AboutMike Handy Expertise I can answer any question about starting your own multi-restaurant delivery service, marketing your mobile waiter service, where to get supplies for your delivery service, who to go to for insurance, how to sign up restaurants and just about anything to do with this industry.
Experience Worked for Takeout Taxi as consultant while doing $80 million yearly. Started and owned first online Multi-Restaurant Delivery Service. Sold my service to large Dot-Com and became a consultant for the industry in 2000. My first customer is 2000 is now doing over $3 million in sales per year and I have about 30 other current customers.
Publications Small Business Opportunities - 50 Best Businesses to Start from Home - Made Cover!
Education/Credentials Wright State University - Cracker Barrel University
Past/Present Clients Over 30 - References available.
Question I would like to get some information on restaurant delivery service. How much
money do I need for start up cost? What type of license(s) and insurance(s) do I
need? How long will it take me to make a profit?
Answer Hi Denise,
One of the great things about starting a Restaurant Delivery Service is that you can start it with very little money. Although, you can start with very little money, keep in mind that if you do not invest in the correct software, equipment or marketing material, you can still get started but it will be slow road to profit.
If you ask someone how much it costs and how quick you can get from point A to point B they must ask you some questions before they can answer correctly. The two questions are:
A. How fast do you want to get there (to profitability)?
If the answer is very "I want to get there quickly", then the consultant will explain that you then need the vehicle that is already known to carry someone that distance very quickly. If you are talking about getting from point A to point B you are talking about choosing between walking, a bike, a car or a plane. Of course, each of those come with different price tags. Most people then check their bank balance to see if the price of the ticket is worth them saving time and getting to their goal quicker or should they save money and tuff it out on the bike. It's completely optional.
When I open up a turn key location they can typically expect sales of $1,000 per day within their first few weeks. This is comparable to taking the plane. You are comfortable and know that a professional is taking care of the trip, a little nervous but you know he's done this many many times, and you know the trip will be over soon and you'll get to your destination very quickly.
The other option is to save money by investing more of your own time and efforts to reach the same goal over a longer period of time. You can just hook up an additional phone line or two in your house, try to find a good resource for printing, insulated bags, legal documents (very important), software (very important), go out and try to convince the local restaurants to partner with you, print up some inexpensive flyers or menu guides and PRESTO...you're in business. The only down side to that, is that although you save thousands in consulting and marketing costs, it will take you a considerable amount of time to get your sales to the break even point, and then to profitability.
So the quick answer is that you can probably start an RDS out of your home with a budget of about $5k to $10k. It's very important to point out that starting is not succeeding. You success will be a direct result of 1. How effective your marketing is 2. How profitable your model is.
B. The way we set up RDS's, the company will be profitable the first day opened and taking orders. We get a minimum of 25% commission on sales from our restaurant partners, we sell ads in our menu guides, we charge our drivers equipment rental and our expenses are limited due to national buying power with our vendors. On our model, our RDS's can pay their expenses and pay themselves an average of $50,000 per year if they average $1,000 per day. By averaging $3000 per day in sales, our owners should profit $100,000 per year and also pay managers to manage night shift business. Most of our turn key businesses invest about $50k total into their RDS to get it opened and produce about $1000 to $1,500 per day. Many are able to pay themselves back their initial investment after only six months.
What type of license do I need?
What ever you do, don't go to your city or county and say "I'm going to start a "FOOD DELIVERY" service. The first thing they will do is ask you if you are a restaurant or courier service. If you categorize as a restaurant your drivers will all have to go through food handlers classes and you will be inspected by the city. If you categorize yourself as a courier service you will be liable for everything that occurs in reference to delivery (accidents, food related illness, etc...). The fact is that we are neither. When setting up this model it is important to structure it legally so that we are strictly an restaurant marketing and order processing company. You do this by using the forms, etc... that we provide.
As far as insurance, there are only two companies in the USA that understand our business and can shop around and get us the best insurance rates in the business. You need to have two specific types of insurance that will cost an average RDS about $2,500 to $2,700 per year. This company will also, at no charge, add larger restaurant chains onto your policy, protecting them as well. If you want to do business with the big boys, you will have to have these two specific types of insurance. Also, if you don't go to these insurance companies you will most likely get taken advantage of.
Well. I hope an answers your questions. Please feel free to call me or review my web site for more details about starting you RDS.
Looking Forward,
Mike Handy
Founder/Owner
RestaurantDeliveryUSA.com
www.MobileWaiters.com
