Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on April 10, 2023 Updated on February 14, 2024
$43,900 - $88,000
$273,750 - $547,500 p.a.
Time to build
$54,750 - $109,500 p.a.
Hitting the deli for lunch is a daily ritual for countless office workers, who can always find time to fit a Reuben or tuna sandwich into their busy schedule. That’s what makes the global deli industry so large, more than $300 billion.
If you’re good with meats and cheeses and creative in the kitchen, you could come up with unique sandwiches and salads to serve in your deli, delight diners, and make a good living.
But in addition to creative food ideas, you’ll need some real business savvy. Fortunately, this step-by-step guide details exactly how to launch and run your successful deli business.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Now that you know what’s involved in starting a deli, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.
Analyze your competitors
Research delis in your area to examine their products, price points, and customer reviews.
Make a list of delis that offer similar products.
Review your competitors’ products – their features, pricing, and quality – and marketing strategies
Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
Identify your competitors’ strengths and weaknesses.
This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.
Why? Identify an opportunity
You’re looking for a market gap to fill. For instance, maybe the local market is missing a deli that makes homemade rye bread or that serves hot food options like potato pancakes or grilled cheese.
You might consider targeting a niche, such as prepared deli trays or sandwiches made with freshly baked bread.
This could jumpstart your word-of-mouth marketing and attract clients right away.
What? Determine your deli products
The possibilities for products that you can offer at your deli is endless and include:
Selection of sandwiches
Pasta, potato, tuna, egg, and vegetable salads
Meats and cheeses by the pound
Hot prepared meals
Breads and pastries
You could add a bakery section and offer desserts, or a small wine shop. You might even have a small restaurant section where customers can dine in.
How much should you charge for deli products?
You’ll base your prices for various products on market prices, but also on your costs of ingredients and your other costs.
Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market largely depends on your location. If you’re in an area filled with college students and young professionals, you might zero in on TikTok, Instagram, and LinkedIn.
Where? Choose a deli location
You’ll need to rent a space for your deli, preferably in an area with high traffic for lunch, such as a metro area. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Central location accessible via public transport
Ventilated and spacious, with good natural light
Flexible lease that can be extended as your business grows
Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Deli Business Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
Short, unique, and catchy names tend to stand out
Names that are easy to say and spell tend to do better
Name should be relevant to your product or service offerings
Ask around — family, friends, colleagues, social media — for suggestions
Including keywords, such as “deli” or “delicatessen”, boosts SEO
Name should allow for expansion, for ex: “Diverse Delights Delicatessen” over “Pastrami Paradise”
Avoid location-based names that might hinder future expansion
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation.
Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward.
Step 4: Create a Deli Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
Executive Summary: Provide a brief summary of your deli business plan, highlighting its key features and what sets it apart.
Business Overview: Describe your deli business, including its location, type of cuisine, and the dining experience you aim to offer.
Product and Services: Explain the menu items you’ll serve, such as sandwiches, salads, and beverages, and any additional services like catering or takeout.
Market Analysis: Analyze the local market for delis, considering factors like customer preferences, demographics, and potential demand.
Competitive Analysis: Identify other delis or eateries in your area and explain how your deli will differentiate itself in terms of food quality, pricing, or unique offerings.
Sales and Marketing: Outline your sales and marketing strategies, which may include promotions, partnerships with local businesses, and online advertising to attract customers.
Management Team: Introduce key team members involved in the deli’s operation, emphasizing their experience in food service or restaurant management.
Operations Plan: Describe how your deli will operate daily, from food preparation and service to staffing and inventory management.
Financial Plan: Present financial projections, including startup costs, pricing strategies, revenue forecasts, and expense estimates for your deli business.
Appendix: Include any additional materials, such as sample menus, photos of the location, or testimonials from taste tests, to support your deli business plan.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to delis.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your deli will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. Here’s how to form an LLC.
C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. Read how to start a corporation here.
S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best option, other than friends and family, for funding a deli business. You might also try crowdfunding if you have an innovative concept.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You’ll need to check with your state and local governments for health and food service license requirements. You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your deli business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
Business Property: Provides coverage for your equipment and supplies.
Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
Worker’s compensation: Provides compensation to employees injured on the job.
Property: Covers your physical space, whether it is a cart, storefront, or office.
Commercial auto: Protection for your company-owned vehicle.
Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Toast, eHopper, or Lavu, to manage your menu, inventory, online pickup orders, and customer loyalty program.
If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Create a website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales.
Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Place Order”. This can sharply increase purchases.
Here are some powerful marketing strategies for your future business:
Loyalty Programs and Specials: Implement a loyalty program to reward repeat customers, and regularly offer specials or discounts on popular items to keep customers excited about returning.
Engaging Social Media Presence: Leverage social media platforms to showcase mouth-watering food images, behind-the-scenes glimpses, and engage with your audience. Encourage user-generated content by running contests or asking customers to share their favorite deli experiences.
Themed Events and Promotions: Organize themed events or promotions, such as a “Sandwich of the Month” or a weekend brunch special. This keeps your menu exciting and gives customers a reason to visit regularly.
Community Involvement: Engage with the local community by sponsoring events, participating in festivals, or supporting local charities. This not only fosters a positive image but also creates a sense of community around your deli.
Online Ordering and Delivery Services: Ensure your deli is easily accessible through popular food delivery apps. Offering online ordering with efficient delivery services can significantly expand your customer base.
Create a Signature Dish: Develop a signature dish that sets your deli apart. Whether it’s a unique sandwich, a special sauce, or a signature side, having something exclusive can create buzz and attract curious customers.
Customer Feedback and Reviews: Actively seek and showcase customer reviews. Positive testimonials build trust, while addressing negative feedback publicly demonstrates your commitment to customer satisfaction.
Themed Nights or Classes: Host themed nights, like a trivia night or live music, to create a lively atmosphere. Consider offering cooking classes or workshops related to deli cuisine to engage customers in a unique way.
Local Business Partnerships: Partner with nearby businesses for cross-promotions. For example, collaborate with a local coffee shop for a breakfast combo deal or share promotional materials in each other’s establishments.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your deli meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your deli business could be:
Delicious sandwiches, custom-made to perfection
In a hurry? Grab and go the city’s best sandwiches
The best meats and cheeses in town
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a deli business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in delis for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in delis. You’ll probably generate new customers or find companies with which you could establish a partnership.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a deli business include:
Counter Clerk – take orders, customer service
Sandwich and Food Preparer – prepare sandwiches and other foods
Baker – bake breads and other bakery items
General Manager – scheduling, inventory management, accounting
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Starting a deli takes some capital, but it’s a great way to put your culinary skills to work. You’ll also meet new people every day, and if they love your food, they’ll keep coming back for more.
Once your deli is successful, you could expand and open outlets across your town, even your state and beyond! You’ve got the 411 on the business side of things now, so it’s time to get to work and launch your new deli.
Deli Business FAQs
Is a deli profitable?
A deli can be very profitable. You just need a great location and some creative sandwich options.
What is the growth potential of a deli?
A single location deli could grow by expanding their products to include baked goods or even wine. It can also grow by expanding to different locations or creating a deli franchise.
Can you start a deli on the side?
A deli is best started as a full-time business. It takes a lot of time, work, and dedication to be successful.
What sells best in a deli?
Fresh sandwiches are always popular, but customers may also buy deli meats and cheese by the pound, prepared meals, and loaves of fresh bread.
How to Open a Deli
Decide if the Business Is Right for You
Hone Your Idea
Brainstorm a Deli Business Name
Create a Deli Business Plan
Register Your Business
Register for Taxes
Fund your Business
Apply for Deli Business Licenses and Permits
Open a Business Bank Account
Get Business Insurance
Prepare to Launch
Build Your Team
Start Making Money!
Deli Business FAQs
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