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Food business. Need your suggestions/advice.

By Ram on 27 Comments / 2738 views

Hello Rodinhooders,

It has been quite some time I wanted to start a food delivery business (complete process of cooking and delivery will be handled by us) in Mumbai but could not do it due to lack of finance and job restrictions as usual.

Finally after lots of waiting I have managed to secure funds to get started. Targeting end Dec 2015 as the launch date we have started working on the activities like setting up the kitchen, hiring chef/support staff, product development, mobile app development (almost completed) and talking to vendors for marketing/design etc.

Recently while browsing I came across few articles (links provided below) which got me thinking. Am I too late to start the business, is there something wrong which I am not able to see, should I start or drop the idea?

All readers/foodprenuers: request your suggestions.

Links of articles:

Angels-backed-mobile-food-ordering-startup-dazo-shuts-shop

Tough-times-ahead-for-food-delivery-startups

Beginning-end-food-delivery-start-ups-aditya-somani

Thanks,

Ram

@notify2ram

notify2ram@gmail.com

 

 

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27 Comments

  1. Hi Ram,

    First of all I don’t see any point to get worried over what traditional media says about your startup vertical because at the end of the day, it’s your marketing strategy and your revenue that get counted. If you employ right marketing strategy to the right demographics of people, you will have a great target audience as your foundation customer base. Next would be the value (Quality of food and delivery time in your case) you provide to your foundation customer base. Once you reach the peak of that, word of mouth marketing would do wonder. I would suggest you to stop worrying over those articles and remember & implement these 3 things:

    1. Do more of what’s working,
    2. Stop doing what isn’t working,
    3. Try new things to see what does work.

  2. hey ram,

    feel free to post your q to sangram as well.

    https://www.therodinhoods.com/forum/topics/ask-sangram-anything-about-foodpreneurship

  3. Hi Ram,

    I ran a food delivery startup for about 2.5 years and have gained some experience in that area. What I read is very similar to what we were doing. Lets connect and discuss.

    Regards

    Rituraj

  4. Hi Ram,

    There is  no pint of worry…as every person has his own strategy to do the business. No doubt this is (FOOD Business ) high demand in the market but at the same time with heigh expectation. Specially when it goes to regular delivery. 

    For repeat business you need to be very much focused on service and quality and regularity.

    So choose your own way and do what you want…don’t bother for other failure but be practical in decisions at same time.

    Poonam

     

  5. Hi Ram,

    1. You are going to set up kitchen and make your own food / menu.

    2. Delivery and i believe take away will be your main focus segment.

    So trust me there is nothing wrong as long as the quality of food and service is good. Those who are closed or closing were probably not in the same model. They were executing deliveries from different food joints.  

    They are / were called food tech in current scenario. 

    You are starting a traditional business which has proven track record. App, Delivery and advertisement are the business enablers. 

    So don’t worry. I am running a food start up since last more than two years. I was never worried about shut down and in fact without any promotion we are growing day by day. We do not make anything. We deliver cakes from well known bakers in Ahmedabad and Baroda. 

    The fear in your mind is obvious… Everybody is little bit scared before starting something new or joining a new job or appearing for an exam. Don’t worry… You will excel if stuck to best services.

    Happy to share that i was having the same feelings before starting. After buying the domain http://www.cakehunt.com, the first thing I did was posted my queries here on therodinhoods. 

    My best wishes to you.

    Ashish S Parik, the cakeman who deliver feelings, 

    PS : I am not good in writing so kindly excuse me for that.

  6. Hi Ram –

    I agree with quite the replies of Ashish, Rupak and Poonam.

    Just because someone in the industry failed doesn’t necessarily mean that it’s a wrong industry to be in!

    Infact, some of these start-ups failed because their cost of acquiring a customer was huge and these customers didn’t usually turned up for repeat purchases. I have seen instances that on a purchase of Rs. 200/- folks were getting as high as Rs. 150/- as a cashback! Basically, these companies survived this reckless business model until they had bank accounts filled with VC funds. Once the cash was tight – they got into trouble and also since most of the traction and orders were “bought” by discounts and deals, there was not much of a repeat business!

    You should be looking at keeping the business model agile and frugal, and focus on the quality and taste. Things will go well for sure 🙂

    Good luck with the venture and let me know if I can be of any help anywhere!!

  7. Thanks Rupak for your inputs. Will surely focus on the points mentioned above.

  8. Sure Asha. Thanks.

  9. Hi Rituraj. Find my number – 9167307060. Please let me know a feasible time we can discuss.

    Thanks.

  10. Thank you all for your inputs. Your thoughts/suggestions gives me more confidence to mover further.

    Thanks.

  11. Try and reach out to the founders of the companies which have shut down…see if they will be willing to share their experience and what went wrong. Learn from them and avoid those mistakes.

  12. Hi Rupak

    Infinite insight in just one sentence “don’t see any point to get worried over what traditional media says” – a big high 5 for this 🙂 

    Ashish

    don’t see any point to get worried over what traditional media says 

  13. Foodtech startups would be the first victim of the current bubble. Think about it rationally, what exactly are they doing? The largest startup is nothing but a collection of menus…like a directory??? while others are like delivery boys!!! And they command millions of dollars of valuation from VC’s who have a herd mentality of just chasing the latest trends!!!

    Having said that, I think you have nothing to worry about as you will be handling everything on your own, which is a traditional business and has nothing to do with foodtech! Food is an evergreen business as people will always need it. My suggestion would be to make the best use of these foodtech companies as they currently have the money and can afford to offer you services for free / discount..

  14. Hi Ram

    I am no expert in Food Business but it does look like a crowded space like many other areas. It does not have any significant entry barrier & there are obvious issues of perishability & inventory management. As you have indicated that you are going to control end to end, you may not need to subsidize the consumer for the same restaurants on competing platforms as the latter is going to drive many to extinction. However you will need to effectively manage perishability & inventory.

    If you intend not to spread yourself thin by trying to cover too much variety & stick to segmented strategy along with price which consumer perceives as value for money it should work. A subscription based model with a monthly, annual pricing for segment such as hostelites, office goers, kitty groups, Schools, CSR Initiatives of some corporates etc could be one of or combination of segments you can target rather than the general mass market as the latter is going to witness more blood bath. 

    A saying in marketing , Bad product cannot sell however effective the marketing strategy. Food Type, Food Quality, Service & Consistency in your case is the product & i am sure you are geared up for the latter.

    Best of luck

  15. Thanks Kalpesh.  

    We will surely focus on Food Quality, Service & Consistency.

  16. Hi Ram,

    Just to add my own two cents to what everyone has said below. If you’re planning on a traditional food startup where you take orders and deliver, trust me those will always work as people always want food. From what you’ve written it doesn’t seem that you’re looking at being an aggregator like Tiny Owl etc so the news stories (even though you shouldn’t be affected by them) are not relevant to your business model in any case. 

    Since I currently run a similar concept myself my only tip would be to start small and to not be afraid to experiment. Rather than focusing on growth, first work on getting your menu, operations, training etc sorted as a food biz depends more on that. If these elements are correct, when the growth comes you can embrace it and not stumble.

    Feel free to reach me on perzen.patel@gmail.com if you have any other questions. I run the Bawi Bride Kitchen and am happy to help out 🙂

  17. Just one thing to note.. Food business is the evergreen business. Learn from what others failed to do and implement the idea in the right direction and keep innovating. I have learned from my past experience that the only thing that can stop you from achieving success is YOU. I am currently running The South Indian Store (Selling South Indian Snacks online) and faced similar challenges in the beginning. Write to me if you would like to get in touch – anoop.nair [at] thesouthindianstore.com

    Thanks!

  18. Awesome comments

  19. Fantastic view

  20. Asha – Have you pointed Bal Ghent to this?

  21. Thanks Perzen, for your comments.

    Will get in touch soon.

    Regards,

  22. Thanks Anoop.

  23. Few areas, u can cover
    1. Make problem statements ( which you can solve now)
    a. Delivery ( Existing food places to Customer)

    b. Cooking ( Create as low priority, as managing many things will be tough)

    c. Customer Identification ( Firms in remote area, where no other firm’s reach)

    d. Web site /App

    e. customer acquisition

    f. Collaborating with existing vendors and outsourcing or partnering with them

  24. As above

  25. bal is travelling right now – he will be in aus for 2 weeks. will email him.

  26. ram,

    pls read this article – https://www.businesstoday.in/opinion/interviews/innerchef-rajesh-sawhney-says-consolidation-existing/story/226154.html

    rajesh sawhney (co-founder of InnerChef, founder of GSF accelerator) has given an awesome interview and cleared some of the air!

  27. Thanks Asha.

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