How To Open a Deli In 10 Steps: Checklist

The hospitality industry ranks as the second-most popular industry for small businesses. Yet, if you’re planning to open a deli shop and succeed in this highly competitive business, you must start with an impeccable plan and a brilliant execution.

Deli shops can also be very profitable businesses: if you run correctly, you can generate an average profit of around 10% of sales.  

If you don’t know where to start, we have laid out below a detailed guide on how to start a deli shop in 10 steps. Read on!

For more information on delicatessen businesses, make sure to read our guide below:
How Much Does It Cost To Open a Deli? Examples
How to Write a Business Plan For a Deli / Sandwich Shop

1. Research the Deli Industry

It’s the foremost and one of the most important steps to open a deli shop. Indeed, research will provide you with the data that will become your business’s supporting pillars. 

Your research must cover the following areas:

a) Competition

You aren’t the single person who’s planning to open a deli shop. It’s why you need to understand your competition. If your chosen location for your deli shop has 50+ deli shops already running in your 10-mile radius, you might not be able to thrive in the market for long. 

Plus, you need to have a clear understanding of the products and services of your competitors. For example: are they just a convenience store or do they also prepare food for customers? Do they have a sit-in area for customers or is this takeaway only?

To differentiate from competition, you might also need to offer unique products besides high-quality food and attractive prices to attract customers (what about a sit-in area for customers?).

b) Location 

Choosing the perfect customer-driving location is also essential. Suppose your preferred location has more of a working-class population with little to no time for cooking; you’ll have a steady flow of customers. 

These busy corporate hustlers will also not prefer wasting a huge chunk of their time enjoying a 3-course meal and are likely to prefer takeout delis.

c) Cost

Before opening your deli shop, you should have a clear idea of the one-off and recurring operating expenses for your deli shop. Indeed, wrong estimates can lead to disastrous losses.

Make sure to include these costs in your financial projections and business plan. See more on that below. If you haven’t done so yet, make sure to read our article on how to create accurate financial projections to successfully obtain a SBA loan for your business.

d) Target customers

Although affluent people may prefer fine dining, for the middle class, fine dining might only be  a once-in-a-while experience. 

Thus, knowing the purchasing power of the locality where you’re planning to open your deli shop will help you decide on the menu items. 

e) Competition

To stand out from the crowd of competition and earn more customers, you need to devise customer-acquisition strategies. Thus, you should be aware of your competitor’s strategies and devise your strategies accordingly. 

2. Select Your Deli Format

Once you have the most important data, you need to decide the type of deli you want to open. It might be a counter only, dine-in, food truck, and so on. 

You also need to select the food items which you’re going to offer to your customers. Selecting your deli format and food items will give you a fair idea on:

• Square footage of the space you’ll need
• Equipment & appliances you will need
• Raw materials you will need 

3. Pen a Solid Business Plan 

Once you’ve done your research and selected your deli format, it is time to craft a solid business plan to obtain financing. 

Your business plan must include important information such as:

• Market Analysis
• Selection of location (and why?)
• Menu selection
• Marketing strategy
• Financial projection, etc. 

A thorough and robust business model and a complete financial model provide clear directions for business in the upcoming months and help you acquire business funding. 

4. Select a Location for your Deli

Once your business plan is ready, you need to focus on finding the perfect commercial property (and location) where you will start your business. 

There are a few considerations that you must consider to find the best place and location for you, for example:

• Population & demographics data
• Purchasing power of the local people 
• Location proximity to the target audience
• Regulations & zoning rules
• Commercial space rental prices

5. Get Funding for your Deli

It’s one of the most essential steps before you can finally start your deli shop. The loan amount you’ll get for your business venture will vary depending on the location and size of your property and your business plan. 

Make sure that your loan at least covers the following:

• Cost for the premises (purchase or rent)
• Cost of equipment & furniture
• Cost of initial supplies
• Legal expenses
• Insurance & POS costs
• Utility bills, electricity 
• Operational costs for the initial 6-12 months 

Like any other new retail business, a new deli shop will typically take a few  months to generate profits. Thus, your initial funding should be enough to cover your operating expenses during these initial months. 

We have identified that it costs on average $54,500 – $141,500 to start a typical deli shop with 250 customers a day. Want to know more? Here is a detailed cost breakup you can expect.

6. Acquire Deli Permits & Licenses

Your deli business needs the necessary certifications, licenses & permits to operate. Avoiding them will lead to legal consequences and hefty fines. Specific fee structures are available for your business depending on your business structure, such as sole proprietorship, LLC, etc.

If you aren’t aware of the mandatory permits & licenses you’ll need, here’s a list you can refer to. Apply for your license and permits as soon as you get funding, as licensing takes time. 

7. Design the Layout of your Deli

Remember, a well-designed restaurant catches customers’ attention, whereas a poorly designed restaurant repels them. Your deli shop must be spacious with comfortable seating arrangements and inviting colors to draw attention and customers. 

Generally, deli shops have a recognizable and classic design. They usually consist of a long glass case where customers can submit their orders with a cashier & the POS system at one end. You may also add some additional display cases, tables, and chairs, depending on the size of your shop. 

While designing your deli shop layout, emphasize how you can make your space special. Try to find a color scheme and theme similar to your food selection. Also, ensure that the colors you choose must be bright and appealing. 

You must also include the customer pickup area and ticket system for advance orders. 

8. Purchase Equipment & Furniture for your Deli

Once the interior & exterior of your shop is designed, you need to shift your focus toward equipment, appliances & furniture. This can cost around $25,000, depending on your scale of operation. 

Here is a complete list of deli shop equipment you must be aware of. 

• Ovens
• Ventilation
• Grills
• Ranges
• Refrigerators & freezers
• Microwaves
• Toasters
• Food prep surfaces
• Food prep equipment (knives, pots, pans, cutting boards, food processors, mixers, storage containers, etc.)
• Safety Equipment (gloves, sani-buckets, date labels, bar rags, first aid kit, food-grade cleaning supplies, chemical safety data sheets, etc.)
• Sinks 
• Kitchen Display System
• Serviceware (utensils, display cases, table service essentials, paper boats, clamshells, plates, etc.)

The cooking and kitchenware will usually cost anywhere around $25,000. Also, you need to include some tableware, such as spoons, forks, glasses, plates, and so on. 

9. Select a Menu for your Deli

Assuming you’ve done your research, developed your concept, and are ready to start your deli shop setup, you need to focus on the food quality. Before welcoming customers to your shop, ensure that you provide the highest quality food and hire efficient and quality staff (we will cover this shortly).

Here are three simple ways to provide quality food to your customers:

a) Purchase Fresh & Quality Raw Materials 

Assuming that you’re opening a dine-in deli, ensure that the food you serve is fresh, unlike packaged food stored in cold storage units. Always try to get fresh raw materials from your local markets every day.

Although this task is enormous and time-consuming, you must commit to it as fresh raw materials ensure that your customers get fresh food. 

You don’t need to cherry-pick the freshest products from the local markets. All you need to ensure is to grab your raw materials and supplies daily. 

10. Hire Staff for your Deli

Finally, you’ll need to hire staff members before you can open your deli. In general, you’ll need:

• Deli clerks / cashiers
• Cooks
• Serving staff (if you offer sit-in)
• Shift leaders / manager 

The exact number of staff will depend on the size of your deli shop. 

Remember, the staff members you hire must have enough experience, and they should also know how to treat and greet customers pleasantly. They should be people-oriented people with excellent communication skills and social skills. 

Assuming you run a small deli shop with 4 full time employees (2x 8-hour shifts) with an annual gross salary of $28,979 (US average for deli workers), you should set aside around $15,000 – 20,000 per month to pay for salaries.