How to Start a Meal Prep Business from Scratch

How to start a Meal Prep Business from scratch

Passionate people tend to make good entrepreneurs, and few specializations attract passion the way the food industry does. The trouble with the food industry is that there are few opportunities to express that entrepreneurial spirit: you can open a restaurant, run a food truck, or focus on health and nutrition education. But there’s a new trend that’s spreading really quickly, and requires little resources to start: meal prep businesses. And more specifically, meal prep businesses that offer fully cooked meals delivered straight to consumers’ doorsteps.

For the uninitiated, a meal prep business is one in which complete meals are prepared and delivered or picked up at set schedules. Kind of like ordering a pizza, except with a typically much wider range of options, and often in much greater quantities than one pizza at a time.

The goal of this article is to provide a curious entrepreneur with as much information as we have about what it takes to start a meal prep business. Some of this may or may not seem obvious, depending on where you are in your journey, but we’ve always found it useful to start at the most basic level and work your way up to provide a full picture.

Pro tip: Make sure to bookmark this comprehensive guide so you can keep coming back to it!

• Why is this a good business model?

There are a number of advantages that meal prep businesses offer compared to traditional brick-and-mortar restaurants. Primarily, you don’t need to operate out of a commercial kitchen or lease space; many people can (and do) start these businesses in their homes, switching to larger kitchens when they have the revenue to support it. Even if you do use an external kitchen, you don’t need a dining area . All your customers are sitting comfortably at home waiting for their meals to be delivered for the week (you can see why this is such an attractive offering for people).

That has a couple of benefits—first, you save some overhead on furniture, rent, compliance, and a wait staff. Second, you’re not limited to a certain number of customers—since space isn’t a concern, you don’t even really need to worry about maximum capacity regulations. The growth and scale of your business is unlimited.

On top of that, the business model is built around subscribers rather than one-time customers. Selling a meal subscription plan gives a business recurring revenue that they can count on.

• Challenges to this business model

Now that we’ve talked about the good, we have to talk about the challenges. No business is without its drawbacks. The biggest challenges are logistical in nature. If you’re running a delivery service in addition to pickup locations, you can find yourself struggling to plan out your routes after you hit a certain threshold. Just knowing where to send which order on which day isn’t easy to pull off.

Second, it can be hard to compete with other services other meal prep competitors if they excel at digital customer acquisition. If a competitor has mastered how to sell via social media and search browsers, it can take a while before you start to gain traction. More on this topic later.

However, for the most part, this is an advantageous business to be in. It has far more upside than downside. The initial capital required is low, the risk is limited in scale, and the growth possibilities are seemingly endless.

• Boring Business Stuff Everyone Needs to Do

 

Forming a company

Before you whip up your first meal and start counting dollars, make sure you officially form a company. There are a host of reasons to do this ASAP, before everything else (the most important is making sure you’re protecting yourself and your assets). You can quickly and easily form a company using services like LegalZoom. You need to do this in order to do things like pay taxes, open a bank account, apply for lines of credit or loans, and manage your expenses.

It’ll also protect your personal assets if you need to declare bankruptcy.

• LLC, C-Corp, or Sole proprietorship?

This is a complicated topic,  but it will generally come down to a couple of questions:

• How do you want to be taxed?

Sole proprietorships offer some liability protection, but also have tax advantages. LLCs and C-Corps are subject to additional taxes, but offer other advantages.

• Do you want to offer equity to third parties?

If you’re looking to expand, selling equity is a good way to do it. It’ll help you raise capital to manage expenses and give your business the runway it’ll need to operate. It’s far easier to do this as an LLC or a C-Corp.

• Yes, you have to pay taxes

The way you’re taxed aside, you’re going to be subject to additional taxes you’re not used to if you’ve been a W-2 employee your entire career. You need to plan for this ahead of time, or you’re going to be in for a surprise. (Please keep in mind that federal business tax filings are NOT due on April 15^th: they are due on MARCH 15^th. So don’t sleep on this thinking you have enough time!)

We recommend finding an accounting service that you can trust and following their instructions. You can also find some resources, like this one, from entities like the Small Business Association (PDF).

 

Rules and regulations

Businesses are subject to a variety of regulations they have to follow. One of the most important regulatory bodies is OSHA, which sets rules concerning worker safety. Violations of any of these regulations can carry serious penalties, so it’s better to be safe than sorry. You can read more about OSHA regulations here.

 

Other Business Stuff That Isn’t as Boring

Building a business plan

Nobody is going to take you seriously unless you have a business plan put together. You need an organized method to tell interested parties (investors, loan officers, your family—whoever you need to convince) what your business is and why it’s going to succeed. While this is something of an art form that plenty of people specialize in, there are (luckily) a wide variety of templates available to make it easier for the uninitiated. Many of these are as simple as filling in the blanks.

Take the time to do this, even if you aren’t looking for loans or investors. It will help guide you down the right path and keep you focused on what matters.

 

Applying for a loan

Many meal prep companies self-fund their business because the costs to start are small compared to other types of businesses. But if you are scaling fast and need an infusion of cash, a small business loan could be the way to go. Applying for a loan can be a nerve-wracking process, but it doesn’t have to be. The Small Business Association can help you find a lender that suits your needs. Please remember that you do have to pay this back according to your agreement, and you’ll need to plan for this. You can find the SBA’s lender matching program here.

 

Hiring a team

You’ll need people to help you out. Delivery drivers (if applicable), kitchen staff, administrators, and someone to help you manage the backend of things. Placing ads is always effective, but you can also work with local recruiting agencies to help find the workers with the experience you need.

In lieu of adding operations and backend staff, you can use the MealTrack platform to help you simplify and automate key parts of your meal prep business. To learn more, see here.

 

Who are your customers?

Identifying your… identity?

This section is going to help you figure out your brand identity, who will be attracted to your brand, and begin the process of finding those customers who will form the backbone of your business. MealTrack also offers some services to help you with this whole process, so if you’d like to work with a team of professionals, contact us to learn more.

 

Who are we?

Sounds like a simple question, right? But think long and hard about this. It’s the backbone of your business and it’ll be the foundation of your brand image. You need to decide who you want to be and how you want to present yourself to the world. Even an exercise as simple as putting pen to paper and writing down a couple of sentences about who you are and what you represent can help you decide on your branding. This question should be a big part of what drives you forward; business decisions that help reinforce your business’s identity will often be discovered and appreciated by the people who tend to care about that.

For example, part of Bombas’s (an apparel company that focuses on uniquely designed socks) identity includes a dedication to helping the homeless, so every pair of socks you buy also pays for an additional pair to be donated to those experiencing homelessness. That is a business decision that reinforces their identity.

Not every business needs to include some altruistic aspect to it; we can’t always afford the high sticker price of something like “making the world a better place,” but if, for example, part of your identity includes “helping people with a specific nutritional need easily get good food,” you’ll want to build that in to your business instead of just saying it. So if your meal prep business’s identity focuses on providing a good menu to diabetics, having donuts and candy on your menu is likely not be a good idea—unless you develop a sugar-free donut (someone please do that!). Some meal prep businesses focus exclusively on keto, paleo, Mediterranean, and other diets. They identified who they were and the types of customers they wanted to service. And being niche can serve a business very well.

 

Who cares about who we are?

Now that you’ve defined who you are, the next big consideration is determining who cares. This is a big part of your business’s longevity. You need to identify the general type of person who will respond to your identity. In the example above—a meal prep business that wants to offer food for specific dietary restrictions or a specialty diet—the basic answer to this is going to be “people who have a need for specialty food but lack access for some reason.”

The reasons are your customer’s pain points, and you need to know what they are. Is there food fatigue from making the same 5 meals? Is their food cost too high? Do they not know how to properly eat for their diet? Figuring this part out is important to building your brand, because everything else should reinforce your company’s attractiveness to this type of person.

• How does our menu exemplify who we are?

“Put yourself on a plate” is something you hear on Gordon Ramsay’s (apparently dozens) of TV shows (I have yet to turn on a TV and been unable to find some Gordan Ramsay show; he’s the culinary equivalent of Law and Order).

The concept is to identify what makes you unique from other cooks or chefs and put together a dish that personifies you. As a meal prep business, you want your menu to personify who you are as a company. So, for example, if your business is built around offering a keto-only menu, you want to make sure you’re staying away from carb-heavy meals.

Every item on your menu should reinforce your brand identity in some way.

 

Finding your niche

This is related to the steps above. Finding your market niche is crucial to the ongoing success of your meal prep business. This is where you find the balance between your offering and the customers you find and keep. For example, your niche might be narrow (“paleo-friendly Italian food”) or broader (like the menu you’d find at most diners—fish, steak, burgers, fries, breakfast, lunch, dinner, soup, salad, bread, etc.) In our experience, it’s easier to build a brand around a narrower niche than a broader one, because you need to stand out. And it’s hard to do that without taking a stand and calling out to a specific audience.

Here are some questions you need to ask yourself to identify where your niche might be:

• Who do we want to sell to?

This is going to be the type of customer who is ideal for your meal prep business. Demographic information, age, income level, diet restrictions, food preferences, and so on are all important pieces of information that will help you identify the main type of person you want as a customer.

• What are they looking for?

The customer profile you cook up (pun intended) above should help you figure out what type of food they’re looking for, but can’t always get. Research is important, and you shouldn’t skimp on it. Maybe your region is missing a paleo-friendly pizzeria, for example, and your ideal customer really wants that. When you know who you’re looking for and what they’re trying to find, you can build a menu that will attract them.

• What are their pain points?

What prevents your ideal customer from getting what they want? It could be something as simple as “the nearest paleo-pizzeria is an hour and a half drive away and they won’t deliver,” or it could be less surface-level, like “the other meal prep businesses in the area offer similar food but are too expensive for long-term subscriptions.”
Identifying the problems your customer has will help you tailor your menu—and the services you offer, like delivery, pickup locations, or subscriptions—into an experience they’ll want to repeat.

 

Why on earth would they pick you?

What makes your business compelling enough that someone will spend their money on you? Broadly speaking, you need to be: Cheaper, Better, or More Convenient than your competition. Pick two out of three of those, and you’ll be successful. One out of three isn’t enough to be compelling.

• Building value

  • Are we just food, or something more?
    A lot of businesses have some type of mission statement that includes the extremely trite “More than just X.” The reason you see that phrase so often is because it can be compelling to work with a business that goes beyond their basic offering.
    For example, one of our customers offers healthy diet food for a pretty narrow niche. They not only offer delivery, they formed partnerships with dozens of local gyms in their area. Gym members at the front desk can purchase a fresh ready-made meal on the spot, and those with a subscription that includes it gets those meals for free. That’s a unique offering that you don’t see every day, and is part of that type of “something more” that can help your business stand out.
  • What makes us different compared to what’s already available?

You need to stand out from your competition in some way. Maybe you’re offering a different culinary style than other meal prep businesses, and you can be the only ready-to-eat French Cuisine delivery service within a hundred miles. Maybe your food is discounted, and you make up the difference in margin elsewhere. The point is that you need to offer something that makes your ideal customer sit up and take notice, well enough that they’re willing to spend money on giving your offering a taste.

 

• Getting the word out

Branding

Branding is mostly what we’ve been talking about today, but there are some finer details that are included in this process. The above sections all somehow relate to your overall brand, but you also need to think about things like your color scheme, layout, packaging design, logo, etc. These should all reflect your overall brand identity.

The goal is for your brand to be instantly recognizable at a glance. Few companies have accomplished this as well as Apple, to the point where it’s been parodied to death. On the other hand, it’s impossible to see a white background and hear a ukulele playing while an indie singer with a slightly raspy voice sings a few bars without immediately thinking about the iPhone (though to be fair, it’s pretty hard to find that combination elsewhere anyway—but that’s why it works!)

If you need help getting your meal prep business branding off the ground, contact us. We can help.

 

Marketing

• SEO

Your website should be easy to find for people in your service area. But if you’re running a delivery service in Georgia, you really don’t need people in California finding you through a web search. Your search engine optimization program should be based on regional searches more than anything else. If someone searches for “Italian delivery near me,” you want your business to show appear. SEO is what gets you there.

We have additional guides coming soon on how to build a good local search SEO program.

• Advertisements

You can’t rely on purely organic search results, to be blunt. SEO will help you in the long term, but in the short term, you need to be proactive and find your customers. Your research should include where your ideal customers tend to get their information. Target these people where they hang out (digitally), and build an ad campaign that will reach them. You may be better off focusing primarily on paid search results through Google, or perhaps focusing on Instagram ads, or even YouTube spots, depending on your target audience.

There are a variety of agencies who’ve built their entire business around managing digital ads for businesses, many of which offer packages that are affordable and effective for smaller organizations or startups. If you don’t have the background to do this yourself or can’t hire someone who does, reach out to an agency you can trust.

If you need help with this, contact us.

• Social media

Though many don’t want to admit it, brands without a social media presence might as well not exist. Social media is where customers (and potential customers) interact with brands they like. Again, based on your research, you should have a pretty good idea about where your ideal customers have their social media accounts. Focus on building a brand on those specific channels; it’s better to go narrow and deep than broad and shallow. My local pizzeria has accounts across all of the main social media outlets, but barely posts—as a result, they have few followers on any of their accounts. Pick one or two, and post frequently. Follow back. Respond to comments. Share content that might interest your customers. Create content that might interest your customers.

Social media is basically how you are going to build an audience without spending a ton of money—it only takes a little time and effort. And that pays off big time down the road.

• Content strategy

  Your content should focus on things that are relevant to your ideal customers. If, for example, you’re going for a keto-friendly menu, you’re going to want to produce articles that somehow relate to that. Topics like “Why should I try a Keto diet” will be more relevant to your customers, and should be discussed. And keep your SEO programs in mind as you produce this content, because including relevant key phrases will help your site gain traction.

You can find out more about content strategies here.