What to consider before opening a virtual restaurant 

If you’re an entrepreneur considering a virtual restaurant business, there are a few things to keep in mind.

What you want out of your location: While a virtual restaurant removes the need for dining space, you will still need a location for your kitchen. Rather than targeting an area with a lot of foot traffic, look for space close to consumers’ homes and with room to create an efficient kitchen.

What your delivery expenses will be: Expenses like rent, ingredients, storage, and kitchen staff are variables that all restaurants must consider, but virtual restaurants must also understand the costs of using third-party online ordering and delivery partners. Most of these partners will take a percentage of your sale.

For instance, UberEATS takes about 30% of the bill, Seamless and GrubHub take between 12%–24%, and DoorDash, Postmates, and Caviar take 15%–23%. You must know the delivery expenses before you start a virtual restaurant so that you can price your food according to your profit margin goals.

How you can increase your ROI: Much of the lure of virtual restaurants is the potential for high return-on-investment. Before you start one, be diligent about how you intend to track and measure your return. You can also increase your return by diversifying your menu across different cuisines, operating on days/times you may not traditionally, and listing your business on several online-ordering platforms.

How you will market your restaurant: With less money going to labor or rent, you will have more resources to put to other areas that can increase business—like marketing. Many of the marketing tactics that work for traditional restaurants will apply to your virtual business, too. For instance, favorable reviews, social media marketing, and PPC are important ways to drive more online orders. Moreover, you will want to optimize your online listings to include images, correct business information, popular keywords, and updated menus.

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