Ghost Kitchen is a leading business idea for restaurant owners and entrepreneurs planning to expand or start their own business. The customers are highly satisfied with the ghost kitchen concept that has put the restaurant owners in a space to rethink and accept the profitable business idea, i.e., “Ghost Kitchen Business.”
Those confused with the teams like ghost kitchen, cloud kitchen, dark kitchens, and virtual kitchen. These are interchangeably used terms for restaurants that are without dining space. Such restaurants focus on selling & fulfilling food orders received online for delivery using third-party apps like DoorDash, UberEats, GrubHub, or with their own delivery operation.
As per Statista, the global ghost kitchen is expected to become a $71.4 billion industry by 2027. After the covid-19 pandemic, the concept of ghost kitchen is far more profitable and convenient for restaurants that suffered loss during the lockdown period.
The top reasons why entrepreneurs and restaurants owners are in favor of starting a ghost kitchen business are:
Increased Efficiency: The concept of custom-build space and optimized process for delivery adds up to the efficiency of the ghost kitchen business.
Convenience: The concept of delivery-only makes it easy to manage and timely deliver the orders, as you no longer have to worry about on-site orders, cleaning tables, or any other issues related to restaurants with dining services.
Additional Revenue Streams: The concept of ghost kitchen adds a revenue channel by renting kitchen space to any external ghost kitchen business establishments. Another way to increase your revenue with the ghost kitchen concept is by launching a delivery-only spin-off from their own kitchen.
Flexibility: Ghost Kitchen business offers flexibility to adapt to frequently changing market conditions and customer changing preferences.
Other considerable advantages of Ghost Kitchen:
- Rising demand for the ghost kitchen delivery business
- Vast Market reach
- Seize the opportunity to target local vendors
Some other benefits are explained in the infographic attached below for more details about the popularity and reasons why ghost kitchens have become a top business idea.
How to start a Ghost Kitchen Business?
To get started with a ghost kitchen business, the basic steps that you need to follow as a part of your business plan before launch are:
a) Do market research to get a fair idea of market demand and scope of business success in the target market.
b) Define your concept that includes what will be on the menu, your competitors (if any), how to build/launch your ghost kitchen business? Etc.
c) Finding the space for setting up your kitchen and starting with delivery.
d) Deciding on which software to choose considering a number of factors to consider before selecting a ghost kitchen delivery software
e) Creating a marketing plan
Other strategies that you need to consider while starting a ghost kitchen business are:
- Creating the Menu for Delivery that covers all that you can offer
- Deciding the price considering the fact that there are a number of close alternatives available.
- Rent/Find a Location to set up your ghost kitchen
- Build your virtual brand
- Choose your delivery method (in-house delivery or a delivery company)
The Future of Ghost Kitchen Business
As per the current marketing situation, the concept of a ghost kitchen is popular. Several entrepreneurs and restaurant owners are adapting to the new change and have already shifted to ghost kitchens from offline restaurant businesses.
As per the report shared by Statista on the global rise of ghost kitchens:
- In the United Kingdom, Deliveroo, a leading food delivery platform, has been working with ghost kitchens since 2017 with the launch of their Deliveroo Editions program. In 2020, Deliveroo was the 3rd most used online provider of food delivery.
- The co-founder of Uber Eats, Travis Kalanick, who claims over 25% of the market share of food delivery companies in the US, has joined the ghost kitchen market.
- The US and UK are the two countries with a vast acceptance for ghost kitchen business.
The Challenges Ahead for Ghost Kitchen Business There are a few challenges that come along with the ghost kitchen business. Each business has some limitations that might or might not be a serious area of concern but are important to be considered. Below are a few challenges that you as a ghost kitchen business owner might have to face:
No walk-in traffic: restaurants that have recently shifted to a ghost kitchen business model will miss the advantages of walk-in traffic from their dining services.
Geographical restrictions: for a business like a ghost kitchen, the biggest challenge is geography contractions that allow a to serve in a single location of only a 3 to 5-mile delivery radius.
Reliance on third-party deliveries: the ghost kitchen business is fully dependent on third-party delivery platforms like GrubHub, Uber Eats, Postmates, ChowNo, etc.
These are a few challenges that you have to deal with in a ghost kitchen business other than day-to-day operational challenges and maintain your reputation by offering excellent food quality.
Wrap-Up
The concept of the ghost kitchen business has turned out to be a profitable business idea in the online food delivery industry. The restaurants that are not well equipped to handle a high volume of delivery orders might face certain challenges. But those who are with the capacity to handle orders can make good profits out of the ghost kitchen business and recover from losses caused by the COVID-19 restrictions.
As the situation is getting better after the COVID-19 pandemic, the customers look for more safe and quality services in the case of food delivery. Whereas to support your business idea and bring it to reality, there are a number of software available that helps entrepreneurs start their own ghost kitchen business. This is the perfect time to start a ghost kitchen business considering the success of already existing similar businesses and the noticeable growth of the restaurants that have recently shifted to the ghost kitchen business model.