Is a Meal Prep Business Profitable?

I may earn money or products from the companies mentioned in this post.

We started our prepared meal delivery business over 15 years ago. Since then, that business has supported our family of four. In this article, I’m going to share some of the details about how much money we make with our meal prep business.

Is a Prepared Meals Delivery Business Profitable?

A Meal Prep Delivery Business can be very profitable. With profit margins much higher than those of restaurants, you can make a comfortable living with much lower monthly sales.

With our first-hand experience, we can say without a doubt that a meal prep business can be very financially rewarding, but there are many factors that go into how profitable such a business can be.

Let’s dig into some of the factors that will affect how much you can make with your own meal prep business.

How Much Can You Make An Hour With A Meal Prep Business?

There are so many factors that are going to affect your hourly wages in a meal prep business, but if we generalize we can break them into three categories.

Expenses
Sales
Efficiency

If you can keep your expenses low, your sales high, and work efficiently you can make $20 to $50 an hour in your meal prep business.

Our Personal Experience

I’m going to briefly go over each of the general elements that we focus on to keep our wages high.

Keep Expenses Low

We have designed our business to keep our expenses very low.

Our business is run out of a State-Licensed Commercial Kitchen that’s located in our walk-out basement. Our kitchen is inspected just like the restaurants in our area, but instead of paying rent for the kitchen, we’re making a mortgage payment on our home.

Not only does that help keep our expenses low, but it provides us a tax benefit in that a portion of our home expenses are considered business expenses. I’ll write an article on that later, so be sure you’re on our email list so you know when it’s published.

Next, we keep our expenses low by not having employees. Running our prepared meal delivery business is what my wife and I do full-time. Sure, this means that sometimes we work longer hours, but at this time I’d rather increase my own wages and simplify my life by not having the challenges that come with having employees.

Finally, we’ve designed our business to have nearly zero food waste. We take orders first, then shop for ingredients. This is a tremendous advantage over restaurants, and because of that our profit margin on each meal is significantly higher than that of most restaurants.

There are lots of other strategies that we use to keep expenses low surrounding ingredients, packaging, delivery, and more. However, each of these has a much smaller impact than the three above.

Keep Sales High

We have a target number for total weekly sales that we need to hit to make sure we’re making at least $20 an hour and have what we need to cover our household needs.

We haven’t missed that sales target in at least ten years. Most weeks, we are about 50% over that target number.

We reach our target with a very limited advertising budget (also keeping our expenses low). We have a fully developed promotions strategy that will someday be an online course, but in general, it includes:

Google Ads
Email Marketing
Facebook Page
Customer Relationships

When we started our business, we started as Personal Chefs. That means that we cooked in our clients’ homes. This allowed us to build a customer base before we added the expense of a commercial kitchen.

With that established customer base, we could take on the expense of our nicer home in the country (with a business kitchen included) without fear.

Learn About The Small Business Startup Timeline

Be Efficient In Your Prepared Meal Business!

Some weeks we make $20 an hour. On other weeks we can make as much as $50 an hour!

But why such a wide variance? It’s all efficiency.

Keeping our expenses low and our sales high get us to our minimum of $20 an hour. Efficiency gets us above that.

That means having a good system that saves you time throughout your work week. That includes being efficient in:

Designing Menus That Work Together
Taking Orders
Creating Shopping Lists
Managing Clients
Shopping For Ingredients
Cooking!
Packaging
Delivery
Bookkeeping

Most weeks, our individual wages are at about $30 an hour. But when we get it right, we can make more. When we make mistakes, we’re closer to $20 each.

Our years of experience have given us lots of tricks and hacks to make our work week efficient (something for another course).

We’ve even developed proprietary software that manages our customers, menus, shopping lists, and more.

If you are interested in learning more about how we run our meal prep delivery business, be sure that you’ve signed up for our email list. We really would like to be your guide as you start your own home-based food business.

Does Scale Affect Profitability?

We’ve chosen to keep our business pretty small scale because it’s less complex and simplicity is something I highly value in my life.

I’ve had employees in the past and discovered that I didn’t enjoy having lots of employees. Employees added complexity and stress to otherwise simple businesses.

Our smaller meal prep business makes enough that it can easily support our family with both my wife and I working in that business full-time.

Yes, sometimes we work more than 40 hours a week, but we’re working those hours in the comfort of our own home.

We also have way more flexibility in when we work those hours. That means that if our kids have an afternoon event, we never have to miss those. We’ll just choose to work in the evening instead.

I absolutely believe that you could run a profitable meal delivery business at a large scale. At a large enough scale, you could have employees to do most of the cooking and delivery, and you could just focus on running the business.

At those larger scales, you’re going to have a lot more expenses which means that you’re going to need a lot more sales. It also means that a slow week is going to hurt a lot more than it does at my scale.

If your dream is to run a big meal prep business, go for it! I’d strongly recommend that you start smaller and only expand when you have the business and experience to add expenses without great fear.

You can always scale up in increments, but scaling down is always painful.

Learn More About The Small Business Startup Plan

Conclusion

As you can see, we’ve run a profitable prepared meal delivery business for many years. With my wife and I running the business alone, we support our family and have time for passion projects like FoodBusinessPros.com.

We believe that you can succeed with a home-based food business too, and I want to be your guide.

You can make a living in a food business, or if you choose, you can have a side income with a part-time foodie gig. I want to help you achieve your dreams without having to slog through the learning curve and mistakes that we made over the years.

You deserve to live your dreams!

If you want to hear more about home-based food businesses, be sure to signup for our email list.

Your Foodie Friend,

~Stacey

P.S. If you want to learn more about how I can help you start or grow your home-based food delivery business, be sure to check out the Business Plan Template, Marketing Plan Template, and Consultations that I offer to people who are considering starting a Prepared Meal Delivery Business. If you want to give yourself the best chance for success, start with a Business Ready Self-Audit.