Let’s get to some of the best practises that we’ve come across in this industry. In talking to a bunch of entrepreneurs in this industry, a bunch of people who are already operating in this industry. A few things which we’ve covered somewhat before, but we sort of emphasise some of these points. These are kind of things that you can only get through experience. So we just want to highlight some of these. First up and top, the list is location, location, location. So a classic phrase, basically, you want to identify the location in which you’re going to operate first. That’s your prime thing. That is going to be the thing which is going to have most influence on your success or failure. You want to survey the areas, the potential areas that you could set up in, and you want to find that which best fits the kind of model that you’re going to be operating. It’s important for you to have to think about, OK, which of these various models that we talked about before that you are going to operate? And that is going to trigger the next stage of all of this decision making here, which is what are the legal things that you need to get in place? And also what kind of products is it that you’re going to be offering the location and your business model is also going to influence your total addressable market, your team. That is the number of people that you’re going to attempt to try and sell to the biggest possible market size that you can operate in. Now, obviously, you want to be trying to get a market with the most people in as possible, but that fits into the model with the location that you’re talking about and interested in when you are trying to determine what your total addressable market is, the number of people in your catchment area, you want to look at the various locations where you could set up these kitchens. And what you want to do is you want to work out, okay, what is the circle with the max acceptable wait time for people who are ordering food. Now, that is, if someone if a delivery driver starts off on the edge of the circle and has come all the way into your location to pick up food and then pick it up and then go out to the edge of the circle again to deliver the food you want that round-Trip to be most 40 minutes, 40 minutes seems to be the. Point at which people get annoyed by the amount of time it’s taking to get hold of their food. You also take into account of seafood preparation time, different foodstuffs take different amount of time to prepare. So essentially, all of those points go into sort of drawing as a maximum radius circle of all of that catchment area in which you can ideally sort of serve your customer successfully. And once you’ve drawn that, you can work out how many people there are roughly living within that area. Does your circle cover mostly residential areas or are there large chunks of areas where people don’t live? You want to then choose your location based on maximising where that circle gets drawn. Next point here is diversity, diversity of product rather than a traditional restaurant. You have the options, opportunity to sell under more than one brand. You don’t have to have one singular shopfront with one singular name on it and have one singular menu. People don’t have to know or don’t need to know what’s going on behind the scenes. So you can have one kitchen that offers multiple brands. And there’s good opportunity here because you get economies of scale of using that singular kitchen to service multiple brands. You could sell higher priced items, fewer higher priced items, but across multiple brands. So the total number of high value food items that go out the door a greater because you are selling Chinese food items, you’re selling healthy items, you’re selling dessert items. You can be more things to more people and you can appeal to more people. It may well be that in a particular household, people are looking to order food. But one person was Chinese and one person wants McDonald’s and one person wants something else. You if you’re offering multiple brands, then you’ve got a great chance of server servicing more of those requests. And so you get a greater slice of the pie when it comes to revenue. As I mentioned before, you don’t want to be offering a full giant menu of items you don’t want, like a hundred Chinese dishes. You want to cherry pick the key popular items and you want to specialise. You want to have five, six, 10 items that are absolute key bestseller items that the vast majority of the people who want to order from you will want to order. That simplifies your life on the back and cooking it and then the logistics around getting the raw materials for the foods. It also maximises the amount of demand that you can capture. So you specialise. One way to increase the amount of revenue that you make per order is by complementing it with side dishes, sauces, drinks. Try and make extra revenue on upselling some of these extra items. Make sure you differentiate your offering when you go into a market. See what it is that people are already offering. There will be a million pizza places. There will be a million Chinese places.
Try and find things that other people aren’t selling, but that still would have a relatively high demand.
Oftentimes, a reason why something isn’t available on the local market is purely because there isn’t quite the demand to set up or to support the cost of a central large restaurant in an expensive area to rent. But that doesn’t mean that there isn’t enough demand that you can service them profitably from a much smaller lower rent or a lower cost base location. And also, when you’re the only one offering something in a market, then you can be the monopoly and you can capture all the demand for that thing in the market. Now, if you’ve got three brands offering completely new things in that market, then you’ve got three opportunities to capture three lots of different demand in that market. And have the total monopoly on those kind of things. A good way of doing this is by keeping an eye on trends for foodstuffs in other places, other locations like bigger locations. So if you’re setting up somewhere regionally in the U.K., it’s like, okay, well, what are people ordering in London on food? That’s what they ordering in Birmingham. Go and look at the big cities because there’s much higher, larger amounts of demand there than. People can be successful by setting up very fairly niche kind of foodstuffs. But these niche niche foodstuffs can then take off and become mainstream in those markets. So try and find niche foodstuffs which are becoming mainstream in those markets. Take those take the best sellers from those those that are being promoted. Most on those apps are likely to be a the trendiest ones, the ones that are on the upward slope, but also ones which have high demand and high volume. Take those off of those in your market instead and see if the same demand exists there.