June 18, 2021

Ghost Kitchens: The Fastest Way to Make a Profit Off Your F&B Business

Make sure your food business succeeds

Running a food and beverage (F&B) business isn’t easy, especially with high overhead costs and huge risks, that make starting a F&B establishment hardly a worthwhile undertaking for many aspiring F&B owners. This concern has only been exacerbated in 2020, as Singapore plunges into an unprecedented lockdown for months in the face of the COVID-19 pandemic. Restaurants were forced to halt operations, leaving F&B owners suffering huge losses.

However, it is also this time that a new trend in the food industry was fully realised – that of food delivery. Despite the devastating effects of COVID-19 on the F&B industry, online food delivery revenue is predicted to reach US$493.60m in 2022, and continue to grow, even post-pandemic, to US$780.30m by 2027. If you don’t grasp this new trend in the F&B business, your competition will.

This, together with many consumers’ changing preferences toward favouring ordering food in instead of dining out, makes streamlining F&B operations toward fulfilling delivery orders the future of the F&B industry. 

Why ghost kitchens? 

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How can food businesses streamline their operations for fulfillment delivery orders? The answer is ghost kitchens. 

Ghost kitchens – also known as virtual kitchens, cloud kitchens, or dark kitchens – differ from traditional dine-in restaurants in that the space and operations are optimised for delivery or takeaway orders. With the need of a front-of-house space eliminated, the rent and labour cost saved are just the beginning of the way ghost kitchens are made to turn a profit with the least resource possible. .

The fantastic thing is that the risks are minimised, and therefore you can go all out and give your fantastic F&B ideas a go. This guide will tell you all about ghost kitchens, and the ease at which you can grow your F&B business by using ghost kitchen spaces, such as those provided by Smart City Kitchens.

5 ways ghost kitchens benefit your F&B business 

  1. Lower upfront and operational costs 
  2. Faster launch and ROI 
  3. Grow rapidly at prime locations across Singapore
  4. Target your customers more accurately than ever online 
  5. Proprietary software to manage your delivery orders

1. Lower upfront and operational costs

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With ghost kitchens, you are saving thousands of dollars. 

Upfront investment for a ghost kitchen costs less than SGD$10K – much lower compared to the usual cost of a traditional brick and mortar restaurant between SGD $50K-$600K.  Ongoing rent of ghost kitchens are also much lower than that of a traditional restaurant by virtue of its smaller space. 

Apart from upfront investment, operational costs of ghost kitchens are also much lower. In a regular restaurant, you need to hire waiters, bartenders, dishwashers and cleaners. That’s a lot of salary payout for a F&B establishment that is just starting out.

However, with ghost kitchens, you only need 1 or 2 chefs. This way, operational costs remain low, with food packaging being the only extra operational cost incurred. Hence, with the efficiency of ghost kitchens, costs of rent, wasted food, and other various logistical requirements of a dine-in restaurant also fall away. 

At Smart City Kitchens, maintenance and security are also taken care of, so you don’t have to spend extra on them.

This gives you lower costs, higher margins, and best of all, more profit.

2. Faster launch and ROI

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Ghost kitchens’ streamlined operations also mean that they have a shorter time to launch than traditional restaurants. 

The smaller space needed for a ghost kitchen means no more waiting months for renovations and decor. On top of that, Smart City Kitchens already have all required operational licenses from the government ready for you. Within a few weeks, your business will be up and running. All you need with a ghost kitchen are your basic equipment and chefs.

When following this business model, your ROI will be high in a much quicker time frame. 

You will usually break even on your investment within 6 months, instead of the typical 5 years it takes a typical dine-in restaurant.

3. Grow rapidly at prime locations across Singapore

When you work with a kitchen space provider like Smart City Kitchens, you can open a ghost or virtual kitchen and have it operating functionally and efficiently in no time at all. With locations all over Singapore, you can attract and enjoy many new customers – customers you would not have reached with only a sole dine-in restaurant.

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The ease of opening a ghost kitchen also allows you to expand very quickly in different locations. You won’t need to worry about locations and rental leases each time you open a new franchise. Just open your ghost kitchen and voila – orders will begin pouring in. 

By putting your resources in operating in many ghost kitchens instead of a single traditional dine-in restaurant, you appeal to customers at different locations at the same time, gaining exposure to a more diverse pool of customers, and attracting many more customers. Everything will be done online, which is perfect as almost everyone has a smartphone and prefers the convenience these days.

4. Target your customers more accurately than ever online 

At Smart City Kitchens, we’ve done the hard work and necessary research to locate the areas that are the most promising and profitable for your delivery businesses. Information like the demographic and preferred cuisine type will also be shared with you by our kitchen specialists, making sure that you pick locations that are best for your business. By focusing on delivery-only orders, your food business will be streamlined to produce food fast and have it out on the road being delivered in a matter of minutes – creating a pool of happy customers!

5. Proprietary software to manage your delivery orders 

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When you move into Smart City Kitchens, you automatically gain access to all the technology you need to streamline your business. Managing orders on various food delivery platforms is not a problem with Smart City Kitchens. You will easily be able to track and manage every single order through one tablet. The only thing you need to concentrate on is getting the orders cooked and ready for delivery. 

No food delivery service platforms are out of bounds, as such, you can tap on any delivery platform – like GrabFood, Deliveroo, WhyQ, and Foodpanda Singapore – as you wish. 

When you use Smart City Kitchens, you’ll have great support to help you transition from your in-house dining restaurant to a food delivery business. 

Ready to embark on this simpler way to own and operate a food business via ghost kitchens?

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The main goal at Smart City Kitchens is for us to drive innovation and help create a brand-new era of successful F&B franchises that are focused towards the future. We are at the forefront of a delivery-centric world, helping the F&B industry find renewed success in a world that is ever-changing. Want to capitalise on this fastest growing trend in kitchen spaces? Get in touch with us today.  We’re more than happy to answer any questions you have!


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