The food industry is such a sustainable business since this is an essential need for everyone. However, it has changed a lot due to the development of humankind and technology. Besides traditional food businesses such as fast-food chains, steak houses, and restaurants, there is a new type of selling food the meal prep business.
The meal prep companies are born to provide users with nutritious and healthy meals. Because of the significant increase in people caring about their diet or what they eat, they struggle to make them. This is the opportunity for entrepreneurs to start their brand. However, to make themselves outstanding, they need to know customer insight and consider the macro environment and microenvironment.
This article will help you understand all key points to start a successful meal prep business if you are a newbie in this marketplace, or it may contribute to your business plan.
What is a Meal Prep Business?
Meal Prep Business provides customers with healthy and nutritious meal that needs to heat up in the microwave by using the service of meal prep business with diverse options. The meal options can be body build diet, vegetarian, or any combination of food to fit your health condition.
Foodery's customer target is metro citizens and professionals who face a massive challenge: finding the time and suppliers to consistently follow, make, and have a healthy diet while living a busy life.
The customer target of Foodery is metro citizens and professionals who face a massive challenge: finding the time and suppliers to consistently follow, make, and have a healthy diet while living a busy life.
The company displays and publishes all the menus on their website, mentioning the nourishment and description comprehensively the ingredients' origin. Of course, these menus will not be the same all the time; they might change periodically. Customers can subscribe to the plan for one week or one month and choose the delivery day on a Wednesday or Sunday. For example, the meal will come in the containers to preserve at least a few days in the fridge temperature condition.
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Models of Meal Prep Business
Storable Food Delivery
This type of prep meal is for people who do not like waiting for food experience every day. They are more likely to buy food such as pickles, sauce, dried food, etc., which can be kept for a longer time than fresh products. Its advantage is that users can have a meal instantly in the day whenever they wish to but not wait for the delivery since there is always food at their house. And the biggest drawback is that most of the food is canned or dried and might not be organic.
The model of this type of prep meal business can be explained as 3 phases. The ingredients will then be sent to them and kept for 1 week or more than 1 week on a specific day on that the customers chose. When customers cook the meal, they can follow the recipe of the chef online.
Most of the revenue will come from selling products. Moreover, this prep meal business is web-based commerce; the owners can make more money from banner ads, featured lists, and affiliates on the site.
An online meal-kit delivery business model will attract people who want to customize their meal** and enjoy the convenience of achieving it, not spending significant time preparing.
In this model, all meals are measured to fit the purposes of customers. The menu will be public and include nutritional ingredients; then, customers can choose about what they want to have and the number of meals. The provider delivers the right proportion of fresh ingredients and recipes for each at the customers' doorstep.
The primary source of profit will be the cost of each meal-kit purchased; it can be the cost for each meal or due to the subscription period. Providers can expand the source by providing kitchen equipment such as oven, mixer, etc. for rent or on sale that adequate customers' need. Like the previous model, companies can also gain money from placing ads on websites.
Niched Based Food Delivery Service
People tend to concern more about their health and understand that there are connections between meals and physical strength. This makes the niches in meal prep business, which mainly offer meals that are good for health or fit specific health conditions, grow remarkably. Some of them are meals for diabetics, the elderly, high blood pressure, etc.
The owner of the meal prep e-commerce, you will list the chefs on your site creating options. The customers will make their own decision about the meal they want, the chef, and time for delivery or pick-up.
This business model might differ from others, the chef will be the person who cooks, food will be storable, and customers need to microwave it to use. The chef will strictly ensure the specifications that customers require.
The niched service just inherits the fundamentals from the bigger picture. Here is the revenue; it comes from each meal sold and extra part from placing ads on your prep meal business.
4 Things to Consider Before Starting a Meal Prep Business
Understanding customer insight is such an essential and initial part of a successful business. Once you define your target audience and understand the value that they are looking for, you can easily reach them and spread the message about your meal prep business. To know more about buyer persona, such tools like Facebook or Google Analytics would be great to try. Moreover, buyer persona can remind customers to put customers’ need and want above of your own.
You will distinguish customers by name, demographic details, cares, and behavioral traits. You will realize their goals, pain points, and buying patterns.
Because different segmentations of people have their reason to purchase your products, you might need to diversify the buyer persona. Of course, it is impossible to know every individual need. But you can categorize and create a buyer persona to represent for a group who share the same demand then make it the base to treat your customer.
Let's take the first step with the basic definition. A go-to-market strategy is a calculated action plan that lists the critical steps to succeed in a new market or a new customer. It can help launch new products, re-launch your company or brand, and even introduce an existing product to a new market.
And in the case of meal prep business, your business needs to make customers understand the new way to have a meal, not just traditional and manual like the old time. Furthermore, your go-to-market strategy needs to be comprehensive and flexible enough to become valuable and ready to update base on customer feedback.
Thinking about license and law-related conditions is the most important before running a meal prep business or even any type of business. Since you don't want to get in trouble when running your business with the local authorities, it will be better for business to get registered officially. You can reach the local food department and internal revenue service department to know the required documents.
The last important factor to consider when starting a meal prep business is planning the logistics for both kitchens' internal or external activities.
The Foodery's meal prep operation shows their success in managing as a central kitchen, where all meals are prepared by their most dedicated chefs and gathering in a sort of assembly-line.
The company commits the quality of ingredients, organic, local, or seasonal only. Meats are grass-fed, antibiotic, and hormone-free, and everything is made without artificial flavors and sweeteners, GMOs, and trans fats.
We might ask how does The Foodery send those meals to customers on time and maintain the best quality of the food. Turn out, logistics can be essential and complicated.
5 Steps to Start a Meal Prep Business
Step 1: Create a Business Plan
Before you might participate in starting your meal prep business, a firm business plan should be considered. The business plan will point out the budget to turn business to working status and on the ground. A further look at the business plan may observe the number of clients needed to be profitable. The plan should also discuss expenses, revenues, investments, and profits.
Data reported monthly in the plan may help you secure potential funding and draw the details on what would happen if the business becomes successful for any employees, partners, and investors. Especially in the food industry, it is crucial to balance the money flow to gain profit.
Step 2: Handle the Paper Work (License, Permit, Insurance)
Although this step seems to be not that exciting, it is essential. It guarantees that you have all the proper licenses, permits, and insurance forms, ensuring that your business is legal. Your venue, business type, and business model will affect what you need to sign up. You can refer to the process via the local authorities' site or business forum in your area.
It might be different between the business requirements you must meet in different areas, so you should check with the local chamber of commerce. And because you are processing and distributing food, there is a significant amount of hoops to go through. Some specific documents you may obtain while running meal prep business can be listed, such as a sales privilege license, food handler's license, catering license, health department permits, or zoning permits.
If your business hires employees, there are some commitments by paper and political processes that need to be done to managing the using labor and protect the right between 2 sides. For example, you should take time and consider the type of business insurance your meal prep business may need. In case of the problems exploding, related to labor you should have unemployment, workers' compensation, or disability insurance. Or beyond that the worst scenario that customers have health problems because of using your food, you might be covered by the right type of insurance. To be more secure, you can consult with the lawyer to see what you need and ensure your right.
Step 3: Manage Supplies
You will need many supplies when running a meal prep business. The constant influx you need can be divided into three categories: fresh food, packaging, and delivery materials. Because the reputation of a meal prep business or any business in the food industry mainly depends on the right ingredients, you have to balance their cost and ensure quality. Massive purchase of food from wholesale suppliers can be a way to reduce the price. But you need to watch out the stock; you will be in trouble if overstocking that you buy more than you can sell, then the ingredients are no longer fresh.
After you got all the supplies, you might want to consider using an inventory management app to track your incoming and outgoing supplies. That way, you will actively control and never run out the ingredients to make a good dish.
Step 4: Hire People
As your business keeps growing and extending, you may find that you will need external help. In the meal prep business, you might need employees to observe during meal preparation, prepare the ingredients, and clean the workstations and kitchen area before and after your products are made. Depending on the size, you will need a couple of employees to cover the workload or several people in different departments to run the business.
Among the necessary labor, you need to make sure you choose the right deliver guy and a good chef since they can be the person who makes or breaks the business.
Step 5: Market Your Business
This step is an important part when you starting a meal prep business, which is brand cognition from the crowd. Without customers, the business will go down. It takes time to develop a good marketing strategy. However, you don't need to burn money to promote your business, some marketing methods are totally free such as:
- Offering cooking demonstrations at community and senior centers
- Creating a business website
- Passing out business cards and flyers
- Creating social media pages and sharing announcements, product details, promotions, etc.
If you have a large budget for marketing, you can also take a look at marketing avenues that may cost a bit more, like:
- Advertising in the local newspaper
- Catering community meetings and events
- Television or radio ads
- Using Google AdWords to post advertisements
However, you should remember to always set the limit for your marketing expenditure and adjust them based on the cycle profit. Don't get too rushed in spending money on marketing; failure in financial management can end up your business.
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In conclusion, we hope that you understand and see that the potential of this type of business is. Moreover, this article may help you to better research before you start a meal prep business, which step or element needs to be prioritized or focused so that you can run your business smoothly and catch no trouble.