As COVID-19 and social distancing guidelines continue to impact the restaurant industry, more and more people are considering opening ghost kitchens. Unlike brick-and-mortar restaurants, ghost kitchens lack a dine-in area. Instead, they rely entirely on online ordering to connect with customers.
Because they don't require the space, supplies and employees found in traditional restaurants, ghost kitchens are considered smaller investments. If done right, they can be a great way to make money in the food business without having to risk too much of your personal funds. But before you go ahead and open a kitchen of your own, you should be aware of the pitfalls that often lead to failure in this industry. Here are some of the most common mistakes when running a ghost kitchen.
Bad Concept and Marketing Strategy
The first thing you need to consider when opening a ghost kitchen is your concept. What sets you apart from other businesses in the area? The more unique your concept is, the less competition you'll have.
Of course, your concept can only be successful if you supplement it with the right marketing techniques. Chef Eric Greenspan suggests that a virtual kitchen will "only work if your brand is strong enough." Since you can't rely on face-to-face interactions, marketing is your main method of connecting with customers. Some popular techniques include:
- Optimizing your website: A high-quality online menu can boost restaurant sales by 65%.
- Partnering with delivery applications: Most delivery services have their own audience base that you can connect with.
- Offering deals: Promoting deals and discounts on your website is a great incentive for new customers.
Successfully marketing your ghost kitchen gives you the opportunity to create even more virtual brands in the future.
Poor Financial Planning
While ghost kitchens might be less expensive than traditional restaurants, they still require a fair amount of money to get started. The last thing you want is to have to shut down early because you underestimated your budgetary needs. Some costs you'll need to account for include:
- Structure: If you want to save money, consider renting or sharing a space as opposed to buying one.
- Staff: While you don't need servers or hosts, ghost kitchens still require chefs and managers.
- Food: When planning your menu, be sure to consider the costs of inventory and food. These costs should influence how you price your items.
- Marketing: You should always reserve part of your budget to cover your marketing needs, which may include website optimization and mobile app development.
You should also create a contingency plan, which involves saving money in case of emergencies.
Lack of Communication With Customers
While you may open a ghost kitchen because of your own passion for food, your business will always be reliant on customers. Without a steady flow of customers buying from your kitchen, you can't expect to stay open for long.
Customers do more than just fund your business — they also offer valuable insight that can guide future decisions. Some ways to connect with them include:
- Providing contact information: Put your email address on your website and ask customers to send in suggestions.
- Analyze successful restaurants: Rebel Foods opened successful cloud kitchens by analyzing what types of restaurants did well in their area.
- Read reviews: Don't just wave off negative reviews — instead, take customer criticism and see if you can use it to advance your brand.
If you fail to communicate with your customers, you won't be able to meet their needs.
Lack of Technology
COVID-19 has led to an increasing number of staff shortages in the restaurant industry, which has made it more difficult to run both traditional restaurants and ghost kitchens. If you hope to survive in the industry, you'll have to adopt restaurant technology. This includes:
- A POS System: A point of sales (POS) system helps you monitor orders, track data and communicate with customers.
- Restaurant SaaS technology: This leased service integrates payroll, scheduling and online ordering into one, easy-to-use system.
- A mobile app: While a mobile app isn't necessary for a business, it can increase your consumer base by offering a new method for placing orders.
You'll also need technology to help manage your different delivery orders. For ghost kitchens, delivery services are your main method for connecting with consumers — the more services you use, the bigger your customer base will be. Unfortunately, it can be difficult to track and send multiple orders. Each service gives you its own tablet, which increases the chance of making mistakes.
Cuboh helps ghost kitchens with their order management by streamlining all orders to a single tablet. It can also integrate with your POS and printer systems. The goal is to improve your efficiency, leading to fewer mistakes and a better brand reputation. Ultimately, technology is here to help — if you want to succeed, use it!