If you love cooking, whether you’re a professional chef or an avid hobbyist, then you should definitely explore the possibility of starting your own ghost kitchen. If you set it up in a smart way, it could be a great way to start a new venture without making a huge capital investment.
So many people have done it successfully – especially during the Covid-19 pandemic, when everyone was stuck at home and people needed to find new ways to earn a living. But today, as the world goes back to normal, it appears that ghost kitchens are here to stay.
Imagine being able to do what you love and provide delicious meals to paying customers. It’s much easier than you think, especially if you follow the simple steps that I’ll lay out for you.
What Is a Ghost Kitchen?
Despite how it sounds, a ghost kitchen is not a room in a haunted house! It’s simply a delivery-only (although some might allow for pick-up/takeout options) restaurant that takes orders online. Operated out of a commercial kitchen or even a chef’s home, the ghost kitchen operator sets the menu and accepts orders.
Ghost kitchens grew in popularity during the pandemic as people were looking for ways to enjoy restaurant food without being able to leave home. The trend is not fading, even as the pandemic is waning.
10 Steps to Open a Ghost Kitchen
The thought of starting any business may seem overwhelming, but the simplicity of a ghost kitchen and the lack of significant capital investment needed should put your mind at ease.
Follow the steps below to learn how to start a ghost kitchen from home or another location and start cooking!
1. Create Your Concept and Menu
Before you do anything else, you need to decide what type of ghost kitchen you want to operate. You might start by thinking about what you like to cook, but also (and more importantly) consider what there will be a market for and where you can create a competitive advantage.
Keep in mind that whatever food you are going to make and sell will need to be something that can easily be packaged and transported without getting ruined. You might want to avoid things like heavily dressed salads that can get soggy or fancier foods like expensive cuts of meat that might not hold up as well.
Think about the types of foods that people typically order in. Among the most popular options are sandwiches, comfort foods (e.g. mac and cheese or lasagna), sushi and other Asian foods, and Mexican food.
Since you’ll always need to buy fresh ingredients anyway, it shouldn’t be hard to create a test menu and then change up the options to see what customers like best.
2. Write a Business Plan
Once you have a general idea of what type of food you plan to offer, the next step is to write up a business plan. It doesn’t need to be a long formal document, but it will help you to get your ideas in order and get organized.
Having a business plan in place will also be important if you decide to look for investors or outside funding to get your business off the ground.
There are plenty of free business plan templates online, but if you prefer to start from scratch, these are the most important sections to include:
- General description of your ghost kitchen plan
- Sample menu
- Target market
- Competitor analysis
- Marketing plan
- Financial projections
3. Select a Location
You may think location is not so crucial when you have a ghost kitchen – you don’t need to think about foot traffic, since you’ll be receiving orders online.
Location is still important, though, since your business will be making deliveries. You’ll want to be able to deliver food to your customers within a reasonable amount of time, so you need to be located close to your target audience.
If you plan to work out of your own personal kitchen, take a moment to think about your neighborhood. Do you foresee considerable demand in your general area? Would it make more sense to rent a commercial kitchen space to get easier access to your potential customers?
Of course, there are financial issues at play here. You may want to start out in your own kitchen. As you start getting paid and your business grows, you can move to a larger space.
4. Get Relevant Licenses and Permits
Whether you’ll be working out of your home or another space, especially when dealing with food, it’s important to make sure that you are fully compliant with all safety regulations.
You’ll be required to get certain licenses and permits to operate your business. The process and specific requirements will depend on your location, but will likely include a business license as well as a food service license.
You may also be subject to regular inspections, so make sure you stay on top of the local rules and regulations.
5. Establish a Distribution Plan
One of the biggest challenges your ghost kitchen business may face is how to actually get the food to the customer. If you can’t deliver hot, fresh, and delicious food quickly, then you’ll find yourself with dissatisfied customers, bad reviews, and probably few repeat orders.
Before you take your first order, have a specific plan in place for how exactly the food will be delivered. Possibilities include delivering the food yourself, hiring a driver(s), or using a third-party app like Uber Eats or DoorDash. The advantage to partnering with a delivery app is the exposure, which can lead to more orders.
On the other hand, you’ll have to pay a commission and fees, so you’ll have to do the financial analysis and determine the best choice for your business. In some cases, receiving credit card payments directly through your own website might be the best option.
You’ll also need to figure out how to package the food for transport. You’ll need to decide on the types of containers to use (e.g. plastic, tin foil, recyclable, etc.), the sizes you’ll need, and how you’ll keep the food hot or cold.
6. Set Up an Ordering and Payment System
To receive orders online, you’ll need to set yourself up with the right technology to manage orders and get paid. This is a crucial step, as a smooth user experience will lead to happy customers who keep coming back.
With Pay.com, you can easily set up your own checkout page. It’s super simple and straightforward for customers to pay via credit card or any other payment method you choose to accept.
Pay.com also lets you take credit card details over the phone and enter them into your Virtual Terminal. You can also send direct payment request links via email or SMS to make it even easier for customers to pay.
Once orders start coming in, you want the process to flow smoothly, so you can focus on cooking and building the business. Once you get started with Pay.com, you can leave the rest to us. You take orders, provide food, and get paid. We handle the back-end details and provide you with data and analytics to help you track your business growth.
7. Develop a Marketing Strategy
How are you going to attract customers? From word-of-mouth to handing out flyers to organic social media to paid advertising, the possibilities are endless. Determine what your marketing budget is and work backwards from there.
Knowing who your target audience is and where they spend their time will also help you figure out a marketing strategy. If you’re aiming for Gen Z, you may want to set up a TikTok account. If your food is a feast for the eyes and you have good photography skills, Instagram could be the place for you. Test and see what works best! Good marketing strategies are dynamic.
Things like an eye-catching logo and fun (environmentally-friendly) reusable packaging are great marketing tools as well.
8. Find Your Suppliers
In the long run, good relationships with suppliers of food and materials will save you cost and hassle. When you’re just starting out, look for other small businesses who are happy to work and grow with you.
Don’t compromise on ingredient quality, even if you’re trying to save money at the beginning. Focus on the big picture and remember that it’s the delicious food and quality service that will keep your customers happy.
9. Hire and Train Staff
You may start off as a solopreneur or you may hit the ground running with additional staff such as a sous-chef, a main chef, delivery people, etc. Whenever you decide you need to hire staff, make sure you have clear job descriptions and division of responsibilities.
Especially if you outsource some of the cooking, be sure that you train employees well so that they keep up to your quality expectations. Steps you can take to attract talented workers include offering competitive wages, a fun and supportive work environment, and opportunities for advancement.
10. Open for Business!
All that is left to do is officially launch your ghost kitchen, start taking orders, and get paid to do what you love the most. See, that wasn’t so hard, was it?
The Pros and Cons of Starting Your Own Ghost Kitchen
While it’s definitely not as complicated as you might think to start your own ghost kitchen, let’s face it: it’s not all sunshine and rainbows. It’s important to consider all the pros and cons before you make your final decision.
- Cheaper overheads than other restaurant or food businesses
- Fewer staff needs
- Easy to get started out of your own home
- Rarely meeting customers in person, making it harder to develop relationships
- High delivery costs
- Limited menu options
The Bottom Line: Is Starting a Ghost Kitchen Right for You?
Now that you know how to start a ghost kitchen, it’s time to decide whether you should. If you’ve got the entrepreneurial spirit, you love food/cooking, and you want to be in a service-based business, then a ghost kitchen could be a good option for you.
No one will tell you that starting and running a business is easy, but Pay.com can help take some of the pressure off. Setting up your payment infrastructure is one of the most crucial first steps. Pay.com offers a simple and fast onboarding process and is so easy to use, both for you and your customers.