Since the Covid-19 pandemic, there has been an influx of new eCommerce businesses. The pandemic made people realize that there are countless businesses that they can do from the comfort of their homes. One such business is a meal prep business. The meal prep business is among the most successful kinds of businesses in the food industry in 2021-2022. If you plan to start your meal prep business, you need to first understand its technicalities. If you are interested in how to start a meal prep business, then read on!
What Is a Meal Prep Business and Why Should You Start it?
As the name implies, the “meal preparation” kit is what a meal prep business is all about. These kits feature everything you’ll need (proteins, vegetables, spices, and sauces) to make a gourmet meal from the convenience of your place. The nicest part about these meal prep kits is that the components are pre-measured according to the instructions, so you don’t need to worry about getting the proportions wrong.
Now that you know what meal prep kits are, you must know a little bit more about them from a career standpoint. There are numerous advantages and drawbacks to beginning a meal prep kit business as with any business. Nevertheless, its success is determined by how well you carry out your business strategy and advertise it.
The following are some pros and cons of starting a meal prep business.
Advantages of Meal Prep Business
● Generate Profit:
The main reason behind starting any kind of business is to generate profit. Compared to other food-related businesses such as restaurants, meal prep businesses have a higher profit generation rate. However, if you want your meal prep business to generate good revenue, you need to have a perfect business plan and a catchy marketing strategy.
● Provides Flexibility
The best thing about starting your own meal prep business is that here you are, the boss. You can assign specific days for cooking and delivering. In this way, you can make your schedule flexible and time-efficient. If you hire a chef to cook the food, you can spend your time planning new ways to market your products or come up with new menus.
● Customer Feedback Can Cheer You Up
There is nothing more rewarding than hearing your customers praise your cooking and services. If your services are great and your menus are interesting, then your small meal prep business can become a giant through your customers’ support.
Challenges of Meal Prep Busines
● High Competition
The meal prep business is gaining popularity among the masses. Some cities have high competition, with many people making similar meal prep kits. If you want to set your business apart from others, then you need to find ideas to make it unique. You can try to introduce different cuisines, different branding, better quality food, and better prices.
● High Overhead Cost
High overhead expenditures could significantly influence earnings and, consequently, revenue if allowed unregulated. You can reduce this by starting small and working out of your kitchen or just managing this new business component from the existing food business.
● Logistics
Until you have software that helps you with these time-consuming logistical obligations, meal prep is an operations-intensive business that will employ a lot of preparation and adequate administration skills. Check out back-end technologies if you want to digitize all manual operations and let analytics run your profitability.
How to Start a Meal Prep Business?
Suppose you have decided to start a meal prep business after understanding the advantages and challenges of the meal prep business. In that case, you need to understand that it is not an easy process. Even if you plan to start small, you would still need business planning, get licenses, get permits, get funding to start your business, and spend time planning how to market your product.
Here is a quick guide on starting your meal prep business by following simple steps.
#1: Choose a Business Type
This is the first and most important aspect of your business. Choose what kind of meal prep kits you want to offer. Do you want to offer local cuisine? Or do you want to offer exotic continental dishes that your audience will want to learn? Or maybe you could introduce a fusion of both? The possibilities of producing meal prep kits are endless. You can also target a specific audience, such as you could provide vegetarian meal prep kits for vegans, kids meal prep kits for children, or maybe something for people who have allergies or are intolerant to some ingredients, such as lactose-intolerant people. Before you move on to designing a business plan, you need to choose your business concept.
#2: Execute a Business Plan
Creating a good business plan is a must if you want your business to succeed. The basis of your business is a business plan, which can help you receive loans from financiers, anticipate sales, stay organized with duties to do, and sketch out any ambiguity about running your operation. The following should be included in your business plan:
- Administrative Summary
- Business Description
- Vision and Menu
- Administration and Ownership Structure
- Employees and Staffing Requirements
- Market and Competitor Analysis
- Promotion and Marketing Strategies
- Financials
#3: Get Funding For Your Business
You’ll know the amount you’ll need to get launched now that you do have the cost estimates from your company plan. Even if you’re establishing a home-based food delivery service, you’ll need initial resources to get your meal-kit business off the ground. Add up the expenses of commodities, rent, utilities, payroll, and any other overhead cost if you’re dealing with a larger organization. You can then make a budget and estimate how much funds you already have, or you’ll need in case of applying for loans.
#4: Obtain Food Permits
Special permits are required to start a meal prep business both from home or in some facility. The following is a list of the permits that you’ll need to acquire for your business:
- Employer Identification Number (EIN)
- Vendor’s Permit
- Company License
- Food Handler’s License
- Catering License
- Health Department Permits
- Zoning Permits
- Dumpster Placement Permit
Final Thoughts:
There is a lot of work that goes into starting a meal prep business. We wanted you to know the pros and cons of a meal prep business before committing yourself to it. We hope our little guide helped you understand how to start a meal prep business