2021-03-09 14:53:22 Growing a Business English Is your business looking to start a restaurant delivery service? Here’s what you need to know about food delivery for restaurants. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2021/03/restaurant-delivery-service-photo-qbo-ca-desktop.jpeg https://quickbooks.intuit.com/ca/resources/growing-business/how-to-start-a-food-delivery-service-for-your-restaurant/ How to Start a Food Delivery Service for Your Restaurant

How to Start a Food Delivery Service for Your Restaurant

8 min read

In a post-COVID world, the pandemic has changed the face of restaurants everywhere. Canadian restaurant trends for 2021 assert that one of the biggest trends to take over the food and restaurant industry as a result of the pandemic is the rise in food delivery businesses.

According to a business wire research report, the global market for online food delivery services is expected to grow to over $150 billion by 2023. It is apparent why restaurants should consider extending their services to cover this growing market.

Therefore, if you are looking to start a food delivery service for your restaurant, then here is what you need to know.

 

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How Do Restaurant Delivery Services Work?

To start a restaurant delivery service, you first need to understand how delivery services work- from the associated fees and taxation to the online ordering and payment systems required to implement this service successfully.

There are two main methods that restaurants typically use to deliver food to customers. Restaurants can either offer delivery services and online ordering from their own business website, or they can use a third-party service provider to do so. Either way, your customers will need a platform to order your food from, and a way to complete the financial transaction before their food can be transported to them.

Setting up your own delivery service means you must have the infrastructure, internal processes, software, and equipment to handle this extension of operations for your restaurant. However, if you would rather not deal with these added logistics, you can always partner with delivery service providers to get the job done and cut back on overhead costs and startup costs at the same time.

Even if restaurants decide not to use a third-party app, they can still learn from these services. Delivery app trends in 2020 illustrate that people of all ages are branching out to use these services to obtain food. More and more Canadians are supporting local too. Now is the time to take advantage of the growing popularity of food delivery for restaurants, by establishing your own.

Remember, as you already possess the applicable business and food licenses to operate your restaurant, be sure to check if there are any other legal requirements necessary to extend your business with this delivery service.

How Much Do Delivery Services Charge Restaurants?

When partnering with third-party food delivery apps, restaurants will generally have to pay a monthly fee or delivery service fee attached to every order or menu item- depending on the structure of the contract.

During this surge in popularity of delivery services, these third-party apps, like Uber Eats, were taking fees up to 30% of customers’ total orders. However, with the rise in usage due to the pandemic, these platforms are also offering other options for restaurants. These companies are now offering things like 0 commission on orders when the customer picks up from the restaurant or a smaller processing fee for restaurants that use their own ordering service but transport the food using the app’s drivers.

Therefore, when choosing food delivery for restaurants, you’ll need to determine what services offer the lowest fees for use of their platform, and which ones will reach your target audience the best.

Choosing a Restaurant Delivery Service

In recent years, especially within 2020, there has been a growing trend of food delivery businesses and apps. Many restaurants partner with established third-party delivery platforms so they do not have to offer their own services. It is important to do your research on the various platforms to determine which one would work best for your business to reach your target market.

For that reason, we have compiled a list of the most popular online delivery services that Canadian restaurants can partner with, including:

  • Uber Eats
  • Skip the Dishes
  • DoorDash
  • Ritual

Uber Eats

What began as a ride-sharing app has now expanded into the delivery service market as Uber Eats. This popular company now offers a restaurant delivery service in Canada, boasting a global average delivery time of just 30 minutes. This food delivery app offers restaurants the ability to connect with their delivery drivers or use the restaurant’s own staff for lower monthly fees.

You can add your restaurant to the Uber Eats database and the company will provide you with a free food photoshoot as part of the onboarding practice. Upload professional pictures of your signature dishes to their app to entice customers to choose your delicious dishes.

Skip the Dishes

This Canadian established delivery service for restaurants works with businesses all over the country. Partner with Skip the Dishes to manage all orders through the platform and prioritize the order flow. You can even track couriers in real-time to ensure your orders are picked up on time. Take advantage of their large network of users to reach a wide range of potential customers!

DoorDash

Using this third-party service for your restaurant will see you gain an established network of customers that can potentially order from your menu. To work with DoorDash, you can easily add your restaurant address and contact information to their database, upload your menu and hours of operation, and decide how you would like to accept payments.

DoorDashers, or drivers, average a 37 minute delivery time and can help you improve your margins and increase the brand awareness of your restaurant.

Ritual

Ritual is a bit different than the other third-party services on this list, as using this software allows you to offer online ordering and delivery directly on your restaurant’s website. Using Ritual services means you gain the use of a commission-free online ordering system, accepting orders without hardware while integrating with your POS system directly.

Pricing for these services starts at $69 a month, per location. Additional fees apply for those restaurants that want to add a loyalty program or other features, while standard credit card processing fees still apply.

Creating Your Own Delivery Service

If you feel that partnering with established food delivery businesses like the ones listed above are not the right fit for your restaurant, then you also have the option to build an app yourself or offer delivery services through your business website.

You can start your restaurant delivery service using the pizza chain delivery model. Thanks to well-known pizza places like Pizza Pizza and Pizza Hut, their delivery services represent the best way to offer food to people throughout the community. These pizza places have built an online ordering system on their website and use their own employees to deliver the orders coming in.

Coining the 30-minute delivery promise or it’s free, customers have come to expect fast and reliable delivery. These food delivery services use an autonomous ordering model like the third-party apps, but for yourself. This allows you to keep customer services and relations in-house for your restaurant to gain greater control over customer experience, and their interpretation of your brand. This model can help restaurants reduce costs, and drive up customer loyalty.

Learn more about building a food delivery app for your restaurant.

Restaurant POS Systems

The restaurant’s point of sale system is what effectively allows you to complete transactions for your business. As such, you will need to ensure it has the capability to process online transactions for your new delivery services. You will also need to determine the ongoing charges to every transaction to cover these added services.

These established third-party delivery apps are known for great integration between their online software and businesses’ point of sale systems. Therefore, if partnering with one of these companies, take a look at your restaurant POS system to ensure that you can adapt your services to this new ordering process successfully.

Consider reading this guide to help you determine the best POS system for your small business.

Delivery Logistics

The ordering platform for food delivery businesses is only one of the major aspects of offering food delivery to customers. There are still three main logistics you must consider: delivery menu, packaging, and transportation.

Delivery menu items

Will your restaurant provide specific takeout options and delivery menus that differ from your in-house dining options? Many food establishments offer an alternative menu, one that is smaller and has fewer dish options to make it easier for the staff.

Packaging

How will you package your dishes for transportation and delivery? There are many options to choose from when it comes to take-out packaging- plastic, styrofoam, paper bags, and other materials. Your drivers will also need to have insulated bags or containers to keep orders warm while driving.

With a current focus on the environment and the growing need to cut back on single-use plastic, many restaurants are opting for a greener alternative for their packaging, whether that’s offering recyclable containers, or using biodegradable options. You will want to do your market research to determine the best packaging options, including overall costs and green alternatives, before settling on your chosen containers.

Transportation

Finally, how will food orders reach customers? The transportation of your orders is a huge part of this service. When using third-party services, the company’s drivers will come to your restaurant to pick up orders and drop them off where they need to go. If you are offering your own services, then who will be responsible for the transportation of the food orders? Will you hire specific delivery persons and use a company car, or will you have your employees use their own?

Whether or not you hire a third-party delivery service for restaurants, or create your own process, you will still need to determine these logistics before getting your new operation up and running.

Delivery Apps and Accounting Software

Before you can start a restaurant delivery service, you will also need to determine how you will track the cash flow of this new operation. The associated expenses and revenue of your food delivery must be accurately tracked and accounted for. Millions of businesses turn to QuickBooks Online to help them with their restaurant accounting needs.

It is best if restaurants use accounting software that can easily sync with other apps and softwares associated with your internal processes. Softwares like Flex Catering can sync with QuickBooks to offer online ordering capabilities while tracking cash flow internally. Your business can also gain POS app syncing to streamline the transaction process.

Overall, if you’re looking to expand your restaurant’s services to include delivery, then you’ll need the right software tools to help track costs and revenue while also syncing to thousands of other apps to cover all your business needs.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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