Build, buy or borrow? How to choose the right digital ordering solution for your restaurant
Like it or not, restaurants and technology go hand in hand these days. Knowing what technology you need and how to get it is all part of the job.
But most restaurateurs are passionate about food, not technology, and don’t know where to start when it comes to choosing the best software for their business. There are a few ways to approach the decision making - build it, buy it or borrow it.
What are the options?
The biggest advantage of developing your own custom software is that you get exactly what you want. The problem is it can be a very complicated and expensive undertaking. It involves hiring skilled (and expensive!) web developers and could take a long time to complete. In the context of online food ordering, this would be a large project of building the entire system from scratch and then integrating it with your website, app or other platforms.
You can buy software from a specialised tech company. This is known as ‘white label’ or ‘off-the-shelf’ software. While it’s not fully customised for an individual business (as with the build option), it can be integrated with other software solutions and allows restaurants to operate under their own brand, on their own website and app.
For restaurants, takeaways and cafés, borrowing generally means signing up with aggregator platforms. Also known as food delivery marketplaces, they sit between the restaurant and the customer in the buying process, offering access to various restaurants and cuisines through a single platform (usually a mobile app). In terms of a software model, you are borrowing in the sense that you use their platform as a third-party provider, rather than having your own ordering system.
What do you need?
Consider all the key factors that go into making your decision. Here’s a few to think about:
Start by listing your requirements, this is fundamental to your final decision. What problem are you trying to solve? What do you need the software to achieve specifically? In basic terms, you need to put a menu on digital platforms and process orders. After that comes brand building, marketing activities and customer loyalty initiatives. Consider how the different options can meet these requirements.
Beyond meeting the basic needs and solving a certain problem, you want to choose the solution that brings you the biggest benefit. Which one has the biggest upside and potential to drive long-term growth for your business? That means looking beyond short-term sales and considering which ones provides a sustainable model.
Cost is one of the biggest factors to consider. The true cost of each scenario may not be immediately obvious as you need to take the different kinds of expenses into account. Building complex custom software demands big up-front costs on the development work, whereas buying or borrowing is more about the ongoing fees/commissions to the platform provider. You need to understand how these charges are calculated on the different platforms and how this will affect your revenue going forward.
Do you need it fast? This has certainly been the case for many restaurants since COVID-19. If time is limited, be realistic about what’s involved and how quickly you can roll out a solution. Building your own in-house custom software usually involves a significant time commitment.
Things can go wrong. The nightmare scenario is spending big money on software that fails to meet your needs sufficiently, has lots of troublesome bugs and provides a substandard service to your customers. Another risk is losing control of your own brand. Be careful not to leave yourself open to these kinds of scenarios by going for the cheapest or quickest option.
What’s most important?
Prioritise your list and focus on the ‘must haves’. For example, if you have a hard deadline that makes time the key focus. Similarly, you might have a limited budget for the project, so cost becomes a central point - it usually is for most businesses!
Doing a cost-benefit analysis is a great way to understand if the software provides a strong return on investment. Consider how it fits with your overall tech stack and works with any other software you use. In the end, it’s about finding the solution that meets all your needs, helps to grow your business, and can be delivered on time and within budget.
In any industry, building custom software is only worth considering if it puts you well ahead of your competition and the business is big enough to warrant the significant investment involved. Even then, it may not be the best approach. For most restaurants, it’s simply not even an option because of the money, time and complexity involved.
Lots of restaurants and takeaways list their business on marketplaces. It’s a quick and (on the surface) easy decision. But there are major pitfalls. Not only do the marketplaces take up to 30% commission on every order, draining huge amounts of money away from your business, they also damage your brand by coming between you and your customers.
They keep your valuable data and use it to grow their business. You lose the opportunity to build customer loyalty. The marketplaces are designed to grow their own brand and profits, not yours.
There are a lot of factors to consider when deciding between an off-the-shelf software solution, custom build or third-party marketplace for your restaurant. Take some time to weigh up the pros and cons. Consider the time, money and resources it will incur, along with the long-term benefits.