How to Start a Food Delivery Business in Mumbai

Food delivery, especially online food delivery, is one of the fastest developing sectors in India. India’s online food ordering segment was valued at $750 million in 2017 and is likely to grow up to $7.5 billion by 2022.

As expected, Mumbai, the economic capital of India, has a major share in this growth. Currently, Mumbai alone contributes to roughly 14% of the online orders across the country. Evolving lifestyle patterns of people who have hectic work routines and/or are working from home is the primary reason behind this accelerated growth. Since the pandemic, consumers have preferred to order online even more.

Whether you want to invest your savings or take a business loan, the time to start a food business in Mumbai is right. To start a food business, the following are the first steps:

Market and Menu Planning

The food delivery business is a crowded space with a lot of competition. It is important for you to establish a few advantages, which will enable you to shine among the competition. There are three key aspects that you must plan out - target segment, menu, and delivery area.

You can either serve a general audience or focus on specific customer groups such as bachelors, new couples, or working professionals.

Once you have a target segment in mind, look at what type of food you want to serve them. You can consider options like fast food, North Indian, Chinese, Italian, etc. The next step is to create a menu that has a mix of dishes already in demand with some new, innovative dishes.

The final step is to identify the areas that you want to deliver to, factoring in the availability of the target audience in those areas. Try not to have areas that are too distant so that issues related to late delivery, stale and bad quality food do not arise.

Create a mobile app or website

The online food delivery business is extremely dependent on maximizing the use of technology. You can either list your business with big platforms like Zomato, Swiggy, Dunzo or create your own app or website. Linking it with Whatsapp can help it become even easier for customers to order from your business.

Get your licenses in place

It is important to obtain all the mandatory licenses like FSSAI, Shops and Establishments Act, GST, and trademark registrations. You might also have to check with the local body, i.e., Nagar Nigam or Municipal Corporation, for any additional permissions. It is advisable not to miss this step to avoid any legal issues in the future.

Invest in marketing

While all the steps taken so far are important, they will all go to waste if the business does not generate revenue, and marketing is critical for that. If you are collaborating with another online platform, look at placing ads in their app or on the website. If you are creating your own app/website, invest in digital marketing or other initiatives. This would make people aware of your business so that it becomes a preferred option for them.

As in any business, you will require some capital to set up the infrastructure and some for business operations. While savings are a good source, it is not advisable to empty all personal funds into a business. Instead, you can look at availing of a business loan facility from a trustworthy lender. Whether it is marketing or setting up a kitchen, a business loan at the right rates of interest can help you go a long way.

But before taking any such loan, you can check the existing business loan interest rates on the lender’s website. Make sure that you plan your business cash flows to sustain the burden of EMIs; an online business loan EMI calculator can help you with that.