Nearly 171 million people in the U.S say they eat fresh cold meat from their local deli at least once in the previous year.
Opening a deli has many advantages especially if you’re passionate about food and serving your community. Not sure how to start the process?
Don’t worry, we’ve got you covered. Here’s everything you need to know.
Plan Your Business
Not sure how to start a deli business?
The first step is to create a clear business plan to help you map out specifics of your establishment. For instance, figure out who your target market is, the startup or ongoing costs, and what you will call your deli.
Once you’ve decided on these, then you can direct your focus and establish your business.
Form a Legal Entity
You must form a legal entity to open a deli to legally protect you should a problem arise. This means if you get sued then your personal accounts will be protected and you’re not personally liable.
Out of the legal entities, you can choose to be a corporation, LLC, or DBA.
Register for Taxes
Once you’ve established the business as an LLC, you must register for state and federal taxes.
Then apply for an Employee Identification Number (EIN) on the IRS website via mail so you can get started. Only then, you can figure out how to open a deli.
Open a Business Bank Account
“How to start a deli?” You ask.
Again, for personal protection, you must open dedicated banking and credit accounts to separate your assets. Plus, it makes accounting and tax filing much easier.
When you start a deli with a business credit card then it builds the company’s credit history, useful if you want to raise money later on.
You must constantly record your expenses and sources of income so you can keep track of the financial side of your business.
Apply for Necessary Permits and Licenses
Depending on your state, you’ll need necessary licenses, permits, and insurance to run a food business. For instance, your employees may need a specific food-prep certification to prove they know about food-safety issues like storing raw meat.
Because you sell food, you’ll need a license from the local health department and pass a health inspection.
You should establish relationships with food vendors so they can supply the ingredients for your menu. Consider spending more on high-quality products as it will entice customers to keep coming back.
Decide whether you want to sell alcoholic beverages because you’ll need a liquor license from the state. Remember, if you fail to get these permits or licenses, you’ll get hefty fines or your business will be shut down.
Get Business Insurance
Deli insurance is as important as licenses and permits because it lets you operate safely and legally. This insurance will protect your company’s finances in case of an accident.
Consider a General Liability Insurance, the most common one, as it covers most small businesses.
Find the Deli’s Location
A large amount of the start-up capital will be securing a lease for your deli. Even though it’s tempting, buying the building is high-risk because you don’t know how well your deli will perform.
You must find a location where there is a lot of foot traffic at lunchtime during the week. For example, set up near office buildings, hospitals, or schools where many people need a quick, inexpensive meal.
If the location was previously used as a deli then that’ll save you splurging on merchandising equipment otherwise you must lease it on a monthly basis.
Learn How to Market Your Deli
Delis make most of their profit from returning customers. This means you must source high-quality products, sell them at a fair price, and serve customers as quickly as possible.
Plus, most deli customers live or work within walking distance of the establishment so you may need to create a marketing campaign to attract local leads.
You should also target people who may have diet restrictions. For instance, 25% of millennials in the U.S are vegetarian or vegan so be creative with your menu.
It’s important your deli has a strong online presence including a website and social media channels so you can reach new audiences.
Your deli should also try promotional events. For example, give passers-by a chance to taste your food and they’ll most likely buy a product as a result. In fact, 75% of customers said they’re more likely to make a purchase after receiving an incentive.
You could also create a sandwich unique to the business and offer a gift card to a customer who creates the best name. Or host a cooking class over the weekend so you can spend time with your customers to strengthen your relationship.
Loyalty programs are also a fantastic way to build a strong customer base. For example, hand out a punch card when a new client makes a purchase.
This means whenever they buy an item, they get a “punch” on their card until they complete it and get a free item or special promotion.
If you have the budget, you can create an app as customers may forget to bring their punch cards. Apps record the rewards number, perfect as most people carry around a smartphone.
That’s Everything About Opening a Deli
Now you know everything about opening a deli from start to finish.
You must establish your deli as a legal entity, set up a business card, get insurance, and learn how to market your deli. Focus on serving high-quality food and run promotions so you build a loyal customer base. Good luck!
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