Meal prep businesses provide their customers with cooked food using ingredients of their choice and their preferred style of preparation. Have it in mind that these businesses work as a person’s cook where they make whatever the customer orders.

Once the food is ready, the customers can pick it up or have it delivered to their homes or office. Starting up a meal-to-go business will allow you to be your own boss, enjoy flexible hours, work from home, and have a rewarding career in an industry you love. If you love all things food, then you should consider starting up this lucrative business.

Steps on How to Start a Meal Prep Business

  1. Conduct Market Research

It is necessary to understand what you’re getting into before starting a meal prep business. Note that without having a good understanding of the industry, you wouldn’t know what is necessary to make your business profitable and sustainable. Meal delivery is a highly competitive industry, so you’ll want to carry out a detailed competitive analysis.

This analysis will ensure you identify key competitors, understand competitor pricing, analyze the existing customer experiences and note your competitors’ unique selling points. Owing to these details, you can then put together a viable marketing and pricing strategy.

a. Who is the Target Market?

According to extensive research, the Millennials and Gen X population remain the most viable demographic amongst meal prep consumers, making up about 63.7% of all buyers. They also make up the population with extensive control over their monetary decisions.

Also note that the general clients of meal prep businesses belong to or come from high-income families with an average annual income up to $80,000, making the business extremely lucrative.

When looking to start this business, consider targeting students, busy professionals, young families, and remote workers. Depending on your business model, you may want to target consumers on special diets by focusing on meals with handpicked ingredients.

b. Is Meal Prep Business a Profitable Business?

Yes, the meal prep business can be very profitable. With profit margins noted to be quite higher than restaurants, you can earn a good living with much lower monthly sales.

c. Are There Existing Niches in the Industry?
  • Diabetic-focused diet
  • Gluten-free diet
  • Senior citizen diets
  • Dairy-free diets
  • High-protein diets
  • Vegetarian diet
  • Kids’ meal prep business
d. Who are the Major Competitors?
  • Home Chef
  • Sunbasket
  • Green Chef
  • Gobble
  • Blue Apron
  • Freshly
  • EveryPlate
  • Purple Carrot
e. Are There County or State Regulations or Zoning Laws for Meal Prep Business?

Yes. Aside from the licenses, it is always recommended you consult your state health department to know where you are allowed to prepare the meals. In some states in the United States, food businesses are only allowed to make meals in licensed kitchens. In states with Cottage Laws, you may be allowed to prepare meals to be sold later on in your home.

However, you may be expected to follow the regulations noted by the law. Also, remember to check the zoning laws of your city to see if you can operate a business out of your home. If people come to your home to pick up food, permits may be required.

 f. Is There a Franchise for Meal Prep Business?
  • Combo Kitchen: $72,000 – $298,000
  • Corporate Caterers: $149,000 – $227,800
  • Chefs For Seniors: $11,375 – $27,875
  • Food no-fuss Meals: $211,100-$337,100
  • LeanFeast: $145,140-$235,450
  • Make & Take Gourmet: $204,500-$322,000
  • Copper County Foods: $160,000
  • Dinner A’Fare: $114,200-$213,500
  • GourMade: $141,000-$256,000
  • Dinner By Design: $91,000-$149,000
  • Dinners Ready: $140,000-$225,000
  • Dinner MyWay: $141,700-$228,500
  • Dinners Done Right: $104,500-$197,500
  • SupperWorks: $200,000
  • Supper Thyme USA: $140,000-$225,000
  • Food no-fuss Meals: $211,100-$337,100
  • Sociale Make & Take Gourmet: $120,500-$230,000.
  • Pass Your Plate: $125,400-$198,300
  • Sensational Suppers: $200,000-$250,000.
g. What Do You Need to Start a Meal Prep Business?

You need some requirements to start any business that will involve handling or preparing food to be sold.

  • Legal compliance
  • Food hygiene training
  • Food safety certifications
  • Insurance
  • Customer Base
  • Ingredients
  • Advertising plans
  1. Memorable Meal Prep Business Names

  • Easy Meals
  • Quick Meals
  • Perfect Choice Foods
  • Save Time Food
  • Proper Chef
  • Choice Meal Basket
  • Tasty Dinners
  • The Personal Meal Plan
  • Kitchen Nourishment
  • Order Meal
  • King’s Nutrition
  • Kitchen Savior
  • Mothers Goodness
  • Pantry Empire
  • Meal Labs
  • Order Lunch
  • Wholesome Foods
  • Specialty Dish
  • Kitchen Ally
  • Call and Eat Inc.
  1. Register your Business

a. What Type of Business Structure is Best for Meal Prep Business?

As a meal prep business, your daily activities will involve making and handling food, and your clients can easily sue you, so an LLC ensures you have the thin veil of protection necessary to protect your personal assets. In addition, it helps you avoid the double taxation and other complexities of a c-corporation.

 b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Pick a registered agent.
  • Choose between member and manager management.
  • Establish an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Meal Prep Business?
  • Business license
  • Employee Identification Number (EIN)
  • Food establishment permit
  • Seller’s permit
  • Employee health permit
  • Building health permit
d. What Type of Certification is Needed to Open a Meal Prep Business?

You wouldn’t need any certification to start this business, however, you may need to get some to boost your credentials. If you are seeking certifications in this line of business, here are top choices to consider;

  • Certified Culinary Administrator (CCA)
  • Certified Food Manager (CFM)
  • Food Safety Manager Certification
  • Certified Master Chef (CMC) ACF
  • ServSafe Food Protection Manager Certification
  • Certified Professional – Food Safety (CP-FS)
  • Certified Nutrition Specialist (CNS)
  • Certified Executive Chef (CEC)
  • OSHA Safety Certificate
  • Certified Chef de Cuisine®
  • Certified Sous Chef®
e. What Documents are Needed to Open a Meal Prep Business?
  • Food and Safety Certificate
  • Necessary Licenses
  • Insurance Policy
  • Operating Agreement for LLCs
  • Doing Business As (DBA)
  • Business Plan
  • Employer Identification Number (EIN)
  • Federal Tax Identification Number (TIN)
f. Do You Need a Trademark, Copyright, or Patent?

Intellectual property protection can be very complex and confusing in the food industry. Most often, recipes can be protected under copyright law if they are accompanied by “substantial literary expression.” This literary expression will most often include directions or explanation, the more reason food and recipe bloggers are always advised to share stories and personal anecdotes along with a recipe’s ingredients.

You can also leverage trademark law to protect your business names, logos, or Slogans of food products. You can also consider trade dress law to protect the packaging, shape, or appearance of food products, as long as they express the origin of the owner’s products.

  1. Do your Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Meal Prep Business?

Truth be told, this business can easily be started from the comfort of your home as long as you can get the health department to approve your kitchen. However, a good number of meal prep businesses start as commercial operations, and this entails that you have to lease an approved space fitted with the equipment necessary to make the meals.

Also since you will be offering delivery services, you may need to consider getting delivery vehicles. Nonetheless, depending on your niche and scale, you will need around $1,000 to $125,000 to start a meal prep business.

b. What are the Costs Involved?
  • Rent: $1,000-2,000
  • Utility costs: $150
  • Kitchen equipment: $8,000
  • Inventory: $5,000
  • Package design: $3,000
  • Business insurance: $1,500 per year
  • Distribution costs: $750
  • Email marketing: $20-$100 per month
  • Payroll software: $50-$200 per month
  • Website: $275 per year (domain name and email hosting)
c. What Factors Determine the Cost of Opening a Meal Prep Business?
  • Location
  • Cooking Equipment
  • Business Size
  • Customer Acquisition Plan
  • Licenses and Certifications
  • Transportation
  • Insurance
d. Do You Need to Build a Facility?

Your option here will depend on your location and the type of meal prep business you intend to start. Your business plan might be to start a nationwide empire that delivers well-cooked meals straight to hungry homes. Note that it entails you paying for multiple commercial kitchens and other fulfillment centers to ensure you attain your business dream.

A good number of people would prefer to just own a local storefront where customers pick up meals. You can even choose to only sell meal kits at your local farmers’ market each weekend or even decide to go down the e-commerce lane and sell your products and services online.

e. What are the Ongoing Expenses for Running a Meal Prep Business?
  • Marketing costs
  • Rent
  • Utilities
  • Staff costs
  • Materials
  • Insurance
f. What is the Average Salary of your Staff?
  • Manager: $72,890
  • Accountant: $45,280
  • Marketing and Sales Executive: $42,200
  • Client Service Executive: $34,510
  • Chefs: $67,680
  • Packagers: $50,120
  • Delivery Drivers: $48,000
g. How Do You Get Funding to Start a Meal Prep Business

Indeed there are numerous ways to get funding for this business:

  • Bank loans
  • SBA Microloan
  • Government grants
  • Venture capital
  • Crowdfunding
  • Personal
  • Business Credit Card
  • Business Line of Credit
  • Equipment Financing
  1. Write a Business Plan

a. Executive Summary

Easy Meals is a new meal prep and delivery business that will make and deliver BBQ to the residents of Wichita, Kansas. At a lower price, we at Easy Meals intend to always deliver it hot to the doors of our customers faster than the closest competitor. We will be physically located in Wichita, Kansas where we intend to serve the local communities via our mobile apps.

b. Products and Service
  • Preparing and healthy packaging of hot pork ribs, chicken, beef brisket, and several flavors of barbecue sauce for immediate consumption
  • Managing orders online
  • On-demand delivery app
c. Mission Statement

At Easy Meals, our business mission is to offer residents of Wichita hot and superior products, at a low price, and also provide great customer service.

Vision Statement

Our vision at Easy Meals is to satisfy our customer’s demand for quality BBQ that is delivered hot with a smile. Note that we will serve a seven-mile area with over 36,000 residents and we intend to keep our prices low and affordable to beat the competition.

d. Goals and Objectives
  • A superior product that will bolster customer loyalty.
  • A business location that will guarantee that all our products are delivered quickly.
  • Delivery people that have excellent customer skills.
e. Organizational Structure
  • Manager
  • Accountant
  • Marketing and Sales Executive
  • Client Service Executive
  • Chefs
  • Packagers
  • Delivery Drivers

Marketing Plan

a. SWOT Analysis
Strength
  • Experience in using similar apps
  • A unique app that is specifically made to suit our client’s taste
  • Efficient operational plan with the aid of technology
  • Exceptional customer service
  • Fast delivery service
  • Simple-to-use, fast, transparent, reliable, and secure platform
Weaknesses
  • Limited funds to start up
  • Low brand recognition
Opportunities
  • The fast-rising mobile app market and increasing internet penetration globally
  • The heightened rate of dining out and online order.
  • Opportunity to penetrate prospective markets in other states with our interactive app
  • Technological advancement offering improvements to mobile apps
Threats
  • Intense competition from similar apps and platforms
  • Susceptibility of the platform to Cyberattacks
  • Uncertainty about the economic outlook especially with the COVID-19 Pandemic
b. How Do Meal Prep Businesses Make Money?

These businesses make money from preparing home-cooked food for customers.

c. Payment Options
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • First-time discounts
  • Reward points for successful friend referrals
  • Insulated food packaging
  • Gift cards
  • Student discounts
  • Create a loyalty program
  • Create an email list
  • Utilize social media
  • Recruit managers who have experience working in startup firms

Financial Projection

a. How Much Should You Charge for your product/Service?

In this line of business, expect to have different pricing tiers depending on the number of meals ordered. It is also advisable you check out what your competitors are charging to help you determine your pricing structure. Nonetheless, the standard price for meals in this market is:

  • $11.5 per meal for an order of 4 meals per week
  • $8.99 per meal for an order of 6 meals per week
  • $8.99 per meal for an order of 9 meals per week
  • $7.9 per meal for an order of 12 meals per week

However, note that to break even, you should consider charging around $10 and $12 for a single serving.

b. How Much Profit Do Meal Prep Business Owners Make a Year?

According to reports, if you make and deliver 1,000 $12 meals per month, you can comfortably make somewhere between $2,000 and $4,000, depending on your business expenses.

c. What Factors Determine the Amount of Profit to Be Made?
  • Expenses
  • Sales
  • Efficiency
  • Industry Experience
  • Location
  • Clientele Base
  • Niche
d. What is the Profit Margin of a Meal Prep Business?

According to reports, the average profit margin for a meal prep business is 15-35%.

e. What is the Sales Forecast?
  • Year One: $172,000
  • Year Two: $430,000
  • Year Three: $1,000,000
  1. Set Up your Shop/Office

a. How Do You Choose a Perfect Location for Meal Prep Business

There are numerous factors to consider when choosing the best location for your meal prep business. Agreeably, the most suitable location will be one that allows you to:

  • Deliver meals on time.
  • Serve as many customers as possible.
  • Deliver food using several methods such as car, bike, etc.
  • Deliver food within the shortest time possible.
b. What State and City are Best to Open a Meal Prep Business?
  • Atlanta, Georgia
  • Anchorage, Arkansas
  • Tampa, Florida
  • Honolulu, Hawaii
  • Chicago, Illinois
  • San Diego, California
  • New York, New York
c. What Equipment is Needed to Operate?
  • Commercial Refrigerator
  • Residential Freezers
  • Three Compartment Dish Sink
  • Hand Washing Sink
  • Vegetable Sink
  • Residential Oven
  • Residential Stove Hood
  • Shelving
  • Meal Packaging and Meal Packaging Machine
  1. Hire Employees

Regardless of if you start small or big, you will surely need to hire kitchen staff, and maybe even marketers, accountants, and distributors to ensure that the meals get to the doorsteps of your clients. Here are portfolios you should consider filling;

  • Cooks
  • Marketers
  • Accountant
  • Packagers
  • Customer Solutions Specialists
  1. Launch the Business Proper

First and foremost, you have to realize that a meal prep business needs a lot of supplies. You will need a constant influx of fresh food, packaging, and shipping materials. Consider sourcing your food in bulk from a wholesale supplier to save on your supplies. In this line of business, don’t forget that overstocking shipping supplies might not really be a big deal, howbeit if you buy more food ingredients than you need, the ingredients can go bad.

Once you’ve ordered your supplies, you might want to leverage a trusted inventory management app to ensure you stay on track with every incoming and outgoing supply. This will ensure that you’re never without the ingredients that make your dishes nice.

a. What Makes a Meal Prep Business Successful?
  • Designing Menus That Work Together
  • Taking Orders
  • Creating Shopping Lists
  • Managing Clients
  • Shopping For Ingredients
  • Cooking
  • Packaging
  • Delivery
  • Bookkeeping
b. What Happens During a Typical Day at a Meal Prep Business?

You have to understand that success in this line of business is dependent on the quality of meals you make. Owing to that, a good number of business owners invest time to hand-pick the best ingredients. Your day will start early to ensure you visit wholesale markets to pick out the very best ingredients.

Since a great percentage of the items you need are perishable, you must find a way to ensure you don’t throw away much food. Have it in mind that controlling waste is a big issue as it can be as much as 20% of the cost of the raw materials.

A good portion of your day will involve checking the orders customers have made on your website or through calls, prepping ingredients, cooking the dishes, and finally delivering the meals. Although most businesses run from 9 am to 5 pm Monday through to Friday, you can make adjustments to your operations to include weekends. However, always strive to choose hours that best suit your customers.

c. What Skills and Experience Do You Need to Build a Meal Prep Business?
  • Management skills
  • Organization
  • Attention to detail
  • Cooking and baking experience
  • Understanding of dietary restrictions and food allergies
  • Customer service skills
  • Attention to detail.