but the revenue potential is much lower. Your startup costs with this model would be only a few thousand dollars. 

How much can you earn from a grocery delivery business?

As with Amazon Prime, grocery delivery businesses often charge a subscription fee of around $10 per month for unlimited free deliveries and mark up the cost of the goods by about 10%. Alternatively, you could just charge an added fee of $10 per delivery. These calculations will assume that you will choose the latter, and that your profit margin after the costs of drivers and overhead will be 40%.

In your first year or two, you could do 30 deliveries a day, bringing in $109,500 in annual revenue. This would mean $43,800 in profit, assuming that 40% margin. As your brand gains recognition and you get repeat customers, sales could climb to 300 deliveries a day. At this stage, you’d rent a commercial space, hire more staff, and expand your locations, reducing your profit margin to around 20%. With annual revenue of $1,095,000, you’d make a fantastic profit of $219,000.

What barriers to entry are there?

There are a few barriers to entry for a grocery delivery business. Your biggest challenges will be:

• The costs of grocery delivery app development
• Competing with established firms like Instacart and Amazon Fresh

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Step 2: hone your idea.

Now that you know what’s involved in starting a grocery delivery business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research grocery delivery businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a grocery delivery app that offers meal planning or a personalized grocery shopping and delivery service, meaning that you review the list with customers and stay in touch with them while you’re shopping to offer suggestions. 

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as wholesale food delivery or small local market delivery.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products or services

Your services may include grocery shopping as well as delivery. Your app could also offer features such as meal planning. 

How much should you charge for grocery delivery?

A grocery delivery business can charge a subscription fee, usually about $10 per month, and add an extra 10% to the cost of the goods. Alternatively, you could just charge a per delivery fee of about $10. When you’re first starting out, after the costs of drivers and overhead, you should aim for a profit margin of about 40%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

With so many people ordering groceries online, your target market will be broad. You should spread out your marketing to include sites like TikTok, Instagram, and Facebook. You’ll also need to contact grocery stores or wholesalers to contract with them. You can connect with them on LinkedIn or find them on Google or Yelp and contact them directly. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office or distribution center. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “grocery delivery” or “online groceries”, boosts SEO
• Name should allow for expansion, for ex: “FreshDrop” over “Gluten-Free Express”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator . Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: A concise overview of the grocery delivery business plan, highlighting its key elements and objectives.
• Business Overview: Describes the nature of the grocery delivery business, its mission, vision, and overall purpose.
• Product and Services: Outlines the range of grocery delivery services offered, emphasizing convenience, variety, and quality.
• Market Analysis: Examines the target market for the grocery delivery service, including demographics, trends, and potential demand.
• Competitive Analysis: Evaluates existing and potential competitors in the grocery delivery market, highlighting strengths and differentiators.
• Sales and Marketing: Details the strategies to promote and sell the grocery delivery service, encompassing advertising, promotions, and customer acquisition.
• Management Team: Introduces the key individuals responsible for leading and managing the grocery delivery business, emphasizing their relevant skills and experience.
• Operations Plan: Outlines the day-to-day processes and logistics involved in running the grocery delivery service, ensuring efficiency and customer satisfaction.
• Financial Plan: Presents a comprehensive financial overview, including startup costs, revenue projections, and break-even analysis for the grocery delivery business.
• Appendix: Provides additional supporting documents and information, such as market research data, legal documents, and any other relevant details.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to grocery delivery businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your grocery delivery business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

Form Your LLC

Choose Your State

We recommend ZenBusiness as the Best LLC Service for 2023

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital: Venture capital investors take an ownership stake in exchange for funds, so keep in mind that you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
• Angel investors: Reach out to your entire network in search of people interested in investing in early-stage startups in exchange for a stake. Established angel investors are always looking for good opportunities. 
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a grocery delivery business. You might also try crowdfunding if you have an innovative concept. If your business does well and you’re poised for high growth, you may be able to attract angel investors or venture capital.

Step 8: Apply for Licenses/Permits

Starting a grocery delivery business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your grocery delivery business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Grobino , appscrip , or PURBIS , to manage your orders, deliveries, and payments.

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

For your grocery delivery business, the marketing strategy should focus on showcasing the convenience, reliability, and range of products you offer. Emphasize the time-saving and hassle-free aspect of your service, along with any unique features like same-day delivery, organic or local produce, or special dietary options. Here are some powerful marketing strategies for your future business:

Kickstart Marketing

• Professional Branding : Your branding should convey convenience, freshness, and trustworthiness. This includes your logo, delivery vehicles’ branding, and the design of your website and app.
• Direct Outreach : Connect with local communities through flyers, local events, and partnerships with community organizations. Offer introductory discounts or trial periods to attract first-time customers.

Digital Presence and Online Marketing

• Professional Website and App : Develop a user-friendly website and mobile app that make it easy for customers to browse products, place orders, and schedule deliveries. Implement SEO best practices to rank for local searches related to grocery delivery services.
• Social Media Engagement : Utilize platforms like Facebook and Instagram to promote your services, share customer testimonials, and post about special deals or new product offerings.

Content Marketing and Engagement

• Food and Nutrition Blog : Share informative content on meal planning, healthy eating, and recipes. This can help establish your brand as a helpful resource in your customers’ daily lives.
• Email Newsletters : Regular newsletters can keep your customers informed about new products, special promotions, and seasonal offerings.
• Video Content : Create engaging video content that highlights the convenience and benefits of your service, customer testimonials, or behind-the-scenes looks at your operation.

Experiential and In-Person Engagements

• Pop-Up Events : Host pop-up events in local markets or community centers to showcase the quality of your products and the efficiency of your service.
• Local Sponsorships : Sponsor local events, sports teams, or community initiatives to build brand awareness and goodwill in your service area.

Collaborations and Community

• Partnerships with Local Producers : Collaborate with local farms and food producers to offer a range of fresh, local products, appealing to customers who support local businesses.
• Joint Promotions with Local Businesses : Partner with local businesses for cross-promotion, such as offering discounts to each other’s customers.

Customer Relationship and Loyalty Programs

• Loyalty Rewards Program : Implement a program that rewards repeat customers with discounts, special offers, or points towards future purchases.
• Referral Program : Encourage customers to refer friends and family by offering them discounts or rewards for each new customer they bring.

Promotions and Advertising

• Targeted Online Advertising : Use digital advertising platforms like Google Ads and Facebook Ads to target local audiences, emphasizing the convenience of your service.
• Community-focused Campaigns : Run marketing campaigns that resonate with your local community, highlighting your involvement and support for local issues and causes.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your grocery delivery business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your grocery delivery business could be: 

• Groceries at your door in 90 minutes or less! 
• Same-day delivery of local gourmet foods 
• The freshest groceries delivered fast 

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a grocery delivery business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in grocery delivery for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in grocery delivery. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a grocery delivery business include:

• Delivery Drivers – deliver grocery orders
• Customer Service Reps – take customer calls, resolve issues
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Grocery Delivery Business – Start Making Money!

People can do almost anything online now, and have anything they want delivered to their door. Online grocery shopping and grocery delivery are booming, so now is the perfect time to get in on the action. Developing an app takes a significant investment, but you can get a phenomenal return and eventually grow your business into a major player. 

You came to the right place to learn about starting a business, now it’s time to forge ahead and get your successful grocery delivery business up and running!

• Grocery Delivery Business FAQs

Grocery delivery businesses can be very profitable. The key is to develop an easy-to-use app and partner with grocery stores or wholesalers to pick up and deliver their goods.

To differentiate your grocery delivery business from competitors, you could focus on providing exceptional customer service, offering a wider selection of grocery items or specialized products, using eco-friendly and sustainable packaging, or partnering with local farmers or suppliers to offer fresh and locally-sourced produce.

To expand your grocery delivery business to other markets or distribution channels, you could conduct market research to identify potential target markets and customer preferences, develop a strategic plan for expansion, and invest in marketing and advertising campaigns to promote your services.

To ensure the quality and freshness of your grocery products during delivery, you could invest in refrigerated delivery vehicles or insulated containers, use appropriate packaging materials to prevent damage or spoilage, and implement strict inventory and quality control measures. 

Yes, you can start a grocery delivery business on the side as long as you comply with any legal and regulatory requirements in your area. You may need to invest in supplies and equipment such as a vehicle, cooler bags, and storage containers, and ensure that you have a reliable and efficient delivery process. You could also consider starting small and gradually expanding your business as demand grows.

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Business Name
• Create a Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Licenses/Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run a Grocery Delivery Business - Start Making Money!

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18+ Years of Industry Experience

How to Start a Grocery Delivery Business: Revenue Model & Key Features

Last Updated: 18th September, 2023

Consumers today continue to shift to a digital ecosystem with all ages going online to purchase groceries and having them delivered to their door instead of trudging around a brick-and-mortar store. This shift is creating new opportunities, broadening the grocery business landscape.

According to Vantage Market Research, the global online grocery delivery services market is expected to expand at a CAGR of 26.9% from 2023 to 2030 and is projected to reach a value of USD 1670.3 Billion by 2030. In this post, we describe in detail how to start a grocery delivery business, along with its revenue model, features and more.

Table of Contents

Prominent grocery delivery service businesses, future of online grocery delivery businesses, starting an online grocery delivery business.

• Cost to Start an Online Grocery Delivery Business?

Growcer – An Online Grocery Delivery Solution from FATbit Technologies

When it comes to grocery delivery services, it is convenience that you are ultimately paying for. Online grocery delivery businesses not only offer doorstep delivery but they also provide items at a discounted price. Hence, you not only get to save time but might also end up saving money. With the information, let us take a look at a few prominent grocery delivery service businesses.

Postmates is inarguably the most prominent player in this industry. With their service spanning more than 15 states in the USA, Postmates enjoys a massive presence and serves a huge number of customers every hour, every day, every year.

Since its inception in May 2011, they have delivered more than a billion goods and made an estimated $730 Million revenue.  

Instacart is a North American leader in online grocery as its delivery services are available to more than 85 percent of U.S. households and 70 percent of Canadian households. It has partnered with more than 350 national, regional, and local retailers,  to deliver from more than 25,000 stores. Instacart reportedly generated $2.5 Billion in 2022 and is predicted to reach $35 Billion by 2023. 

FreshDirect

Founded in 2002, FreshDirect is an American online grocery delivery company that is headquartered in the Bronx, New York. The company sells fresh produce, meat, dairy and so on by finding the shortest route from dairies, fisheries and farms to the table. According to Crunchbase, it has raised $189 Million in funding.

Shipt is an American grocery delivery service that was founded in 2014. Headquartered in Birmingham, Alabama, US, Shipt provides access to a variety of stores and product categories including fresh produce, household essentials and more. It has raised $65.2 Million in funding according to Crunchbase.

Technological advancements are reshaping the grocery eCommerce landscape. From user experience to order preparation and last mile delivery, technology is disrupting several parts of the online value chain. For more information, watch the video below to know more about the future of online grocery delivery businesses and launching a grocery multi-vendor marketplace.

Since the market seems lucrative for online grocery delivery businesses for years to come, it is appropriate for entrepreneurs/grocery retailers to set their foot in this direction and start their own online grocery delivery business. In this section, we list the steps to start grocery delivery business.

Identify Your Target Market

The first step to starting an online grocery delivery business is conducting market research and figuring out the target market, which means finding out everything about the needs and wants of individuals. Once you have the understanding, you can delve deeper into their behaviors. Hence, if you are just starting out, having a defined target market will not only help you in starting your business, but will also help in creating effective marketing strategies. To define your target market, you can start by answering the following questions:

• What is the need of your online grocery delivery business?
• Who will benefit from your online grocery delivery service?
• Who will be using the grocery delivery platform?
• What will differentiate your business from the competition?

To find the answers to these questions, you can:

• Conduct interviews with a group of people
• Keep a tab on the competitors
• Dive into the existing industry research
• Demographically segment the market (age, education, income level and more)
• Use research tools such as Google Trends, Google’s Keyword Planner, Facebook’s Audience Insights, and so on

Choose a Business Name and Form a Legal Entity 

Choosing a business name and forming a legal entity is one of the primary steps to give your idea a form. An authentic registration for name, a form of business, and compliances is a must. Furthermore, as online grocery delivery businesses need to pay taxes for the online sale of groceries, so registering under appropriate accounts to pay these taxes is a mandate.

Choose Your Business Model

In its true essence, an online grocery delivery business works on the principle of picking up an item from the vendor and delivering it to the buyer’s doorstep. Hence, several business models are available to start grocery delivery business. A few of them are listed below:

Multi-Vendor Business Model

Inventory based business model, hyperlocal business model, click and collect/buy online, pick up in-store (bopis) model, scheduled delivery model.

In a multi-vendor business model, multiple sellers get a technical infrastructure to sell their vast range of grocery products to the buyers. Furthermore, it is also known as the ‘zero inventory model’ as the owner of the platform does not hold any inventory of its own.

Using the inventory model, the grocery eCommerce business is responsible for storing inventory from various retailers in a warehouse, maintaining and keeping a track of it and providing on-time delivery of grocery orders to the buyers. 

As the name suggests, hyperlocal refers to a small geographical area. So, this business model caters to the needs of grocery buyers within a defined area. The main USP of this business model is that the grocery order deliveries are prompt. 

Click and collect or BOPIS model brings the benefits of online shopping while still retaining the charm of picking the grocery order from the brick and mortar store. It offers an omnichannel experience to buyers as they can purchase groceries online and as per their availability pick them from the store.

This model facilitates delivery of grocery orders as per the schedule that fits the needs of all the parties involved, i.e. the retailer, the delivery staff personnel and the buyer.

Launch A Grocery Delivery Platform as per Your Requirement

Decide the revenue channels.

Once the business model has been chosen, you need to decide the revenue streams. They will not only help you generate revenue but will also help in driving the overall growth and profitability of your online grocery business. Some of the possible revenue channels include:

Commissions

Commission by far is the oldest and the most preferred revenue channel for marketplace owners. There can be two prominent ways to charge commissions with the sale of groceries online:

• Commission on Each Transaction –  This is chargeable to the vendor/seller on every sale they make on the marketplace platform. This way, the marketplace owner can earn according to the sales happening on their portal.
• Commission on Each Delivery –  Under this type of commission, the buyer and the driver are charged with some amount on their purchase and its delivery, credited to the marketplace owner’s account whenever an order is completed.

Vendor Subscription Fees

Also called membership fee, you can use this revenue channel to bring in vendors who are not comfortable with the commission model by paying a fixed subscription fee. These vendors can use your service for a fixed period of time (quarterly, bi-annually, annually, and so on).

Banner Ads and On-site Promotion

A good source of drawing revenue from the marketplace platform is allowing vendors to carry out their personalized ads via banners and schemes on the platform homepage. The admin can charge the sellers for the space and number of campaigns they want to run. Such advertisements can act as business-boosting elements for the website as well as for the vendors. A good amount of revenue can come in from certain independent product ads as well.

Select the Features

As more and more individuals are transitioning to online channels for grocery shopping, it is pivotal to make their user journey remarkable. This can be done via features of the online grocery marketplace. Discussed below are some of the pivotal features to have in an online grocery delivery platform.

Simple Signup

The signup process for grocery retailers and buyers should be simple. If multiple steps are there for the signup then the users may get discouraged and move to your competitors site. Hence, simple signup is a must.

Custom Search and Navigation

As a marketplace offers a lot of grocery products to the buyers, it is important to have easy navigation and a custom search feature so that the buyers can get the right product quickly.

Easy Checkout

Easy checkout with a reduced number of checkout steps is pivotal to decrease cart abandonment, boost sales and create more revenue.

Multiple Payment Options

It is crucial for an online grocery delivery service provider or any e-commerce store to have multiple payment options for consumers, making it easy for them to purchase.

Order Tracking

Using this feature, buyers can keep a track of the status of their order, i.e. they can review the real-time status of their grocery order.

Ratings and Reviews

Allow buyers to provide their feedback through ratings and reviews. This feature helps in trust building and also provokes new customers to complete their purchase.

Advanced Reports and Statistics

The admin should have full access to all the reports and analytics so that they can evaluate business growth and plan future strategies.

Seller Approval and Management

The admin should be able to approve the request of sellers to join the marketplace through a seller approval management feature.

Product Catalog Management

Every marketplace should have a clean and comprehensive product catalog enlisting essential information about the product. Product catalog management facilitates the same.

Launch a Feature-Rich Grocery Delivery Platform

Create a multi-vendor marketplace.

The next step is to create a multi-vendor grocery delivery marketplace. This can be done via following two approaches:

Custom Development

Custom grocery delivery marketplace development approach can be followed if you have custom requirements for which tailored functionality is needed. It is more time consuming and expensive because the development is done from scratch. 

Opting for a Readymade Solution

The second approach is to opt for a ready made solution to launch an online grocery delivery marketplace. As the features offered by a ready-made solution are time tested, this is a quicker and cost-effective way to launch the marketplace for the delivery of groceries.

Market Your Online Grocery Business

Once the marketplace is ready, it is pivotal to market it to broaden the horizon of the target audience by bringing awareness. Marketing can be done via following methods:

• Search Engine Optimization
• Content Marketing
• Social Media Marketing
• Pay Per Click Advertising
• Email Marketing

Cost to Start an Online Grocery Delivery Business

Now that we have discussed the steps to start an online grocery delivery business, let’s take a look at the cost of starting one. If you choose to develop a multi-vendor marketplace platform then the biggest cost-driving factor is going to be its complexity, i.e. the features and functionality to be included. Cost of development depends on the time needed for the development of the platform and the availability of resources.

Moderate Time Needs

• Online Grocery Delivery Platform with Simple Functionality (3-6 months) –   A decent grocery delivery platform with simple functionality will take approximately 500-800 development hours.
• Online Grocery Delivery Platform with Medium Functionality (5-9 months) –   A custom grocery delivery platform with medium complexity will require approximately 800-1200 hours of development.
• Online Grocery Delivery Platform with Complex Functionality (8 months above) – A grocery delivery platform that requires a lot of customization will exceed 1200 hours of development.

Hourly Rates (Region Wise)

• North America – $150/Hr
• Australia – $82/Hr
• UK – $71/Hr
• South America – $43/Hr
• Eastern Europe – $40/Hr
• India – $25/Hr

Hence, an online grocery delivery platform can approximately take 1900 to 2400 development hours. And, the development cost could be anywhere between $47,000 to $360,000. Instead, you can choose Growcer, a grocery eCommerce solution from FATbit Technologies that would cost you way less.

Growcer is a readymade, fully customizable grocery eCommerce solution that is equipped with all the necessary modules- admin, seller, buyer, and delivery staff. Enriched with user-centric features, platforms like Walmart, Peapod, FreshDirect, Instacart, and more, can be built using it. Growcer also offers pre-integrated APIs and robust ready-to-use mobile apps for buyers and delivery staff.

Being a self hosted-platform, clients do not need to have any technical expertise. Further, it is a white-label solution and offers a plethora of revenue-generating options to business owners. That said, Growcer has enabled many startups to do more. A few of them are mentioned below:

• ShopExpress –  An online grocery delivery platform that delivers quality products to customers’ doors in Zimbabwe.
• Superkiwi –  Is another online grocery platform in the USA whose mission is to provide quick delivery of groceries that are purchased online, using the platform.
• Tap Retail –  Built using Growcer, Tap Retail is an online grocery marketplace that provides agile delivery of groceries that are purchased online using the platform.
• Dhalmart –  Is a one-stop platform that is dedicated to selling organic vegetables, groceries, and home-cooked food to individuals with busy schedules.
• RX Delivered – Is a drug delivery platform that enables patients, hospitals, and pharmacies to order authentic and high-quality drugs for delivery in Africa.

Start Your Grocery Delivery Business with Growcer

The grocery retail landscape is constantly changing with people shifting to online shopping channels. Hence, starting an online grocery delivery business is a good idea. So, if as an entrepreneur you are excited about starting your own online grocery delivery business in less time, then consider our ready-made solution Growcer. For more information, get in touch with us.

Q1. Is the online grocery delivery business profitable?

Ans : Online grocery delivery business is profitable as more people are ordering groceries online. The transition in consumer behavior is evident and the business is expected to remain profitable for the years to come.

Q2. How much can my business earn per grocery order?

Ans : Businesses mostly charge a fee of 10% to 15% depending on the order size. A fee of $15-$20 can be charged for a grocery order of $150. If on average 100 orders a day are received, then a business owner can make $1500 to $2000 per day. More orders will ultimately result in good profit.

Q3. How should I acquire grocery sellers on my platform?

Ans : Grocery sellers that are active on other marketplaces can be approached. You can research their expectations and provide them with exclusive offers and also have an approachable seller service support system. Implement useful guides and provide them with buyers on board. Further, you can ask grocery store owners to join your online marketplace and increase their sales/ revenue through your platform.

Q4. How should I acquire customers on my platform?

Ans :  Today’s fast-paced life with long working hours, hectic study schedules, and more does not allow employees or students living independently to go out and spend time shopping for groceries. In this context, customers who are looking for on-demand delivery services are ideal as a grocery eCommerce store solves their problem by providing them with flexibility. Buyers can shop any time, from anywhere, and get the order delivered to their doors. You can market your platform on various social media platforms to grab people’s attention.

Q5. How can FATbit Technologies help in growing your business?

Ans : The team of digital marketing experts at FATbit will help you to grow your business online and enhance its online presence through various digital marketing services offered. This includes social media marketing, PPC, and so on.

Want more insights to level up your knowledge?

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Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.

Author: Vibha Sharma

Vibha Sharma is an accomplished senior content writer and marketer at FATbit Technologies, where she brings her passion for storytelling and digital expertise to create compelling narratives. With a Master’s Degree in Computer Applications, Vibha successfully blends creativity with technical acumen. Outside of her professional pursuits, Vibha is a voracious reader, an avid traveler, and a lifelong learner.

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Starting a Grocery Delivery Business: A Step-by-Step Guide

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Last Updated on: July 19, 2023 by Joseph Muriithi

With the rise of online shopping and the increasing demand for convenient services, starting a grocery delivery business can be a lucrative venture. As people’s busy lifestyles continue, many individuals are seeking alternatives to traditional grocery shopping, making this a perfect time to enter the market. In this comprehensive guide, we will walk you through the essential steps to launch your own successful grocery delivery business.

Step 1: Research and Market Analysis

Before diving into any business venture, conducting thorough research and market analysis is crucial. Understand your target market, competition, and existing grocery delivery services in your area. Identify gaps and opportunities that you can capitalize on to differentiate your business and create a unique selling proposition.

Step 2: Develop a Business Plan

A well-crafted business plan is the backbone of any successful enterprise. Outline your business goals, target audience, revenue streams, marketing strategies, and financial projections. Your business plan will serve as a roadmap, guiding you through the various stages of your grocery delivery startup.

Step 3: Legal and Regulatory Requirements

Register your business and obtain all the necessary licenses and permits to operate legally. Depending on your location, you might need a business license, food handling permits, and liability insurance. Complying with legal and regulatory requirements will protect your business and build trust with customers.

Step 4: Define Your Service Area and Delivery Options

Decide on the geographical area you will serve and establish delivery zones. Consider the distance and logistics to ensure efficient and timely deliveries. You may choose to offer same-day or next-day delivery options to cater to different customer needs.

Step 5: Create a User-Friendly Website and Mobile App

In the digital age, an intuitive and user-friendly website and mobile app are essential for your grocery delivery business. Customers should be able to browse products easily, place orders, and make secure payments online. Ensure that your platform is responsive and optimized for mobile devices, as many customers prefer to shop on their smartphones.

Step 6: Partner with Local Grocery Stores or Establish Your Inventory

Decide whether you want to partner with local grocery stores or maintain your inventory. Partnering with established stores can give you access to a wide range of products and expedite the setup process. On the other hand, having your inventory allows for better control over product availability and pricing.

Step 7: Focus on Quality Customer Service

Outstanding customer service is paramount in the grocery delivery business. Ensure that your delivery personnel are polite, punctual, and attentive to customers’ needs. Implement a robust customer support system to handle inquiries, feedback, and complaints promptly.

Step 8: Marketing and Promotion

To attract customers and build a loyal clientele, invest in marketing and promotion. Utilize social media platforms, local advertising, and partnerships to create awareness about your grocery delivery service. Offer promotions, discounts, and referral programs to incentivize first-time and repeat customers.

Step 9: Implement Efficient Delivery Operations

Efficient delivery operations are essential to maintain customer satisfaction. Optimize your delivery routes, invest in reliable transportation, and track orders in real-time. Consider using delivery management software to streamline operations and improve overall efficiency.

Step 10: Gather and Analyze Customer Feedback

Listen to your customers and continuously gather feedback to identify areas for improvement. Use customer feedback to enhance your services, expand your product offerings, and tailor your business to meet evolving demands.

Starting a grocery delivery business requires careful planning, dedication, and a focus on customer needs. By providing a convenient and reliable service, you can establish a strong presence in the market and grow your business steadily. Stay adaptable and open to innovation as the industry evolves, and always prioritize customer satisfaction for long-term success.

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Related business ideas, discover your perfect domain, grocery delivery mini business plan, expected percent margin:, earnings expectations:, actions to hit those numbers:, building a network and inventory:, online presence and marketing:, delivery and operations:, customer service:, cost control:, not what you had in mind here are more ideas, grab your business website name, step 1: determine if the business is right for you, breakdown of startup expenses, breakdown of ongoing expenses, examples of ways to make money, step 2: name the business, registering the name, step 3: create a business plan, writing the business plan, presenting the business plan, step 4: obtain licenses and permits, where to obtain licenses and permits, cost of licenses and permits, benefits of obtaining licenses and permits, step 5: create a website, step 6: market your business, create a promotion plan, utilize word of mouth, monitor your progress, step 7: hire employees, where to find employees, step 8: set up payment processing, setting up payment processing, security measures, step 9: track your progress, celebrate your success, explore more categories, take the next steps.

Food Delivery Business Plan Template

Written by Dave Lavinsky

Food Delivery Business Plan

Over the past 20+ years, we have helped over 1,000 entrepreneurs and business owners create business plans to start and grow their food delivery businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a food delivery business plan template step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your food delivery business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a food delivery business, or grow your existing food delivery business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your food delivery business in order to improve your chances of success. Your food delivery business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Food Delivery Businesses

With regards to funding, the main sources of funding for a food delivery business are personal savings, credit cards, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings is the other most common form of funding for a food delivery business. Personal savings and bank loans are the most common funding paths for food delivery businesses.

Finish Your Business Plan Today!

How to write a food delivery business plan.

If you want to start a food delivery business or expand your current one, you need a business plan. Below are links to each section of your food delivery business plan template:

Executive Summary

Your executive summary provides an introduction to your food delivery business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of food delivery business you are operating and the status. For example, are you a startup, do you have a food delivery business that you would like to grow, or are you operating a food delivery business in multiple regions?

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the food delivery industry. Discuss the type of food delivery business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.  

Company Analysis

In your company analysis, you will detail the type of food delivery business you are operating.

For example, you might operate one of the following types of food delivery businesses:

• Restaurant Delivery : this type of business delivers food prepared by a restaurant to the consumer.
• Meal Kit Delivery: this type of business delivers pre-made meal kits.
• Grocery Delivery: this service delivers grocery orders, and may or may not include personal shopping.
• Veggie Box Delivery : this type of service delivers boxes of vegetables and other produce, either as part of a CSA or another type of program.

In addition to explaining the type of food delivery business you will operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, number of positive reviews, total number of meals or orders delivered, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the food delivery industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the food delivery industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy, particularly if your research identifies market trends.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your food delivery business plan:

• How big is the food delivery industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your food delivery business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your food delivery business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: working professionals, university students, families and retirees.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of food delivery business you operate. Clearly, working professionals would respond to different marketing promotions than retirees, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most food delivery businesses primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.  

Finish Your Food Delivery Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other food delivery businesses.

Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes grocery stores and restaurants. You need to mention such competition as well.

With regards to direct competition, you want to describe the other food delivery businesses with which you compete. Most likely, your direct competitors will be food delivery businesses located very close to your location.

For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What types of food do they deliver?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide better food delivery services?
• Will you offer features or services that your competitors don’t offer?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a food delivery business plan, your marketing plan should include the following:

Product : In the product section, you should reiterate the type of food delivery company that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to food delivery, will you provide personal shopping services or any other services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.

Place : Place refers to the location of your food delivery company. Document your location and mention how the location will impact your success. For example, is your food delivery business located in a busy retail district, restaurant district, etc. Discuss how your location might be the ideal location for your operations.

Promotions : The final part of your food delivery marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Advertising in local papers and magazines
• Reaching out to local websites
• Social media marketing
• Local radio advertising

Operations Plan

While the earlier sections of your food delivery business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your food delivery business, including processing orders, delivering orders, marketing, and maintaining fleet vehicles.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to deliver your 1,000th meal, or when you hope to reach $X in revenue. It could also be when you expect to expand your food delivery business to a new city.  

Management Team

To demonstrate your food delivery business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in managing food delivery businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing food delivery businesses or successfully running small businesses.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you deliver 100 meals per day or per week? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your food delivery business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a food delivery business:

• Location build-out (if applicable) including design fees, construction, etc.
• Cost of equipment and supplies, including company vehicles
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your company vehicle lease or timetables for delivery days you are working on.  

Putting together a business plan for your food delivery is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the food delivery industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful food delivery business.  

Food Delivery Business Plan FAQs

What is the easiest way to complete my food delivery business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Food Delivery Business Plan.

What is the Goal of a Business Plan's Executive Summary?

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of food delivery business you are operating and the status; for example, are you a startup, do you have a food delivery business that you would like to grow, or are you operating a chain of food delivery businesses?

Don’t you wish there was a faster, easier way to finish your Food Delivery business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how Growthink’s business plan advisors can give you a winning business plan.

Other Helpful Business Plan Articles & Templates

How to Start a Grocery Delivery Business

A grocery delivery service will do people’s food shopping for them. They’ll typically partner with a grocery wholesaler to get a wide selection and may offer additional services to their customers to assist with meal planning.

Learn how to start your own Grocery Delivery Business and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a grocery delivery business by following these 10 steps:

• Plan your Grocery Delivery Business
• Form your Grocery Delivery Business into a Legal Entity
• Register your Grocery Delivery Business for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Grocery Delivery Business
• Get the Necessary Permits & Licenses for your Grocery Delivery Business
• Get Grocery Delivery Business Insurance
• Define your Grocery Delivery Business Brand
• Create your Grocery Delivery Business Website
• Set up your Business Phone System

We have put together this simple guide to starting your grocery delivery business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Grocery Delivery Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your grocery delivery business?

Business name generator, what are the costs involved in opening a grocery delivery business.

Costs involved may not be very much to start because you’ll mainly buy what’s already been ordered and you don’t necessarily need a formal space to conduct business. However, you’ll likely want to invest heavily in technology so your customers have an easy way of ordering. You’ll also need to insure your drivers with commercial auto insurance and workers’ compensation, and budget for marketing as well.

What are the ongoing expenses for a grocery delivery business?

Grocery delivery businesses have to account for the cost of salaries, gas, insurance, and equipment maintenance. They'll also need to budget to keep their automation as relevant and reliable as possible.

Who is the target market?

The target market is anyone who can afford luxury, time-saving services or for those who may be unable to drive to the store or shop on their own.

How does a grocery delivery business make money?

Grocery delivery businesses charge people a membership fee for their services and a markup on the cost of food. They may also charge additional fees based on quantity of food ordered and location of the home.

Most delivery services make people sign up for a membership first, charging around $100 for the year. They also may charge a delivery fee or about $10 or so for smaller orders. For larger orders (e.g., over $50), they may waive the delivery fees in lieu of the profits they’re making off their personal wholesale markup. Check out your local competition before setting your terms.

How much profit can a grocery delivery business make?

Profits for grocery delivery services can be considerable in the right neighborhoods. Let’s say you charge a 10% markup for the food you sell, and sell $100,000 worth of food every two months. This leaves you with a profit of $10,000 plus delivery fee charges and membership charges (if applicable.)

How can you make your business more profitable?

You can make your business more profitable by expanding your services with additional perks. For example, delivering people their Starbucks in the morning the moment they step out the door, or offering an express option for small items where people can pay a modest premium to indulge their cravings.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your grocery delivery business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

In most states, it is necessary to obtain a delivery license. Certain state permits and licenses may be needed to operate a Grocery Delivery business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Food Regulations

When selling food, you will need licensing from a local health department; all establishments serving food are required to pass a health inspection. Tips for faring well on a health inspections

There are federal regulations regarding what can and cannot be added to, sold as, and processed with food. Attached is a resource from the Food and Drug Administration detailing the process of starting a food business: How to Start a Food Business

Registration

Businesses are required to register vehicles which will travel across state lines for commercial purposes. Check here for a list of state requirements.

Class B Driver Licensing Requirements

In most states, licences are issued by classes, operating according to the weight of the vehicle being driven. Drivers of standard cars and trucks require a class A commercial driver’s license (CDL), while operators of heavier vehicles, including most tow trucks, require a Class B CDL to operate. More information can be found here.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a grocery delivery business

Look for angles that your competition (or near competition) isn’t serving in the area. For example, are people simply too busy to shop, are they inefficient when they're at the grocery store, or are they finding it difficult to pick meals every week? This will help you decide how to appeal to different types of customers. You can certainly advertise your services online, but you should also consider advertising locally. After all, this is a local service, and passing out flyers on the street can help you engage so and better understand what people are looking for.

How to keep customers coming back

Owners have to consistently deliver groceries on time, every time. They should have contingencies and communication plans in place in case there’s a hiccup and clear contracts with customers that explain the terms. These types of services are unfortunately easy to dismiss for many people if they're not perfect, and it really only takes one bad experience for a person to be turned off to the service entirely.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

People who are organized, creative and familiar with technology. Grocery delivery involves a lot of details to get right so it helps to start with a strong foundation and a focus on accuracy and value.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a grocery delivery business?

The name of the game is flexibility when it comes to grocery delivery businesses. Owners may find themselves doing everything from maintaining relationships with wholesalers to completing the actual deliveries. In addition, owners also need to coordinate pick-up times with staff, keep up with invoicing, and figure out ways to market their services to a greater audience. But the biggest thing an owner may need to do is work with their automated features. Most delivery businesses find they need constant fine-tuning to ensure the customer experience goes well.

What are some skills and experiences that will help you build a successful grocery delivery business?

Owners should definitely have some type of experience working in the delivery industry. There’s a lot to keep track of when it comes to perishable food, especially considering that schedules can be difficult to coordinate with customers. From spoiled onions to box theft, there are a million ways for the order to go wrong. That’s why it helps to understand the logistics of ordering and delivering. It can’t prevent every mishap, but it can go a long way to ironing out the kinks before they actually occur.

What is the growth potential for a grocery delivery business?

People are starting to shift a significant portion of their income into services and they’re willing to pay a premium for convenience. As cities like NYC and LA continue to become more condensed, grocery delivery can look more and more appealing to a young professional who probably doesn’t want to navigate traffic or spend time perusing 30 different supermarket aisles.  

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a grocery delivery business?

Grocery delivery services are somewhat new, meaning owners are still in uncharted territory. It’s very exciting for an entrepreneur who wants to make an impression on their customers, and there are a variety of ways to do it. For example, popular meal delivery services such as Blue Apron may look more appealing to busy professionals without a lot of time to plan their meals, so grocery delivery services may want to try offering a simplified version of this service as just one component of their businesses.

You can also offer a variety of options to your customers based on their previous orders. You can suggest meals or products to them to make their shopping experience easier. Or you can set up customers with a standard shipment and invoice every week so they don’t even have to think about it. Make sure you identify your target market before moving forward. A 30-year-old single professional will need a different message than a 55-year-old ordering your services for their ailing parents.

Owners also need to devote time to talking to wholesalers. While it’s possible to contract through grocery stores, it makes more financial sense to go through a wholesaler because their markup is far less drastic. However, this step will require establishing a good reputation for yourself among the people in the business, which will take both time and effort.

How and when to build a team

If you’re just getting started, it may be better to go it alone at the beginning. Once you start exceeding your monthly goals, consider hiring additional drivers or an administrative person to coordinate contracts, billing, and scheduling.

Useful Links

Industry opportunities.

• Start a Grocery Shopping & Delivery Service Business

Real World Examples

• Delivice Ann Arbor, MI
• Instacart Detroit MI

Further Reading

• Dumpling: Start your grocery delivery service business

Have a Question? Leave a Comment!

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Formulating a Business Plan For Grocery Delivery Startup

Who should read this blog.

So, you have been thinking about starting an online Grocery Delivery service. Welcome to the dreamers of today, who will become successful startups tomorrow! The first task you must accomplish is to put together a detailed Business Plan For Grocery Delivery Startup. Well, you are in the right place at the right time!

This blog is meant for all those intrepid, would-be business people who wish to participate in the lucrative online Grocery Delivery market. Here you will get a proven framework to follow to conveniently put together the ideal business plan. 

The devil lies in the details… 

What purpose does a formal business plan serves, could well be the first thought in your mind, and logically so! Well, a Business plan for your Grocery Delivery business addresses two important audiences, you (and your core team) and your potential investor. (surely you will require funding!).

 For you, this document will serve as a detailed roadmap, outlining the business objectives, deriving the funding quantum needed, detailing the services you propose to offer & the target market in which you wish to operate. It will then go on to cover the analyses that you need to undertake and the resultant plans- threat control, marketing, pricing, & most importantly the launch program that you draw up.  This all-inclusive document will guide you during the initial period, help you to stick to the decision path, and make mid-course corrections as you progress further into your business.

For the potential investor, the same details in your Business plan will serve as a confidence booster, and enable him to make an informed decision. So, use this template to clearly etch out your Business Plan, and get set to convince them with a picture-perfect pitch! 

Start Framing Business Plan For Grocery Delivery Startup First

The Covid pandemic shows no signs of remission, Omicron being the latest entrant into the fray. In response, the economy, business sentiments, and as a direct impact, the bourses are displaying yo-yo-like characteristics. Obviously, the investor community is split into two groups. Those who currently wish to lie low and live to fight another day, and the others, who see the lower entry costs as an opportunity. You need to locate your white knight from the latter group.

Only the best-prepared startups will succeed in this tricky scenario, and hence, you will need a well-structured Business Plan For Grocery Delivery Startup to get underway in your online Grocery Delivery business.

 Let us now study and understand the components of this plan one by one. Read on… 

1. The VMV troika 

To start formulating your Business Plan For Grocery Delivery Startup, three statements that are important to articulate with care and thought are:

• The Vision Statement encapsulates your dream- Where do I wish my business to be in the next 5 to 7 years? While it should be aspirational, it should also be simple enough to connect with the lowest common denominator in your organization.
• The Mission Statement tackles the all-important implementation task- How do I find the Holy Grail, that is my vision? This needs to capture the steps of your deployment of resources to arrive at the vision destination.
• The Value Statement- a public declaration of the company’s core values & beliefs that form a common thread running through your operations,  ensuring that you are recognized as occupying a position that is unique- far apart from the other players in the marketplace. 

2. Find What Drives You

Having dealt with the three pillars – VMV, which partly answers the ultimate question, what’s in it for you and your key stakeholders? You need to put down in black & white, the precise list of your Online Grocery Delivery business’ time-bound aims and milestone aspirations. Please, ensure realism! Remember, the shadow of the doubting, all-important investor lurks!

Related read: Complete Curated Guide To Grocery Delivery App Development

3. Name your brand

With the focus on business objectives, do not lose sight of the baptism ceremony! Selecting a catchy name for your company,  that’s easy on the tongue, and passing domain search is your next challenge!

Deciding whether your enterprise will be a Proprietorship, Partnership, Limited liability company, Private limited entity, or a Publicly listed firm is the other task you will need to contend with.

Both of these nomenclatures will prove to be mission-critical when you finally face off with the Registrar of Companies for obtaining your license for operations. 

4. Make your inventory list

You need to make an inventory of the people/properties that will be key to your Grocery Delivery business. Listing them beforehand will prevent last-minute hurried preparations.

Possible candidates on the list are:

Company website/s, grocery vendor listings, farm co-operatives, neighborhood driver pools. statutory advisors (tax, finance, legal), marketing/communication consultants, real-estate brokers (office-space), interior designers, office equipment suppliers, janitoring & catering services, recruitment firms, app design & development partners, and above all your friendly neighborhood go-to “Guy” for all reasons for seasons! 

5. Clearly state the funds available

Much prior to going fund hunting, it’s essential that you upfront your own credentials. Your current fund position, i.e. your ‘nest egg’ is important for your potential investor to judge your seriousness. After all, he should be convinced that you are not a bounty hunter, but a serious contender.  A succinct statement of investable funds (own & obtained), initial equity raised (and stock diluted) in an easy to comprehend format is what is needed from you.

6. Calculate your fund requirement

You want your investor to say, Bingo! I will buy into this online grocery delivery construct. So, you will need to prepare the investors’ “document of interest” – a make-or-break mini-Business Plan For Grocery Delivery Startup!

Coming to your aid will be a simple Excel format detailing projected startup & ongoing expenses as the top line, the funds you have (derived from the previous exercise)  as the middle line, and the resultant monetary gap as the bottom line. This simple format works- believe AllRide!

Related read: Complete Grocery App Development Cost Estimation You All Need

7. List your differentiated services 

Now it’s time for creativity! What will make your enterprise stand out?  You have to think through this carefully, (post a competition scan & extensive research) and list the bagful of differentiated categories , innovative services, and technology features that will adorn your Grocery Delivery Startup offering. This can prove to be a decisive competitive edge- so invest time, creativity, & resources into this! 

8. Design your App with care   

Now’s the time when you get up close and personal! This is where you engage with the trio of your most crucial stakeholders- the customers, the merchants, and the delivery drivers! The public appearance of your App! The seamlessness and ease of the key UXs hold the key to your Grocery Delivery Startup service/app. The success/failure of this hinges on the fundamental process algorithm you design, and the externality-the ‘face’ (UIs) crafted by your grocery delivery app development partner! 

9. Formulate the threat management plan

Being sensitive to the target audience, understanding & empathizing with the merchants’, drivers’ & customers’ possible points of friction, anticipating competitive tactics, yields an effective & comprehensive threat mitigation plan. This makes it possible to incorporate (in advance) features (unique & tough to copy) in both your Grocery Delivery startup Service offering and the app that you develop. Obviously, this deserves to be highlighted in your Business Plan. 

How to initiate a robust marketing plan 

Your Business Plan For Grocery Delivery Startup needs to encompass:

• Brand growth/engagement/loyalty tactics.
• Boosting trial & repeat purchase
• Ensuring app downloads/installs & non-deletion.
• Enabling customer/merchant stickiness & driver retention.
• Driving positive word of mouth

1. Pre-launch imperatives

Nearing the launch’s deadline, it’s time for you to display your promotional skills , and the hero is your app!

Your Business Plan should highlight how you will: 

• Launch the app on App Store, Google Play, SlideME, Amazon Appstore, 1Mobile Market, GetJar, Samsung Galaxy Apps, Mobile9, Opera Mobile Store, Mobango, F-droid et al with the necessary decibel levels.
• Decide keywords, choose permutations & combinations to ensure high ASOs, leading to high downloads.
• Mount an email campaign to interest potential users.
• Declare inaugural early bird incentives for the key stakeholders- merchants, delivery drivers & customers to enroll.
• Use the reach & credibility of PR and traditional media to gather extensive teaser pre-launch coverage. 
• Innovatively address the merchant and delivery driver communities, removing the concerns associated with current players. 

2. Post-launch initiatives

Reinforce the previous (above) efforts, with the app remaining the focus by: 

• Running offer-oriented promos driving app installation on Facebook, Twitter, Minds, *diaspora, Mastodon, Gab, Friendica, Hubzilla, Aether, LBRY, KARMA, Signal, etc. 
• Put banner ads on your/associates website/s.
• Supporting subject matter experts/online opinion leaders to run Influencer Marketing programs.
• Rewarding time spent on your content, by leveraging Native Advertising.
• Disrupting the market’s status- quo, by giving value before initiating sale/trial – using the “Give it up for free” formula.

Related read: 11 Wow-Some Tips To Start An Online Grocery Store Business

What pricing strategy do you need to follow?

As a new player in the Grocery Delivery business, the quicker you realize that pricing and its COMMUNICATION is extremely important in ensuring your business’ longevity! So, in order to become the next Instacart, you need to be crystal clear in your pricing strategy.

Your Business Plan For Grocery Delivery Startup must indicate the nuances of normal pricing, loyalty-linked upgrades, promotions, express services, special offers, & discount rules.

The key is the simplicity of communication. Remember, neither your merchants/drivers ( normally stressed) nor your customers (being customers) have the time or the patience for difficult calculations.

1. Payouts to merchants, delivery drivers & support staff 

A key component ( and of major interest to the potential investors) of your funding needs & profit projections is the compensation plan for your core & non-core employees/associates.

Clearly delineating the basic (fixed) & incentive (variable) payouts strategy, will contribute towards embellishing your Business Plan.

2. Break-even point analysis 

A systematic depiction of your perception of the future financial position of your Grocery business. A break-even point analysis (used to determine the number of units (volume) or dollars (value) of revenue needed to cover total costs- fixed plus variable in an elegant format will be of help (take your accountant’s help) in lending credibility to your Business Plan. 

3. Projected profit & loss and cash-flow

Since a projected balance sheet may not be possible at this initial stage, the P/L & cash- flow statements in your Business Plan will serve as an authentication for the financial assumptions you have made thus far.

Get Started With Your Grocery Business Plan Right Away

In this blog, we have been able to examine the various facets of a winning online Business Plan For Grocery Delivery Startup. Groceries are a frequently purchased category, and in the present circumstances, people are showing a marked preference for home delivery of the same. Therefore, online Grocery Delivery has become a fast-growing business of late.

There have been many recent startups exploring this exciting space. You need to identify the right platform and right development partner to get ahead in this race. The all-encompassing Grocery Delivery Business Plan template presented here, and an appropriate app is the twin magic solutions within your reach. Contact   AllRide Grocery Delivery experts and get valuable insights and workable solutions for your business. 

Swarnendu De

Swarnendu De is the Co-founder of AllRide Apps . He leads the product, sales, and marketing divisions at AllRide. Swarnendu is also the co-founder of Innofied Solutions , a technology company helping SMEs and Enterprises in digital transformation, product strategy, and development. With more than 15 years of industry experience, Swarnendu has been the author of top technology books, a speaker at numerous events, a mentor to startups, and has more than 10,000 online students. He has helped more than 600 businesses launch their tech products. Connect with Swarnendu on LinkedIn .

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