How to start an organic produce home delivery business
Hi there. This is a 'live' document and a work in progress, so it may have typos or grammatical errors :)
This is meant to be a basic overview of what you should start thinking about if you are serious about starting a produce delivery business.. it's kind of like a crash course. It's not legal advice. We are not lawyers. These are just observations and bits of things that we've seen over the years.
Ok, with that said, here we go!
Pick a name
Choose a business name. It's helpful if you are clear and include 'delivery' or 'organic' in your business name. Unless you are operating on a national level, it's also useful to use the name of your local delivery area in the business name as well.
Register the domain. If you picked "Webster Organic Delivery" as your business name, use a domain registrar like dynadot to see if the domain name websterorganicdelivery.com is available. If you're confused on this step, just let us know and we will register your domain on your behalf.
Make sure your domain uses .com. Don't use .net, .org, .us, or anything else. People still have trouble recognizing that anything that doesn't end in .com is a website.
Get a Logo
When creating your logo, try to imagine what it will look like printed on the sides of boxes, or on a t-shirt, or on a hoodie, or on your website. Don't use too many colors. There are some online services that you can use to get started like https://logojoy.com/.
If you hire a designer, make sure they've done logos before. You'll need the final product to be a VECTOR image, that way you can resize it to fit on giant banners, on vans, or shrink it to fit on the web- a vector image won't lose clarity. Use a clear (transparent) background too. Your designer should know all this though.
Once you have your logo, get some shirts printed up that your logo and domain on them, and wear them every day :) Talk to every single person you see and tell them "Yes, this is my company, let me tell you about it!"
note... we don't do logo design work anymore
You don't want people calling your personal cell phone day and night, do you? So you need a business phone number. You have a few options:
- Use Google Voice and install the app on your phone. It's free/cheap, and you can port the number out in the future when you get an office.
- Buy a second phone
- Use another online service like vonage
REMEMBER- this is the only number you should use when talking to your customers or suppliers. Keep your personal number completely separate and private.
Now you have to make the business legit. Visit your local town hall or use resources online to register your business. A lot of people will register as an LLC when starting out. Check with your local governance to see if you need a resale permit, any special licenses, or anything else. The governmental requirements can vary greatly depending on where you live, so do your research locally.
Get out the map! Choose your initial delivery very carefully. The #1 mistake we see here is new companies opening with HUGE delivery areas. It makes no sense to drive 30 minutes for 1 delivery. You want dense areas where you can deliver 10 or more boxes per hour. Look at a map and figure out the zip/postal codes that you will be delivering to- if you need help, we have a tool that will let you see all the zip codes in a given radius on a map.
Get a bank account. Now that your business is official, it needs a business bank account. If you can, try to use a local credit union and avoid going with one of the national chains. Support local!
This bank account is where you will pay your bills from, and where your revenue will be deposited. DO NOT ever use this for personal use- keep your grubby hands off the business bank account and ONLY use the business bank account for business expenses.
It's very important FROM DAY 1 to keep track of all of your business finances. If you can't afford a professional accountant or bookkeeper, sign up for Wave accounting the minute you get your business bank account. Never use your business account for personal expenses, and never use your personal account for business expenses.
We also have a basic bookkeeping feature that's included in the Kiva Logic software, but we still recommend using Wave Accounting instead.
One of the biggest mistakes we've seen new business owners is getting behind on taxes! Figure out your local tax rules and make sure you pay your quarterly taxes. Don't mess with the IRS, it's just not a good idea.
AND, once you can afford a professional bookkeeper/account, GET ONE.
Again, you'll have to do some research to see if your country, state, county, and/or town require you collect tax or VAT. This can vary greatly.. we've seen some towns collect a food tax and others don't.
Now you need a way to get paid. We recommend using stripe.com if you're in the USA. It's fast, easy, and you can create your account in about 10 minutes. Once your account is verified and active, all you have to do is add your API keys to the Kiva Logic software and you'll be ready to accept payments from your customers.
If you already have a merchant account, you might want to consider authorize.net, but it's a lot slower to set up.
We don't recommend accepting anything but online payments because it makes your life easy. You can accept checks/cash if you want though, it's up to you. It's just more work to keep track of and you have to enter payments manually if a person pays by cash or check. If they pay by credit card, then it's all automated in the Kiva Logic software.
Next you will need a website for your customer to shop! That's where we come in- go to kivalogic.com to create your free account, you get a 30 day trial! If you decide to go live, there is a $1500 one-time set up fee. After that we charge $1 USD per order on a weekly basis. When you grow to 1500+ orders per week, contact us and we'll set you up with Enterprise pricing.
Once your logo has been made, shoot an email over to [email protected] and we can help customize the look of your new ecommerce website that runs on Kiva Logic- it's included in the set up fee!
Time to get REAL email! It looks very unprofessional if you use an email address like '[email protected]' to talk to your customers, so we recommend using either google apps (now called google for work) which costs $5 per month, or use our personal favorite runbox.com, where you can get an account for around $40/per year.
Once you've done that, create a dedicated customer service email account like "[email protected]".
If you're confused at this step, don't worry- we can help here too. Just ask us.
You need somewhere to pack your boxes and for farmers/distributoers to drop off the fruits and veggies. When you're starting out, you will only be delivering one day a week, so you need a space that:
- has a loading dock for trucks
- you can store boxes and other packaging materials
- preferably an industrial sink
- is clean!
Nothing fancy necessary when you are just getting going. REMEMEBER you have to keep your overhead as low as possible when you're getting started, so if you can find a situation that doesn't require you to have a huge warehouse rental payment each month.. go for it! See if you can 'borrow' space from other local businesses.
You can tell them that you just need the space for one day a week, and typically only for a few hours on a weekday morning when you receive the produce and pack the boxes. That's all you need it for!
As you grow, you can look for a more long-term home for your company, but getting started you really don't need much.
Yes, even in 2017, you need business cards. Keep them simple, put your name, business phone number, and warehouse address on it, along with your business email address. Hand these things out like they're going out of style!
This is important! What if you deliver a head of lettuce and one of your customers said it made them sick? What if one of your drivers hits a customer's fence with their car? Go find a professional insurance broker and make sure you are covered from day #1.
Find as many local farms as you can and tell them you want to buy their produce. This involves a lot of relationship building.
Because your local farmers probably don't grow bananas, and there's a good chance they don't grow year-round, you're also going to need a produce distributor to order from like Albert's Organics, Global Organics, or Greenleaf.
You'll have to fill out some paperwork with them and you probably won't get net terms starting out, which means you'll have to pay for your produce on delivery or before delivery. After you've established your business you can then ask them for 'net 7' or 'net 30', which just means you have 7 or 30 days to pay each produce bill.
Take a look at "how to pack a box of produce" for some packaging ideas, we won't go into it much here since that page covers the basics.
Starting out, you'll probably want to deliver the boxes yourself to save money. As you grow though you'll need help delivering! Try hiring drivers off of Craigslist as contractors if you must, but we recommend having part-time employees and providing a vehicle for them to drive.
Starting out, you'll only be delivering one day a week. As you grow, you can expand to multiple days to handle more deliveries. When you deliver multiple days though, there are other things that come in to play like keeping the produce fresh with a walk-in cooler.
When picking your delivery day, the biggest factor will be when your Distributor delivers to you. Preferably, have an early morning delivery so you can pack and deliver it the same day. If your produce is delivered the day before delivery, your are going to need a walk-in cooler to store it.
What's your story? Why are you doing this? Who are you trying to help? You're going to need to think about those things and how you will communicate them to your customers. At a minimum, you should have an 'about us' and a 'how it works' page where you have pictures and tell your story.
Think about why a News station or newspaper writer would want to feature your business. What makes you special or stand out?
Keep it simple. Offer a Small box, and a Large box. Your small box should be priced around $30 +/-$6, and your large should be closer to $50. Don't get silly with the names, just keep it simple.
As you grow, look for more local products to offer to your customers. The best ones to start with are the staples: milk, bread, eggs. After that, you can add cheese, meat, and more. The more staples a customer gets from you- the better. This will make it harder for them to want to cancel their subscription to your company.
Homework time! Start looking at the websites for Space Girl Organics, Doorganics, and any other produce delivery companies you come across to see what they put in their boxes each week. This will start to give you an idea of what you should put in your menu. Study them! Make spreadsheets!
Each week you will be building a menu for your customers based on what's fresh, local, delicious, in-season, etc etc.
Time to GO LIVE! You'll have to pick a week that you will officially begin delivering. Once that's done, you can take your new website live, courtesy of Kiva Logic, and start marketing and spreading the word. Customers will now be able to sign up.
First Delivery Day
Kiva Logic provides driver sheets, labels, pack-order printouts and more to help your warehouse operation operate successfully.
Your first delivery day should go smoothly, since you have prepared for it well. Your produce will arrive from your farmers and distributors, you'll pack all your boxes, and you'll deliver them to your very excited customers. Congratulations!
And on and on
Rinse, wash, and repeat. From here on out it's up to you to keep pushing your company forward. Find new ways of getting customers. Learn everything you can about marketing and advertising. See what changes you can make to improve your customer service and your product.
Also keep in mind that this is a very basic guide to bootstrapping your business, and as you grow you will be able to do very exciting things like buying a fleet of vehicles, having your own office/warehouse and more.
It's a never ending battle, but if you're all in you WILL succeed.
And of course, we're here to help. The founder of Kiva Logic has also co-founded seven organic produce delivery companies and has helped dozens of people start their own business, so if you have any thoughts to share or questions shoot an email to [email protected]