Ghost Kitchen Business Plan Strategy for Profit

Mar 15, 2021

Any new venture, regardless of focus, needs a business plan and strategy for profit. But when you’re diving into the ghost kitchen concept, your restaurant business model needs to consider a few key areas. Ghost kitchens or virtual restaurants are delivery-only enterprises that combine brick-and-mortar considerations with delivery app technology. 

Since the Covid-19 pandemic, the ghost kitchen model has exploded, but a ghost restaurant may not survive without a strategic plan. The ghost kitchen business plan and strategy for profit below will help the virtual brand beat the competition.

Create a Menu for Delivery

Traditional restaurants usually aren’t concerned about menu items meant solely for delivery. But a delivery-only restaurant needs to create a food concept that travels well. Delivery-only food needs to keep warm longer and arrive hot and fresh. 

The restaurant manager can achieve this is to design a limited menu that offers a few key food choices. The ghost kitchen business can focus on these food items and choose carryout containers that ensure adequate food quality. Similar food items with overlapping ingredients will keep costs low and cut down on food waste as well.

Develop the Right Menu Pricing

Menu pricing in the restaurant industry can be a complicated process. Traditional restaurants need to consider raw food cost, ideal food cost percentage, and profit margin. 

For ghost kitchen business models, you have the additional cost of delivery, food packaging, and lack of foot traffic to consider. Both need to understand their ideal customers and price point. 

Cloud kitchens may have to choose basic food containers when first starting to lower costs. As the existing restaurant grows, they can swap out the low-cost packaging for nicer boxes.  

Menu pricing should consider the competition and understand that the competitors’ price points may be different. When delivering food, there’s always an additional cost for the company in the ghost kitchen market, and the menu pricing should include this delivery cost. 

Look at Labor Costs

Labor costs for any restaurant (food truck to a restaurant chain) are always a big chunk of the profit margin. In a typical restaurant, labor cost  includes salaries, bonuses, and overtime. For ghost kitchens, the number of employees is usually lower, but you still need to optimize employee scheduling. 

Ghost kitchens need to schedule workers for meal preparation, packaging, and delivery weeks in advance. Using a scheduling or delivery app can help with this process for a ghost kitchen. Scheduling apps look at actual data to help determine labor needed and can shift demand during busier periods. The ghost kitchen’s ultimate goal is to keep labor costs as low as possible.

Find a Location

A brick-and-mortar restaurant has an actual physical space that offers dine-in capabilities. Ghost kitchens need kitchen spaces for food preparation but not a physical restaurant. Consequently, a dark kitchen doesn’t have to pay for expensive real estate in a hip part of town. 

Kitchen operators don’t have to worry about advertising or signage to draw in foot traffic. The ghost kitchen can be in any commercial kitchen offering space or in an ideal location that makes it easy to deliver food. If you’re an existing restaurant expanding into the virtual brand concept, choosing a place close to your current customers will make delivery easier.

Build Your Virtual Brand

Established restaurants already have branding in place. But a ghost kitchen business is building the restaurant brand online. While people are ordering food online more than ever before, the competition has also increased for shares of the profits. It’s easy to become lost in the number of food delivery choices that have sprung up in the last few years. 

Restaurants who already deliver online have an advantage over those just starting, but one way to even the playing field is to dominate a food category and build your brand through quality food and fast delivery service. Deciding the fundamental concepts of your brand and infusing those in the packaging, food, and messaging from the beginning helps build a restaurant brand smartly.

Select Your Delivery Method

The ghost kitchen operator needs to choose in-house delivery or a delivery company. In-house delivery may have lower delivery costs and fees, but it also means managing delivery drivers and providing fast service all the time.

A delivery business app will have higher fees, but the delivery range can be broader and more reliable. On-demand delivery apps have hundreds of drivers at their disposal and can offer a vast network of support for your business. Some online delivery apps can also help with employee scheduling and predict busier periods. In the end, the choice depends on your needs and strategy for profit.

Formulate a Marketing Plan

The restaurant brand needs to create a marketing strategy that reaches the desired customer. The marketing plan should include a high-quality website, a strong social media presence, an advertising model, and an email marketing strategy. 

If most of your customers are on Instagram, developing a following through daily posts and Instagram stories will help reach your customers. But if your customers prefer Facebook, creating a business page and advertising plan for this platform may be more strategic. At first, it’s better to focus on one social media platform. 

Email marketing can also help build virtual brand awareness and customer loyalty. A customer’s inbox is valuable real estate and one that can help develop serious profit. Virtual kitchens can send out weekly updates or promotions to boost sales. Tying in email marketing with a food blog can increase website traffic and profits as well. 

Creating a ghost kitchen business plan and strategy for profit is similar to a traditional kitchen model except in a few crucial areas. Ghost kitchens need to focus on creating dishes engineered for food delivery, building a virtual presence to connect with the tech-savvy audience, and choose a delivery method. 

While most food businesses come and go, ghost kitchen entrepreneurs can strategically create a successful business by designing a business plan that works.