How to Start a Ghost Kitchen? Everything You Need to Know

How to Start a Ghost Kitchen? Everything You Need to Know

How to Start a Ghost Kitchen

The COVID-19 pandemic has jolted the restaurant industry in an unprecedented manner. Restaurants around the world have been either forced to shut down or take a different route of takeout and delivery model to keep generating revenue. 

This model started a few years ago in the form of ghost kitchens or ghost restaurants. Ghost kitchens are not your typical eat-in restaurants. They don’t have chairs, tables, bars, patio, or host stands; but, they do have health standards to abide by, plenty of cooks, and a fleet of delivery couriers. 

This delivery-only foodservice model is perfect for existing restaurants to capitalize on their unused space or downtimes as they help scale the business, generate revenue via delivery demand, and create new business opportunities. 

While the benefits of a ghost kitchen are indisputable, starting a ghost kitchen can be quite challenging. Therefore, in this guide, we will share a few tips on how to start a ghost kitchen successfully. Let’s dive right in.

How to Start a Ghost Kitchen?

A ghost kitchen can be uncharted territory for many as it is a relatively new concept. For this reason, doing proper research on this subject is paramount. Nevertheless, let’s start with the first step. 

Step 1: Find a Perfect Space

Finding viable real estate is the first and foremost step to starting a ghost kitchen. As an owner, you need a place that has enough room, is within your budget, and facilitates seamless delivery to a nearby neighborhood. 

  • If you already have a kitchen, then opening a ghost kitchen might be perfect for you. The trick here is to compartmentalize your existing space according to your new ghost kitchen. For instance, you can allocate space for cooking, a space for easy pickup, and an outpost with your brand’s logo.

  • After that, find out the days or hours when your normal operations are slower and the dine-in guests are fewer. Take advantage of those slow times to enable delivery for your ghost kitchen, prevent your staff from getting overwhelmed, and ensure higher guest satisfaction. 

For those who don’t have a place to start a ghost kitchen, there are companies that offer ready-made commercial kitchens, sometimes with staff. This solves the challenges of no space and no staff and quickly gets the kitchen up and running. These commercial kitchens are super helpful for restauranteurs that are new to the concept of ghost kitchens. They serve as incubators and provide a low-risk way to start. These kitchens also provide pre-implemented tech, staff, and in-house advisory teams to ensure that you start your venture on the right foot. 

If you don’t want to invest in your own space and neither want to take the help of a commercial kitchen, the third option is to partner with a local hotel, restaurant, or catering company. Many hotels in the hospitality business have cut down working hours due to the pandemic and have partnered with ghost kitchens to keep the revenue stream alive by renting their space. 

However, this option is only ideal for experienced hospitality operators who know the industry inside out and have the ability to negotiate a good deal with the host kitchen, creating a win-win situation.

Step 2: Hire and Retain Delivery Couriers

As a ghost kitchen owner, timely delivery of the food is your bread and butter. In its absence, you’re limiting your bottom line. Fortunately, nowadays, thanks to white-label delivery services, setting up a driver pool for a ghost kitchen is incredibly easy. 

Orkestro, DoorDash Drive, and C3 are common names that can help your ghost kitchen if you want a “hands-off” approach. With these services, you don’t have to hire and train drivers yourselves. You can manage and direct drivers by paying them a small fee per delivery. For restaurants that are looking to open a ghost kitchen, this approach helps their staff focus on delighting the customer and earn more wages and tips.

Step 3: Get Your Menu Online

A well-crafted menu pays in the long run. In the capitalistic world that we live in, customers are spoilt for choices, and hence, it is only reasonable for them to want a five-star interactive experience. Allowing guests to customize their orders can lead to maximum customer satisfaction. If you make your menu more interactive, you will stand out from the competition, and your customers will keep coming back for more owing to the order experience. 

There are tech companies present in the market that can help you host your menu online. They can equip you with the tools to increase your menu’s interactivity and personalization. Their platform can help your customers customize their orders down to the littlest details. These app menus increase customer satisfaction and drive more deliveries. 

Another option to explore is third-party app menus. You can exercise the option of “dual ordering,” which is a mix of first and their-party delivery, to maximize the revenue. You can also choose o use third-party apps such as Grubhub and Doordash for first-time customers and establish a marketplace. 

Bottom line: it is crucial to design a menu that stands out. 

Step 4: Source Suppliers

If you are starting a ghost kitchen, a trusted food supplier plays quite a significant role. Established restaurants have it easy because they have a trusted food supplier and they can use the same supplier for their new ghost kitchen. A long-lasting relationship with your supplier might offer bulk discounts, which makes it easier to gain a quick profit from their ghost kitchen. 

New restaurants typically struggle to find discount-offering suppliers and hence, starting with a small menu becomes important. If you order a few ingredients in bulk, you might get discounts from the suppliers. 

Or, you can use the first-ever cash back credit card for your food and beverage inventory from Ghost Financial, a comprehensive financing and business services platform to support ghost kitchens. With Ghost Financial’s food and beverage inventory cash card, you can also receive 1% cash back on your inventory expenses. 

One of the most detrimental things that kill a balance sheet is running a restaurant that is operating on cash. Moreover, restaurants are hurting their margins by relying on debit, cheque, or CH transactions. With Ghost Financial’s credit card, restaurants can lift their margins by up to 10%. 

Step 5: Establish an Online Presence

In your quest for how to start a ghost kitchen, you’ve arrived at the last step. You’ve taken care of finding real estate, handled the delivery, created your perfect menu, and found suppliers. Now it’s time to create your online presence beyond just an online ordering website and increase brand awareness. 

  • First, create your Google Business profile to create brand credibility. It is free of cost and helps you appear in Google searches. Create your profile with images of your food, logo, contact info, and a link to your menu. Put first-party ordering sites as the “preferred” ordering methods to drive in more guests. 

Another way to create an online presence is via social media. You can create accounts for your ghost kitchen on Facebook and Instagram to increase your visibility. These profiles can also have information such as contact information, operating hours, ordering site, and more. Special promotions or deals via social media further go a long way to help boost your business. Make sure you use food-related to location-based hashtags for better engagement with potential guests. 

To Summarize

A ghost kitchen can be a profitable endeavor if done correctly. They have been around for a few years but the pandemic pushed the envelope and made ghost kitchens mainstream. They don’t need dine-in space, waiting staff, or expensive decorations for ambiance. They just need a highly functional and productive team of cooks and delivery professionals to make the operations work. Nevertheless, we hope we have answered the question of how to start a ghost kitchen. 

FAQs

1. How to start a ghost kitchen?

A ghost kitchen can be uncharted territory for many as it is a relatively new concept. For this reason, doing proper research on this subject is paramount. These are the steps to start a ghost kitchen:

  • Step 1: Find a Perfect Space

  • Step 2: Hire and Retain Delivery Couriers

  • Step 3: Get Your Menu Online

  • Step 4: Source Suppliers

  • Step 5: Establish an Online Presence

2. Is cloud kitchen the future?

Due to the pandemic, ghost kitchens have become the latest trend, but they are the future and are here to stay because they can be opened at a fraction of a regular restaurant and can be expanded at a higher rate. Moreover, the demand for online food delivery services is increasing day by day.

3. What is the difference between a cloud kitchen and a restaurant?

A cloud kitchen or a ghost kitchen in a delivery-only kitchen. They only focus on delivering the food ordered online. Restaurants are dine-in services with traditional brick-and-mortar outlets with distinct branding.

4. What is a cloud kitchen business model?

A cloud kitchen’s model is delivery-only with no physical dine-in space. It totally relies on the online orders placed via online ordering websites and food apps.