How to Start A Meal Prep Business In 6 Steps
A meal prep business allows customers to enjoy a high-quality meal that suits their diet without going through the motions of food preparation. They don’t have to plan their meals, go grocery shopping, clean up and wash dishes, or worry about wasting food because they get exactly what they need for each meal. A meal prep business will handle everything for them.
Due to this incredible convenience, more and more people are looking to these businesses to deliver healthy and delicious food options fast and effortlessly. If you are thinking of building a meal prep business, here are the steps:
Step 1. Select a niche
As the backbone of any business, your niche will set you up for success. It is important to define your target market before you start a meal prep business because this will guide you in building your menu and services. A niche lets you narrow down on a single focus that you can specialize in and become known for. It also helps you understand the kind of competition you can expect to have. For example, your meal prep business could specifically cater to people with specialty diets required by health conditions.
The niche will help you create recipes and the menu you will offer. Develop a good understanding of how you can put together delicious meals that fit the lifestyle and needs of your customers. Research is valuable in this phase because your customers will rely on you to get the information right so they don’t have to do it themselves.
It is important to think about the type of ingredients you will use; how you will store and prepare them, whether or not they travel or reheat well. and what the best combinations are. From here, you can also determine the type of beverages you can offer and whether or not you can offer appetizers, desserts.
This will also inform your decision on the type of meal prep business you are going to be. Will you simply prepare the uncooked ingredients and have them delivered to or picked up by customers? This means that every ingredient comes in the proper portion as well as the instructions on how to cook them. You can also opt to prepare and cook meals good for the entire week and your customers can simply reheat each one.
A popular meal prep business model is pre-cooked storable and reheatable food delivered straight to the customer’s doorstep. Meals good for two weeks are delivered to them, and they only need to store it in the refrigerator or freezer and reheat it when it’s time to eat. There’s zero preparation and minimal cooking and cleanup on their part. This is a godsend to consumers with busy schedules. At the same time, if you cater to customers with health goals or specialty diets, it saves them the headache of having to count their calories or research what food they should stay away from or have more of.
Step 2. Write a business plan
Now, it’s time to delve into the paperwork. Writing a business plan is a necessary step in how to start a meal prep business because it will help you define realistic goals and how to get there. This will allow you to better understand your business and your goals, but also help you get some financial backing from lenders.
A business plan basically lays out the ins and outs of your meal prep business. Here, you will determine, among many others, the types of service and products you will offer and how much you will sell them for. You will also discuss the specific strategies to market and advertise these products, and the costs involved in the production.
At this point, you will also choose your business name. Check state’s business records and federal and state trademark records to make sure that your name is not taken or trademarked. You also might want to make sure that you can buy a domain name for it as you will need a website to establish an online presence. Many customers are online, and order from the convenience of their smartphones and computers, so a website name that matches your business name is essential.
When you’ve nailed down the name for your meal prep business plan, it’s time to register a business entity. If you’re just one person in the company, by default, your business is registered as a sole proprietorship, which means you serve as the owner and operator. It’s simple because there’s no separate business tax returns you have to worry about but it also means that you and your business are the same entity. This makes you responsible for any legal and financial liabilities incurred by the business. In the event of the lawsuit or unpaid debts, your personal assets can be at risk.
If there are two or more people, the default business entity is called a partnership, which has two types. A general partnership splits the profits, losses, and legal liabilities equally among owners while a limited partnership allows owners to take different roles. Some partners actively operate the business while the rest act as investors.
A limited liability company or LLC is the most attractive and popular option to many. There are extra steps to creating an LLC but they are definitely worthwhile. You can register your meal prep business as an LLC even if it’s just you. With an LLC, owners do not take on personal liabilities when the business incurs debts. They are protected from legal liabilities. If your business gets sued, you won’t have to worry about your personal assets. Tax-wise, your profits are considered as your personal income and therefore not subjected to corporate taxes.
Step 3. Get the necessary permits
An important part of how to start a meal prep business is to get the licenses and permits required to operate legally. The basics include a business license, an employee identification number or EIN, and business insurance. If you are going to sell alcohol, a liquor license is required. Depending on the location and the availability of the licenses, waiting time and fees will vary.
At this point, you probably already know where you will be operating. The next thing you need to figure out is the kind of space you want to set up. You can build your own kitchen, which means you will either lease or buy a location. For both instances, you will need a Certificate of Occupancy or CO. If you are leasing, you need to make sure that your landlord is able to obtain a CO that is applicable to running a meal prep business prior to signing any lease. You will have to obtain the CO if you own the place. To successfully get a CO, your building or zoning department will check the safety of the building including the plumbing, fire safety, and electricals.
In line with this is a building health permit, which ensures that your meal prep business meets the standards for sanitation and food management. A building health permit is not always required and is common for those who are building new construction.
If you don’t want to lease or purchase a space, you can opt for a commissary kitchen instead. This means you will be renting a fully furnished commercial-grade kitchen to use for yourself or share with other operators by choosing a timeslot. The kitchen owner will be the one to handle the safety licenses for you. All you’ll need is a food handler’s permit, which is obtained by passing an FDA-approved training course on food hazards, proper hygiene, proper temperature control, and storage. Learn more about how to rent a commercial kitchen in our commissary kitchen guide.
Step 4. Obtain funding
A good business plan should be able to attract investors who believe in the viability and profitability of your business. You can get a business loan, a personal loan, or an SBA loan.
It is a good practice to have several sources of funds. You can set up business credit cards, which are a great option for a business owner with a less-than-ideal credit history. You can also look into business lines of credit, which provide you with a set amount of money that you can use to cover business expenses.
Equipment will be valuable to your meal prep business, so it would be beneficial to have equipment financing as well. This usually involves a lender loaning you money specifically for purchasing equipment. The equipment itself serves as the collateral, which makes it easy to apply to and overall a great option.
Step 5. Find proper equipment
When shopping for a meal prep business, start with the food prep equipment. Whether you are renting a commissary kitchen or building your own, it’s important to be aware of the equipment that can help you deliver the freshest ingredients to your customers.
Food slicers. Food slicers will save you a lot of time by reducing the elbow grease or fully automating the process of cutting, slicing, and dicing meats, vegetables, fruits, and other ingredients. You can expect consistent results for much less time and labor. Depending on your needs, you can get light-duty, medium-duty, and heavy-duty food slicers. Electric and automatic slicers provide the power required so there is little to no manual labor, making them the ideal option for most meal prep businesses. Get the lowdown on food slicers in this blog.
Mixers. Mixers will be a must-have for any meal prep business. They come in different styles and capacities such as planetary mixers, spiral mixers, and hand mixers. Check out our full buying guide here.
Food processors. Food processors are a pretty versatile piece of prep equipment to have in a meal prep business. They can help you make good ingredients and achieve unique and amazing flavors quicker. You can use a food processor to put together sauces, soups, and even smoothies and bread crumbs. Learn more about how food processors can help you in your meal prep business in this blog post.
Dough processing equipment. If you plan to offer various baked goods, making dough in bulk will be much easier with the help of dough sheeters, dough cutters, dough rollers, dough dividers and rounders.
Meat and seafood preparation equipment. If meat and seafood will be the main ingredients of your recipes, you can invest in prep equipment dedicated to these types of foods such as meat saws, grinders, tenderizers, sausage stuffers, meat mixers, and shrimp cutters.
Stainless steel tables. No meal prep business is complete without sturdy and smooth prep tables that provide the ideal surface to work. Choose heavy-duty 14-gauge stainless steel tables for setting up large or bulky equipment. For general needs, 16-gauge will do.
Warewashers. This provides a quick and efficient easy to clean cookware and utensils you use to prepare and cook food. They are available in a wide variety of styles depending on the types of wares you are washing. There are specialty warewashing equipment for cleaning pots and pans, glassware, and utensils. Here is a complete warewashing guide that can help.
Sinks. Meal prep businesses will need different types of sinks for different needs. For manually washing plates and various wares that you use throughout the day, you will likely need something like a three-compartment or a four-compartment sink. The same type of sink will be needed for washing produce. For employee hygiene, you will need handwashing stations. Like prep tables, sinks are made of stainless steel at 14-gauge, 16-gauge, and 18-gauge. For most commercial applications, a 16-gauge sink should be good. For heavy-duty use, a 14-gauge is better suited. This complete stainless steel sink guide can help you choose the best units for your operation.
Refrigerators and freezers. You need a way to keep a bulk of ingredients on hand and fresh. Refrigerators and freezers are available in a wide range of capacities. For most meal prep businesses, you will need three-section cold storage units that can fit a large amount of perishables at a time. You can choose from top-mounted and bottom-mounted units and Check out our complete refrigeration equipment guide to find the best units for your meal prep business.
Refrigerated prep tables. These units combine a freezer or a refrigerator and a work surface where you can assemble orders. You can get instant access to fresh ingredients at the base and then prep everything at the top. Read this guide to find the best prep tables for your needs.
Step 6. Define your brand and establish online presence
Now, it’s time to get the word out about your business and get some customers. Set up an official website and social media accounts. For your website, you will need a domain name and a hosting service. Since orders will be placed via there, choose an e-commerce website that allows you to add an online store. Making a website may appear daunting but technological advancements have made it easier so that the average user can build their own without any technical know-how or expert help.
Create official Facebook, Instagram, and Twitter accounts, and connect them to the website. Take advantage of the large user database of each one by creating ads.
Next, make sure you will be easy to find. Set up a Google My Business profile so users in your area can find you when they search terms related to your meal prep business. This helps people become aware of your business. Here, you provide all the information customers will need to connect with you. This includes the website, the contact number, and your physical address. You can also answer any questions they may have and allow other visitors to view.
Although Google also allows you to receive reviews and answer questions, signing up for a review site such as Yelp is also a great idea because it is also a fairly popular destination and also helps you establish a greater presence and credibility online. Since it is mainly a review site, it also provides users who discover you with more information about your service from the perspective of those who already got to experience it.