How To Start A Meal Prep Delivery Business

You've stumbled upon the idea to build a meal prep delivery business and now you're ready to take the next steps.

There's a lot to think about when building a business, so we put together a guide on how to get started, launch, grow and run your meal prep delivery business.

We also provide you with real-life case studies and examples of founders running successful meal prep delivery business businesses (and how much💰 they're making today).

💡 Idea

What is the meal prep delivery business all about?

Meal prep delivery businesses typically prepare home cooked meals for their customers and deliver directly to their home.

There are many different approaches you can take within this industry, however, the most popular type of meal delivery is one that is:

  • Healthy: Geared towards a specific diet or lifestyle
  • Low Maintenance: Quick and easy to cook once delivered
  • Tasty: Quality ingredients sourced and tastes like a home-cooked meal.
  • Custom-made: Ability to tailor to customers needs based on their diet preferences, allergies, etc (ie. gluten free, vegetarian)

Is the meal prep delivery business for you?

There are a lot of different components to consider when starting a meal prep business.

Let's look at the pros and cons of starting your own meal prep business

Pros:

  • Flexibility One of the biggest advantages of starting a meal prep business is that you can either offer part-time or full-time services. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own. Or, if you prefer to manage the books and instead delegate the kitchen work to someone else, you can build and manage your own team to do so.
  • Ability to start your business from home: It's not necessary to have an office space to get your business started! You can do everything from the comfort of your own home, at least in the beginning!
  • Rewarding work: If you're someone that truly enjoys the art of food + making peoples lives easier, starting a meal prep business can be really fun and rewarding.

Cons:

  • Food prep + delivery logistics can be challenging: If you plan to source local, fresh, organic ingredients + meat options, there is a large planning process involved with delivering meals in a timely and efficient manner. Additionally, it's your responsibility that ingredients do not go bad and arrive in perfect shape (we'll get into this more in the guide below).
  • High overhead costs: You will need to anticipate high overhead costs in order to acquire the right supplies + food to get your meal service off the ground.
  • Crowded space: There is a lot of competition when it comes to meal prep delivery services, so it's important that you spend a good amount of time analyzing the market and demand in your area.
  • Motivation: You may find yourself needing delivery drivers + chefs in the kitchen. It's important that you are able to motivate and incentivize your team properly.

Players

Big Players

Small Players (the opportunity)

Market Opportunity

According to Statista, fresh meal delivery kits are on a positive growth trajectory in the U.S.

In 2017, the industry was valued at 4.65B with a 300% growth over the previous year. By 2022, the market is expected to more than double, reaching 11.6 billion dollars.

article Statista, 2017

Search Interest

Let's take a look at the search trends for meal prep delivery business over the last year:

Target Market

It's important to understand who is buying this service and why it's so wildly popular for that customer.

It's more simple than you may think.

Really, it comes down to people being busy and not having time to go to the grocery store.

Who are your customers?

  1. College students/young adults: Days/nights are fast paced for this demographic and they tend to yearn for a home-cooked meal, without actually having to cook
  2. Parents: Mom's & Dad's are doing the best they can to get through the day. Often times, the last thing they want (or can do) is to get to the grocery store and cook a nutritious meal for their family.
  3. Workers Whether it's bringing a lunch to work or making dinner at the end of the day, the last thing a working professional wants is to prepare/cook a meal.

Andy Sartori, founder of MealPro states their customer demographic in one sentence:

Our typical customer is a busy, health-conscious individual who has no time to shop, prep, portion and cook meals to support their nutrition objectives, hence our call-out “Eat with Purpose”.

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Andy Sartori, on starting MealPro ($50,000 revenue/mo) full story

🎬 How To Get Your Meal Prep Delivery Business Started

Write a Business Plan

Writing a business plan from the start is critical for the success of your meal prep delivery business.

Why?

Because this allows you to roadmap exactly what you do, what your overall structure will look like, and where you want to be in the future.

For many entrepreneurs, writing out the business plan helps validate their idea and decide whether or not they should move forward with starting the business.

You may want to consider expanding upon these sections in your business plan:

  • Executive Summary: Brief outline of your product, the market, and growth opportunities
  • Overviews and Objectives: Overview of your business, target customers, and what you need to run your business
  • Products and Services: Specifics on the products and services your business will provide
  • Market Opportunities: Analysis of customer demographics, buyer habits and if your product is in demand
  • Marketing: Outline of your marketing plan and how you plan to differentiate yourself from other customers
  • Competitive analysis: Analysis of your competition and the strengths and weaknesses therein
  • Operations: Hierarchal structure of the company and what it will take to run the business on the day-to-day
  • Leadership Team: Detailing roles and responsibilities of each manager based on their specific skill-set
  • Financial Analysis Understanding of all expenses, operating budgets, and projections for the future.

When it comes to setting up your business, you may find yourself in a place where you have to make some financial and legal decisions.

The first thing you'll want to decide on is whether you want to be an LLC, S-Corp, or C-Corp.

These three options are found to be the most common when starting a small business, and all serve to protect your personal assets and also provide you with certain tax benefits.

  • LLC: All income and expenses from the business are reported on the LLC personal income tax return.
  • S corp: Owners pay themselves salaries + receive dividends from profits.
  • C Corp: C Corps are separately taxable entities that file a corporate tax return (Form 1120). No income tax is paid at the corporate level and any tax due is paid at the owners individual expense.

Depending on where you're conducting business, you'll also want to consider securing the proper permits, licenses and liability insurance.

Learn more about securing the right permits and licenses ➜

Licenses & Permits

When starting a meal prep service, it's important to identify the type of space that you will be cooking meals + preparing deliveries.

MVP stage

Before launch, you may want to consider preparing/cooking the meals in your own kitchen (or a friends) to test different recipes, meal options, prep process so that you can ensure everything is in place once you launch.

In this stage, as long as you are not selling products- the experimental phase can be done in the comfort of your own home without a heal department to approve the kitchen.

Health Department Approval

Once you're ready to launch the business, there are a few boxes to check in order to ensure you are health & safety approved.

The most common question is whether you can operate a meal prep business from home or if you need to rent a kitchen facility.

As long as you are FDA approved, you have the ability to operate out of your own kitchen. However, you may need proper equipment in order to make that happen, and a commercial kitchen facility may be better suited for you.

For a full list of FDA requirements to get your food business set up, read more ➡️ here.

Michael Martinez, founder of Eat Clean LLC explains his experience renting a commercial facility:

The business was started with three of my long-time friends and just $3,000 (which was all that I had in my savings account at the time). That money was used for kitchen hours in a commercial kitchen, food and our original website.

By our third month, we were delivering to over 100 customers each week and we then had to lease a space and build our own kitchen. Initially, our customer base was family, friends, local gyms, and sports teams.

The space we leased was a pizza restaurant that we had to tear down and build it to our requirements. Later on, we then leased the two locations next to us for additional space to prepare our meals.

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Michael Martinez, on starting Eat Clean LLC ($300,000 revenue/mo) full story

Startup Costs

If you are planning to start a meal prep delivery business, the costs are relatively low. This of course, depends on if you decide to start the business on your own or bring on a big team at first.

We’ve outlined two common scenarios for “pre-opening” costs of a meal prep delivery business and outline the costs you should expect for each:

  • The estimated minimum starting cost = $4,850
  • The estimated maximum starting cost = $55,500
Startup ExpensesThese numbers are based off the average expenses incurred when starting a meal prep delivery business. Min Startup CostsDefined as an meal prep delivery business you have started and plan to execute on your own. You’re able to work from home with minimal costs. Max Startup CostsDefined as an meal prep delivery business you have started with one other full-time planner. You decided to rent out an office space to set up the business.
Licenses and Business FormationThis refers to setting up your business license and establishing any legal contracts. $250 $1,000
PayrollThis number depends on if you decide to pay yourself a salary up front and the amount of employees you hire. The average salary for a full-time meal prep delivery business individual is $0 $4,000
Equipment and TechnologyThis includes (but is not limited to) any expenses such as: laptops, office supplies and technology platforms $500 $5,000
Advertising/PromotionThis includes (but not limited to): paid ads, public relations, networking events etc. $200 $2,000
Website and Email HostingCosts to host website, domain names and email $100 $300
Website Design (Outsourced)Hiring an outside contractor to assist with design elements of your website $0 $5,000
RentThis refers to the office space you decide to work in. Depending on the cost of living, this number could vary. $0 $2,500
Liability InsuranceDepending on which state you live in, the costs and regulations vary for liability insurance. You can learn more here. $500 $2,000
InventoryThis includes all upfront inventory you will need in order to launch. Be sure to compare prices of wholesalers to ensure you're getting the best deal and margins remain high. $1,000 $8,000
Kitchen AppliancesThis includes but is not limited to: pots, pans, containers, oven/stove, fridge, freezer. You may have the option to lease or purchase these items, in which case the cost can vary. $2,000 $25,000
Cleaning SuppliesTo get started, you may want to consider getting basic cleaning supplies. Note that you may not need to buy all the tools and supplies at first. You can consider purchasing in bulk down the road. $300 $700
Total Starting Costs $4,850 (min) $55,500 (max)

Raising Money

Since the startup costs to start meal prep delivery business range between $4,850 - $55,500, there are ways you can raise money to cover these costs.

Here are a few ways you can secure additional funding:

Starting Cost Example

Overall our startup costs were around $25,000.

We bought a handful of pots, pans, plates, the cheapest gas stove/oven combo we could get, and a lot of fridges.

Our original business was financed using Peters's credit cards. When we expanded into our own retail store, we received a $50,000 loan that was co-signed by Peters father.

That $50,000 was mostly spent on the first 6 months rent, a walk in fridge, a vent hood, and a bunch of tables and racks. We accepted any hand-me-down that we could get. Our friends donated things like old computers (that ran Windows 7), computer chairs, regular chairs, and other general office supplies.

The $50,000 loan we received from Peters's father was to be paid back in 2 years. This was probably the hardest thing our business had to endure. Because of this, we bartered a lot with our clients for their services including tax preparation, food, building maintenance, and labor. Also, Peter and I did not draw a paycheck during these 2 years.

This number has expanded to around $500,000 over the last few years with the growth of the company.

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TJ Clark, on starting Healthy Chew ($60,000 revenue/mo) full story

🚀 How To Launch Your Meal Prep Delivery Business

How Do Meal Prep Delivery Businesses Make Money

Typically, the chef(s) will decide a list of menu options and list nutritional ingredients used along with pictures on the website.

The customer is then able to select certain meals that fit their preferences and add the number of people in the household that will receive meals.

Business Models

There are a few different business models that have known to be successful in this space.

  1. Per meal kit delivered. This price depends on number of people eating and number of recipes per week One week of meals is typically delivered at any given time to ensure quality.
  2. Subscription based model. For the customer that wants meals delivered weekly. The cost per meal is typically less than it would be in the "per kit" model.

What Should I Charge For My Meal Delivery Service?

You may want to consider having different price tiers depending on the amount of meals ordered per week.

Additionally, you'll want to charge for shipping (or at least include shipping costs in the order).

Here's an example of what is common to charge in this space for standard meals:

article Freshly Pricing

However, depending on your niche, you may have the ability to sell at a higher cost (depending on the product).

For example, Cameron Manesh, founder of Cameron's Seafood sells Maryland Crabs and delivers them to your doorstep.

Our average sale is $165 with a profit margin of 15-35%. Our competitors charge for shipping but customers would rather you bake it into the price then charge them a fee, so that's the model we use.

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Shipping and Packaging Tips

The way you package and distribute your meals is one of the most important pieces - this is how the food stays fresh, gets to your customer in a timely manner, and is the first impression they have.

Additionally, this can be the most expensive cost - so it's critical that you find the right process at the right cost.

Here are some tips from Cameron Manesh, founder of Cameron's Seafood

Packaging / Gel Packs

Shipping heavy perishables is about the hardest and most expensive thing. You have to send heavy products in 1-2 days while keeping the temperature between 34-41 degrees during the summer when heat can breach 100 degrees.

Our gel packs kept arriving melted so we kept adding gel packs (industry standard is ⅓ gel pack-to-product-ratio but we were using a 50% ratio and still having problems.

I contacted Blue Apron and Hello Fresh and within 24 hours I found out they buy pre-frozen gel packs - problem solved!

Boxes / Insulated Coolers

When Amazon ships me multiple products they shove them into the smallest possible spaces because "Fedex and UPS charge you the higher of the package weight or dimensional weight (DIM) of the box. Dim weight is calculated by LxWxH / 139."

After looking at our first 100 shipments I realized we were getting DIM weighted on 85% of packages meaning our boxes were too large. It took me 3 months to find the perfect supplier and figure out how to store them or pick them up within one hour. My family has a large house with 4-car garage. I’m the oldest of 6 kids and we have all moved out so the space was wide open.

I did try non-EPF (styrofoam) coolers that are more "green" but they were much more expensive and in startup mode you need to cut expenses. We sent test packages to FedEx who tested them for free and we deduced that EPF were most coolant efficient and cost effective. I figured since we weren’t doing weekly subscriptions it wouldn’t be a problem.

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Cameron Manesh, on starting Cameron's Seafood ($300,000 revenue/mo) full story

Build A Website

Building a website is imperative when launching your business, and with the right tools in place, this can be a simple task to check off the list (without having to hire someone).

  1. Pick a domain name that's easy to remember and easy to type
  2. Choose a Web Hosting Plan (ie. Shopify, Squarespace)
  3. Make sure you choose the right theme and design
  4. Implement the proper page structure (ie. about page, contact page, pricing etc)

To learn more about how to build a stellar website with little stress, we give you all the details on this step-by-step guide.

Mary Drennen, founder of Nourish Foods Co. talks about the process of launching their website and the platforms they use:

Our latest website was launched late 2017. The front is Squarespace and was designed it in-house. The process was fairly easy and low cost.

While Squarespace is our website host, we implemented Send Bottles for our backend checkout. Send Bottles is a fairly new startup, that allows us to use text messaging to communicate with our clients. More importantly, it allows for a better customer experience. They can choose their weekly meals based off a text message and also skip if they need to.

We ended up doing a ‘soft launch’ of this current website last fall to give some select clients an opportunity to beta test the site and provide valuable feedback. We were careful to migrate the existing clients over slowly as to not overwhelm the system or lose any clients.

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Mary Drennen, on starting Nourish Foods Co. ($180,000 revenue/mo) full story

Plan A Strategic Launch

There are various different ways you can launch your meal prep delivery business successfully.

Here are a few different strategies to get customers excited about your meal prep delivery business.

  • Build hype with a landing page: you can effectively do this through waiting lists, discounts, countdown timer etc
  • Create a teaser video: even just a 30 second video is a great way to exposure for your meal prep delivery business, and possibly even go viral
  • Reach out to influencers: The right influencer for your product has the ability to reach your audience with just one post, and because of their loyal following, this could lead to a big return for you.
  • Get Press: Whether you plan a PR stunt or get exposure through a popular news outlet, this is a great way to attract initial customers
  • Launch on popular sites: A great way to get buzz about your meal prep delivery business is to submit your launch to popular startup sites.

Here are a few popular sites to launch on:

Learn more about how to launch your business successfully ➜ here

Cameron Manesh, founder of Cameron's Seafood was able to land in the New York Times just by sending a cold email:

I started calling all the large newspapers pitching their food critics, their startup business writers and even pitched the angle of immigrant-run companies.

My first hit was with the New York Times. "I googled “New York Times Food" and learned Florence Fabricant was their critic. I then googled “Florence Fabricant email” and asked her to sample our food.”

I read she is a stern critic so we were worried but to our surprise she loved the food and when the article came out we did close to $40,000 in sales in three days and could barely handle the volume. That was an intense week but made it happen.

To read the exact email we sent to get in the NY Times, check out the full story ➡️ here

To contact the press, I recommend:

  • Targeting macro press (i.e. USA Today).
  • Google indirect competitors or vertical companies (ie. Hello Fresh) to see who wrote their articles
  • Google the writers contact info and send an email introducing company
  • Offer samples, be personal, discuss your food, follow up!
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Cameron Manesh, on starting Cameron's Seafood ($300,000 revenue/mo) full story

📈 How To Grow Your Meal Prep Delivery Business

Grow Your Email List

The more engaged list of emails, the more engaged customers, which ultimately leads to more sales.

One of the best ways to start growing your list is by providing your customer with something free (or discounted) in return.

This could also be anything from:

  • Ebook
  • Fascinating case study
  • Video series
  • Free week of the product
  • Discount on the product

Learn more about how to grow your email list and improve email marketing ➜ here.

Dylan Jacob, founder of Brumate states their email collection tactic that is proven to work:

We use Spin-a-Sale for this (you spin a wheel for a discount code in exchange for subscribing to our email list). This has been the best email-collecting tool we have found because the customer truly feels like they won a prize rather than just a coupon code.

Improve Your Email Marketing

Different types of emails

Here are the most common types of email campaigns you can send to your customers and their benefits:

  • Welcome emails - the perfect way to provide information from the start with a clear CTA. Make sure to tell your customer everything they need to know about your product or service.
  • Newsletters - a great way to give customers updates or send out your latest content
  • Product launch emails - the quickest (and easiest) way to increase sales is by selling to current customers. Make sure they're the first on the list to know about your new product
  • Promotional emails - promote discounts, deals coupons etc. Try and make this feel exclusive and for a limited time only
  • Abandoned cart emails - give your customers a reason to complete their purchase!

Here's a great resource for finding curated email designs, for all types of email campaigns!

Newsletter Example - One Life Meals

We have a lot of content to share and it is very well received. Most clients need to see your brand a few times before they purchase, and email is great for that. Email is also an effective reminder for past clients to order again.

We have close to 5000 subscribers and we aim for 2 emails per month. Most of our subscriptions came through the website.

So far we have been focusing on practical life hacks and tips on how to stay focused and disciplined. Many of our subscribers are past clients that took a break.

Our open rates are good, we’re averaging 24% - 53%, much higher than the 10% industry average. We need to work on our click rates which are at around 1.2%.

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Here's a look at one of our email newsletters. Here's another one.

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Andrei Calinescu, on starting One Life Meals ($130,000 revenue/mo) full story

Social Media Advertising is one of the leading ways to get the word out when it comes to meal prep delivery business.

There are various different Social Media platforms available to you. Some may be more critical for your marketing efforts than others, however, it's important to have an understanding of what's out there and available to you.

Let's talk about a few of the main platforms and what makes them unique:

  • Facebook Advertising - more than 2 billion monthly users. Facebook is the best for lead generation + capturing email addresses for e-commerce businesses.
  • Instagram Advertising - approximately 500 million monthly users and has a higher audience engagement rate than any other platform. Instagram ads are best for linking to a product page or landing page and reaches the 18-29 age group most effectively.
  • Twitter Advertising- Small businesses typically use twitter ads to drive brand awareness, but the platform is meant more for organic engagement (and is not as heavily used for paid advertising)
  • Pinterest Advertising - 175 million monthly users and most effectively reaches the female audience. Pinterest is great for promoting products without "promoted". The promoted pins have a way of blending right in.
  • LinkedIn Advertising - 227 million monthly users and is geared towards the B2B market and generates the highest quality leads. Great platform for recruiters, high-end products and services that will help businesses

It's important to first define your goal/objective so that you don't waste time and money into the wrong platform:

Here are some different questions to ask yourself as it relates to your goals:

  • Do I want to simply drive brand awareness?
  • Do I want to drive users to my website to gather information?
  • Do I want to increase sales and get my customer to take action?

From there, choose the platform that targets your audience best and start experimenting!

Learn more about social media advertising ➜ here.

Facebook Ads In Action

We recently started running Facebook ads and they are doing well. There is much room for improvement here, especially now with our new website which converts much better.

We are running 2 ads with a total budget of $46 per day. We are getting 66 to 96 clicks per day at $0.48 to $0.69 per click.

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Andrei Calinescu, on starting One Life Meals ($130,000 revenue/mo) full story

Improve your SEO

SEO is not just about driving traffic to your site, it's about driving the RIGHT traffic to your site, and ultimately, converting leads into customers.

One of the most important aspects of SEO is understanding what your customers are searching for, otherwise known as "keyword research."

Here are some tools that can help you choose the right keywords for your meal prep delivery business.

Learn more about the fundamentals of SEO ➜ here

Provide great customer service

Providing exceptional care and creating relationships with clients is a great way to build your reputation and retain customers.

Whether you are an online business or a physical business, it's highly important to communicate with customers and make them feel like they are the priority.

Just remember: customer service represents your brand, values, vision and YOU as a person.

Customer Service Is Key

First and foremost, I offer exquisitely personal customer service. I answer the phone 99% of the time and return calls immediately when I have missed one. I respond via email and text, generally within the hour of a customer contacting me, usually much sooner. I do my best to accommodate human errors and to make each customer’s experience as seamless and nurturing as possible.

Want to add something to an order after the ordering deadline? Usually no problem! Have a problem with a product or something missing from a delivery? Refunded or credited immediately! Have a last-minute appointment and won’t be home for the delivery? We figure something out!

I know how much I appreciate being accommodated as a customer and I try my best to offer my customers that same accommodation.

After all, meal delivery and other luxury services are designed to ease someone’s life not make it more complicated!

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Lyla Wolfenstein, on starting Full Belly Fare ($14,000 revenue/mo) full story

🏃 How To Run With Your Meal Prep Delivery Business

How To Retain Customers

Retaining customers is one of the most effective ways to grow your meal prep delivery business.

Often times, it's easy to find yourself focusing on generating new customers, vs retaining your current ones.

Look at it this way - you are 60-70% more likely to sell a new product to an existing customer, than you are a new customer.

That's not to say that finding new customers and revenue streams is not important, however, the easiest (and most inexpensive) source of new revenue is right there in front of you.

Here are some ways you can retain customers for your meal prep delivery business:

  • Responding to comments on social media
  • Send discounts (or freebies) to loyal customers
  • Provide valuable content, for free
  • Write hand written thank you notes
  • Provide awesome customer service and build relationships with customers

To find out more tips and tricks on retaining customers, check out this article ➜ here

Diversify Your Product Line

Adding new products to your business is a great way to expand into new markets and grow your business.

It's important to note that adding new products and diversifying may not be in the cards for you right this moment, and that's okay. You can always consider it down the road.

Here are some reasons you may want to considering adding/diversifying your product

  • Meeting the needs of your customers
  • Establish yourself as a top provider in your industry and stay ahead of the game with competition
  • Resistance to downturns/trends fading
  • Create new revenue streams

For example, Healthy Chew plans to expand and create new revenue streams:

The longer term goal for Healthy Chew is to expand into national shipping, as we currently only serve our locals. We are also working on a few partnerships with national retailers to have our food sold in grocery stores, as well as a few local deals with smaller grocers.

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TJ Clark, on starting Healthy Chew ($60,000 revenue/mo) full story

Tools to get started:

As a meal prep delivery business, there are some tools and platforms you may want to consider when getting started:

Resources

Websites/Videos

Case Studies

Books

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Starter Story,   Founder of Starter Story

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