Why Start A Subscription Meal Prep Business?
Instead of reordering each week or month, subscriptions enable customers to sign up for automatic renewals, ensuring they receive their meal kits when needed.
It’s ideal for meal prep businesses aiming to provide individuals and families with regularly scheduled deliveries of prepared meal kits.
To set this up, all you need is your own website and the capacity to produce and deliver meals on a regular basis.
A subscription meal prep business can offer:
✔️ More sales opportunities through an online market
✔️ Convenience for customers
✔️ Regular revenue generation for your meal prep business
✔️ Avoidance of third-party platform fees
✔️ Opportunities for upselling and cross-selling
✔️ Enhanced customer loyalty through personalized subscription options
Subscription meal prep challenges
The main downside is that you won’t be able to partner with third-party food delivery businesses like Just Eat, as they don’t offer subscriptions.
However, you can still use these services to provide one-off meal prep orders.
Another issue is that the majority of e-commerce platforms that allow you to set up subscription functionality for your website also have some downsides.
These include:
❌ Limited customization options for subscription features
❌ Dependency on platform stability and updates
❌ Potential for technical glitches affecting subscription management
❌ Difficulty in integrating with other business systems
😎 Looking for a solution?
While most e-commerce platforms lack subscription functionality in their base offering, Subbly stands out as an all-in-one subscription solution.
Instead of requiring additional plugins for subscription features, Subbly comes fully equipped right from the start.
It addresses all the previously mentioned disadvantages by offering a comprehensive range of features, including:
🔥 Extensive customization options for subscription features
🔥 Reliable and stable subscription management without technical glitches
🔥 Seamless integration with other business systems
Explore Subbly’s features and see whether it’s the right fit for your meal prep business with a free 14-day trial.
How to Develop Your Meal Prep Business Idea Step-by-Step
This section explains how to set up a subscription meal prep business from scratch.
Your meal prep business idea starts with some important decisions:
Will you streamline your customers’ recipe planning and ingredient gathering, or offer them fully prepared meals ready for heating?
Will you pursue family recipes that cater to a unique target market, or are you trying to help people get the important nutrition they need?
To get started, ask yourself these two important questions:
1. What niche will you serve?
Choosing a niche allows you to focus on a specific customer type, which makes it easier to market your meal prep business.
Identify what sets your business apart by considering the following:
🥨 Passions & skills: Are you enthusiastic about the Mediterranean diet? Sharing your well-researched meal plans could resonate with health-conscious customers.
🥨 Community needs: Perhaps you’re part of a Catholic community that eats fish on Fridays instead of meat. Your meal kits could specifically cater to this tradition.
🥨 Business opportunity: Maybe you recognize a gap in the market, such as meal kits designed for special occasions like anniversaries or kids’ birthdays.
🥨 Dietary needs: Consider catering for specific dietary requirements, such as vegan, keto or gluten-free food.
2. What kind of meal kits will you offer?
Overall, you have two main options when it comes to starting your meal planning business:
🥕 Uncooked meal kits: Here, you will include all the raw ingredients needed for your dish with instructions on how to cook it.
For example, you might offer spicy BBQ pulled chicken bowls, where you provide all the ready-to-cook ingredients, along with steps to follow on how to prepare it.
Here’s an example of this exact meal:
🥘 Cooked meal kits: This means that you do all the heavy lifting, such as sourcing ingredients and cooking the meals, and your customers simply heat it when they’re ready.
You could offer a range of pre-cooked meals—such as chicken tikka masala or buffalo chicken mac and cheese—which they can choose from and have delivered to their doorstep.
These meals can then either be stored in their fridge or freezer, and when they’re ready to eat it, they can heat it in their microwave or oven.
Here are a few popular options for cooked meals:
Give Your Meal Prep Business an Identity
Once you know what your meal prep business is going to sell, you can start creating your unique business identity, which includes the following:
🎨 Branding: Your customers’ view
Your name and logo should mirror your unique selling proposition and resonate with your target market.
For instance, if your meal planning business targets retirees, opt for a classical branding style. On the other hand, if you target students, consider a more hip and trendy approach.
You should also study your key competitors’ branding to understand what works and to ensure that your own branding stands out from the rest.
📺 Need a website?
Explore templates designed specifically for meal kit delivery service websites.
With Subbly, you can preview demos of each template instantly, making it easy to choose the one that suits your specialized business.
Start here to choose your website.
⚖️ Business structure: Your options
To legally do business, one of your first tasks is to officially register your meal prep business. This involves deciding whether to operate as a sole proprietorship, partnership, or corporation.
Many prepared meal services go with a Limited Liability Company (LLC) because it offers tax advantages and protects you from personal liability. Do some research to make an informed decision.
To register, simply Google “Secretary of State website [state name],” along with the state you plan to operate in to find the correct website:
You’ll find clear guidance on what you need to do to make your business entity official.
Choose a Business Model
Alongside a good business plan, one of the first decisions you need to make is to decide on your business model.
There are two main viable business models to choose from:
1. Storefront meal prep businesses
You can set up a physical store or location to sell your meal packages from on a one-off basis.
You would then add subscriptions once you have a customer base.
This could be a local shop or farmers’ market stall. You could also use local supermarkets as a middleman.
This setup is ideal for high-end meal plan businesses that want to showcase their personal touch, feature local ingredients, or establish a community connection.
Having a storefront will allow you to:
✔️ Attract local customers
✔️ Build community relationships
✔️ Add a personal touch to your service
✔️ Receive immediate customer feedback
✔️ Host in-store events and promotions
However, having a storefront can confine your meal prep business to a local market, making it difficult to scale in the long run.
Unfortunately, storefronts also have:
❌ Limited sales opportunities
❌ Dependence on location for success
❌ Customers having to travel to you
❌ Higher costs for rent, utilities, and maintenance
❌ Limited operating hours
❌ Need for more staff for in-store operations
2. On-demand meal prep businesses
Whether you commit to a physical storefront or not, eventually you need to establish a website. This will allow customers to browse your meal kits virtually.
However, you could simply skip the physical storefront and only sell meals online.
If customers have busy lifestyles, then subscribing to your healthy meals will save them time. Or if a customer is facing a hectic week, they can order a one-off batch of your healthy meals to cover them.
An online-only business offers you the following benefits:
✔️ Reach a wider audience online
✔️ Easy access for all customers
✔️ Possibility to scale your meal prep business
✔️ Lower overhead costs, such as rent
✔️ Ability to leverage customer data
The downside is that relying solely on online platforms may limit face-to-face interaction with customers, potentially affecting personal relationships and losing out on immediate customer feedback.
If you choose this option, be aware of these disadvantages:
❌ Higher marketing costs
❌ Third-party platforms may reduce profit
❌ Challenges in establishing a community presence
❌ Limited control over meal prep delivery service
❌ Increased competition online
Find Funding to Kickstart Your Meal Prep Business
Now that you have a clear idea of what your business is and how it will work, you need to secure funding so that you can start preparing your meal kits.
Launching a food prep business will cost at least $10,000. This could be used to buy or hire kitchen appliances, utensils, ingredients. However, you’ll also need to invest in the customer-facing aspects of your business, such as a website or physical store.
There are several ways to generate funding:
1️⃣ Fund your own business
You can withdraw money from your savings or liquidate your investments to kickstart your meal prep business—a strategy often called bootstrapping.
This way, you keep full control over your business without taking on debt or giving up a share of your company. Most importantly, you won’t have to answer to anyone else.
However, the downside is that your funds might be limited, which can make it harder to grow quickly.
There’s also a big personal financial risk involved because you might have to invest a large portion of your savings into your meal prep business, leaving you vulnerable if it doesn’t work out.
2️⃣ Borrow from a lender
If you don’t have enough savings to bootstrap your meal prep delivery business, or you want to keep your personal finances separate from your business, then you can borrow money.
There are three main types of credit you can apply for:
💰 Business loans: This is when you borrow a set amount of money that’s immediately transferred to your account, and you slowly pay it back at a set rate each month. Make sure you set out a proper budget for how you will spend your loan, and be mindful of how long you’ll have to continue paying it off.
💰 Business credit cards: These are convenient for covering immediate expenses and often come with rewards or cashback benefits. Credit cards often have the highest interest rates, and you need to be cautious about overspending. Business credit cards may also include a business savings account or a business checking account, which may come with an optional overdraft facility.
💰 Equipment funding: This lets you buy the equipment you need, with the equipment itself serving as collateral. Since lenders have an asset that they can claim if you don’t meet your repayments, the interest rate is often lower and they’re more flexible with repayments.
Overall, using credit to fund your meal prep company can help you start sooner than saving up funds. However, this early access comes at the cost of interest payments.
Before taking this route, make sure you understand all the fees involved and that you can afford the monthly repayments.
3️⃣ Secure startup funding
Another option is securing small business funding from venture capitalists or angel investors who believe in your business ideas and decide to invest in it.
You get immediate access to funds, and in return, they get a share of your business. They may also offer you expertise and mentorship, which can significantly boost your business.
However, this type of small business funding often means giving up some control and ownership, potentially leading to conflicts over business decisions.
🌱 Get support from entrepreneur organizations
Global organizations such as Good Food Accelerator and Food Innovation Network offer guidance to startup businesses.
Organizations like these can assist you with securing funding, accessing mentorship from meal prep industry experts, and connecting with potential investors.
Their resources and networks can improve your chances of getting the financial backing you need to grow your meal prep business.
Get Access to a Kitchen (If Required)
With your funds in hand, you can start getting your meal prep business off the ground.
The premises you need to prepare your meals will largely depend on the number of customers you have.
At first, a small kitchen to prepare and package your meals might be enough.
However, as your food service business takes off, you might need a bigger storage space, more or better equipment, and more space for staff to work effectively.
This is often the progression that meal-planning businesses follow:
🏠 Meal prep at home
This is the most cost-effective option, which is why entrepreneurs often start preparing meals at home and selling locally before they expand to larger markets.
This also gives them a chance to perfect their product offering and properly gauge whether there’s sufficient demand to justify the ongoing cost of renting a premises.
If you start at home, make sure that you’re not breaking any local zoning laws or health regulations.
Many areas have specific rules governing food preparation for sale, including requirements for commercial kitchen facilities and permits.
🏭 Rent a kitchen
If you’re ready to move your business to its own facilities, consider renting a commercial kitchen with cleaning services and storage facilities included.
You could also explore renting facilities from local catering businesses or restaurants during off-peak hours, which can be more cost-effective.
An additional option is partnering with another food entrepreneur to share a commercial kitchen, which is more affordable than renting alone.
If you’re expanding an existing restaurant with an established kitchen setup, you may not need to secure additional space.
🤝 Get help from incubator kitchens
Incubator kitchens are specifically designed to help food startups. Similar to entrepreneur organizations, they offer mentoring, networking opportunities, and shared resources.
Most importantly, they typically offer you full use of their commercial kitchen facilities and high-quality equipment.
As an example, have a look at the Incubator Kitchen Collective, which supports meal prep entrepreneurs around Northern Kentucky.
Choose Your Suppliers
Once you know where you will work, it’s time to gather all the ingredients and packaging materials for your meal prep kits.
Bad suppliers can cause delays, poor food quality, and unhappy customers, which can hurt your business.
When selecting suppliers for fresh food, packaging, and equipment, keep the following in mind:
🚚 Reliability and consistency: Choose suppliers known for their reliability and consistent delivery schedules to avoid disruptions in your process.
🚚 Cost-effectiveness: Compare prices from different suppliers to ensure you’re getting the best value without compromising quality.
🚚 Eco-friendliness: Consider eco-friendly packaging options to appeal to environmentally conscious customers.
🚚 Compliance: Ensure the packaging complies with local health and safety regulations to keep your business in good standing.
🚚 Quality and durability: Invest in high-quality, durable equipment that can withstand the demands of your operations.
With the best suppliers on standby, your meal prep business will consistently deliver top-quality food to your customers.
Choose a Delivery Method
Deciding how to get the food to your customers is one of the most important decisions you will make.
Here are some options to consider:
🚚 Sell your meals through an app that offers food delivery – like Deliveroo or Uber Eats.
🚚 Hire your own delivery drivers.
🚚 Use a driver agency like GigSmart
🚚 Deliver via a national courier like UPS
🚚 Require customers to come to you
🚚 Do it yourself
All of these have pros and cons and will suit different businesses.
It’s important to do your research to ensure whoever delivers your meals can keep them protected and at the correct temperature.
Get the Right Permits and Licenses
Running a business means meeting regulatory requirements.
Here’s what you need to focus on:
Food business licenses
Every state has different requirements for food businesses, so you need to research the regulations where you plan to operate.
For example, California’s Cottage Food Law allows individuals to prepare and sell certain low-risk foods from a home kitchen.
To comply, you need to register your business entity with your local health department, complete a food safety training course, and ensure your kitchen meets specific health and safety standards.
In New York, you need a Home Processor Exemption, which requires you to adhere to specific food labeling guidelines and pass a home kitchen inspection.
Make sure you understand and follow the regulations in your state. This will ensure legal protection for your business and keep it running smoothly.
General business licenses
You’ll also need to secure licenses to run a business more generally. This will depend on a number of factors but could include:
- Business License
- Employer Identification Number (EIN)
- Seller’s Permit
Environmental health licences
Food-handling businesses need to meet certain standards to protect customers and employees from unsafe or unhealthy conditions or situations.
Required licenses could include:
- Local health department approval
- Employee health permit
- Business health permit
Get the Right Business Insurance
You also need to protect your business against risks.
What happens to your business if it gets sued for food poisoning or transferring allergens to customers?
Without the right business insurance, a lawsuit can ruin your company financially. That’s why you need to take out cover for your company.
General liability insurance protects you against claims of bodily injury and property damage, while product liability insurance specifically covers you for issues related to the food you sell.
These are examples of the kinds of insurance that you need to look into as a food entrepreneur.
On top of this, you should also consider the following:
✅ Commercial property insurance: Covers damage to your business property, including your kitchen equipment and supplies.
✅ Commercial auto insurance: If you use a vehicle for meal deliveries, this covers accidents and damages related to business use.
✅ Workers’ compensation insurance: This is required if you have employees. It covers medical expenses and lost wages for workers who get injured on the job.
When choosing insurance, carefully consider your needs, shop around, and get several quotes before selecting a provider and insurance plan.
Set Your Pricing Strategy
Now that your business is legally compliant, insured, and ready to operate, it’s time to determine your pricing strategy.
While setting prices may seem straightforward, it requires thorough research and thoughtful consideration.
Simply picking a number won’t suffice; you need to find a balance that attracts customers while ensuring profitability.
When making this decision, ask yourself these questions:
🕵️ What profit margin do you need to sustain and grow your business? This is the amount of profit you must aim for to keep your business profitable and have the financial capacity to expand.
🕵️ What are the total costs for each meal kit? Calculate all expenses in preparing your meal kits, and add the desired profit margin to see how much you need to charge per meal to ensure profitability.
🕵️ How does your pricing compare with competitors in the market? Research what successful meal prep businesses charge and evaluate how your offerings compare regarding quality and convenience. If you plan to charge more than they do, make sure you can justify putting this cost on your customers.
🕵️ Is your pricing affordable for your target market? Understand how much your customers are willing and able to spend. Adjust your prices to fit their budgets, especially if you’re targeting specific groups like students.
By answering these questions, you can set a pricing strategy that covers your costs and profit goals while meeting your customers’ expectations.
Market Your Business
Simply starting a business won’t guarantee customers. You need to make people aware of your business and tell them how your delicious meals will enrich their lives.
To achieve this, you need a kickass marketing plan that effectively communicates your value proposition.
There are three ways to approach this:
- Do it yourself: You can research marketing tactics for a meal prep company and do your best to implement the suggestions yourself. This is the most cost-effective option and allows you to have full control over your marketing strategies and messaging. However, it requires significant time to learn and execute it effectively.
- Hire freelancers: You could onboard a freelancer who specializes in your preferred marketing channel, such as social media marketing or pay-per-click advertising. Freelancers are a cost-effective option, but they may not uphold the same standards as agencies, potentially compromising on quality.
- Hire an agency: Lastly, you could hand this task over to an experienced agency. This is the most expensive choice, but you will get a full marketing plan, a high standard of work and your meal prep company will be seen by many potential customers.
Your marketing strategy should be clearly outlined in your meal prep business plan, so try to have this sorted out before you launch.
Invest in good photography
While doing your own marketing is commendable, hiring a professional food photographer can significantly boost your efforts.
In the food industry, visual appeal is everything, and subpar or average photographs can cost you new customers.
Food photography is more complex than it may seem at first glance, often involving advanced techniques that go beyond simply taking pictures of food.
It also requires specialized equipment, such as additional lighting, reflectors, backdrops, and sometimes even props to enhance the presentation of the food.
Check out this video to learn more about the unbelievable tricks photographers use to make food look delicious.
🐠 How to get them hooked
A great strategy for meal kits is to offer free samples that will allow your customers to see first-hand how wonderful your service is.
For example, if you have weekly fresh food meal kits delivered to health-conscious customers, offer them “Free Meatless Mondays” for their first three months to help them convert more easily.
Use social media
When you start out no one will have heard of you. So how can you get your first few sales?
Family and friends are the best place to start, but you can’t rely on them forever.
Social media platforms are one of the most affordable and effective ways to market a new meal prep business.
Here’s why:
✔️ Precisely target your ideal customers by interest, area, age and more.
✔️ Show them mouth-watering images of your dishes.
✔️ Allow customers to follow your brand so you can engage with them more in future.
It’s important to consider what social media platforms your target customers use the most.
For example, if your target market is older customers then Facebook is a good idea, while Instagram and TikTok might be better for younger audiences.
In Conclusion
Starting a meal prep business demands time and dedication.
From refining your business concept and branding to navigating local regulations and crafting an effective marketing strategy, there’s a lot to manage.
Now that you know how to start a meal prep business, you need to decide where to begin.
If you’re looking to streamline your entry into the market, consider Subbly for launching a subscription-based meal prep service.
This is by far the most effective business model as subscriptions guarantee you long-term profit and a sustainable business for as long as you continue to delight your customers.
With Subbly, you get a professionally designed website, recurring revenue opportunities, and satisfied customers.
We even have specialized bundles for meal prep businesses that encourage customers to increase their baskets with strategically placed discounts—see what this looks like here.
Contact us today for a 14-day free trial and see whether it’s the right fit for your venture.
