When you run a business that focuses on preparing delicious food to hungry customers locally or nationwide, it’s difficult to know where your focus should be. There are so many factors to consider that it is confusing even for an experienced entrepreneur on their second or third food venture.
Here are five factors that the owner of a UK food tech business should pay attention to.
The Test and Failure Cycle
In most cases, a business doesn’t just arrive at the right product or service offering with idyllic results right off the bat. There is a process of testing and experiencing multiple failures to see what works, what doesn’t, and ultimately finding the best solution. Before placing a significant investment into developing a whole new menu, for instance, you’ll want to test a few dishes out to see how your customers take to them. Are they selling? Do they outsell the dishes from your existing menu or merely compliment them? Much can be learned from dipping a toe in the water with new ideas to check their viability. Plus, this allows time for tweaking the idea until it’s the right fit before moving ahead at a rapid pace.
Other than the most well-funded businesses, aiming to blast the airwaves with advertising is a great way to blow through your annual advertising budget in a matter of weeks with few trackable results. It’s far better to understand who your target audience is first and target advertising to them specifically. Either create a customer avatar that reflects your typical or ideal customer, or if you believe that your online food delivery business caters to several different types of customers, model them separately.
Once you know whom you’re targeting, things get much easier. Look for ways to narrow the demographic and customer type through multiple advertising platforms to use your ad spend as efficiently as possible. Maximise the per ad click spend online using trial and error. Use ad analytics to track where your ads are being successful and where they’re failing to attract the right type of customer.
See What Your Customers Want from Your Brand
It is tempting to chase your competition in the local market, but that’s also a quick way to get lost in the noise. Focus on what your customers want from your service, not what they want from other food delivery brands. Survey your customers through your website to see what parts of your service and food offering they enjoy the most. Look for weak points and where you can improve what you offer to satisfy more people without significantly increasing your operating costs or hurting your bottom-line.
Monitor Special Offers Carefully
It’s tempting to offer online coupons to give new customers a discount with their first food order. This is an excellent way to drive new customers to give your products a try out. However, the cost of offering a discount to pull in each new customer should be looked as a customer acquisition cost and part of the overall marketing expenses. Make sure you’re not overpaying for each new customer.
Perhaps the cost of locating customers directly through advertising is less expensive than offering steep one-time food discounts? Compare the costs of different promotional efforts to determine which is more effective but also less costly per new customer. Also, look at which customers re-order at a later time; you may discover that only certain types of customers buy at other times and this may relate to the promotion used.
Does Your Kitchen Operate Like a Well-oiled Machine?
When running an online food business, it’s easy to believe that you can do it all from your home kitchen. The orders won’t grow too quickly, the fridge-freezer will be large enough to store fresh and frozen produce and the food prep areas will have enough space. That’s ignoring the fact that your neighbours might not appreciate food delivery scooters turning up at all hours blocking up the road when picking up your 13th order for delivery that day. That gets old fast.
It’s a good idea to find a suitable kitchen to rent in London in the early stages of your venture before you run into difficulties. Not having enough refrigeration space, cooking hobs, food preparation or packaging areas isn’t something you can fix from a home kitchen of a fixed size. Also, while a handful of daily pick-ups for local delivery might be okay, when you scale up to 10-20 orders every day, you’ll start getting complaints from upset neighbours.
Getting serious about your online food business means being efficient in your marketing efforts and ad spend, choosing an appropriate commercial location for your business to operate from, and being willing to test ideas to see what works and what doesn’t. Only in this way will your business achieve its full potential.