How To Improve Dark Kitchen Profit Margins

by ShareThere
October 1, 2022
Commercial Kitchens, Commercial Kitchens to rent, Dark Kitchens, Kitchens For Deliveroo
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Ways to improve your kitchen’s profit margins and profitability

Running a conventional restaurant brings with it slim profit margins. The average profit margin is around 5%. That means for every £1 of revenue 5p is profit.

When renting a dark kitchen or virtual restaurant, they have much larger margins with an average profit margin of around 15%. The dark kitchen is currently experiencing a golden age and today is a great time to get in on the ground floor.

We’ll cover why dark kitchen restaurants are more profitable than bricks and mortar businesses later on but let’s look at how you can increase the profit margins of your dark kitchen business for now.

The easiest way to increase the profitability of your dark kitchen rental is to reduce costs and increase your bottom line. Once you’ve lowered your costs it’s time to focus on increasing revenue through sales, tightening operations, and improving your product offer.

Simplify and streamline your menu

When deciding on your dark kitchen menu, it’s best to keep things simple. The age-old saying ‘quality over quantity is never truer than with a dark kitchen menu.

First things first. For any menu, but especially a dark kitchen menu, it’s important to build and maintain a menu that appeals to different dietary requirements and focuses on several core products (a great example of this is five guys). Having a huge menu can be confusing for staff and customers alike but more importantly, can harm the speed and quality of food that you can produce.

By working from a streamlined menu you will reduce spending on food waste, have a clearer understanding of the commercial kitchen equipment needed to execute your menu, and speed up the production time of items for delivery.

We recommend conducting customer feedback and surveys to gain insights into not only what your existing client base wants but also what customers may want in new markets that you wish to enter. It’s important to break down the data from sales to establish 3 things;-

What items are selling and what’s not
Where you should focus your energy when introducing new menu items (you’re selling 5x as many burgers as hotdogs so should you focus on a new burger line?)
How to manage staffing and supply chain demands, helping to reduce costs and waste.

Minimise your food waste

One of the biggest loss leaders and expenses to the bottom line of any food business is food waste. Use expiry trackers and expiry sheets to monitor your inventory and any upcoming expiry dates.

It can be beneficial to offer a reduction on a certain item or include it in a deal rather than dispose of ingredients and which then returns a loss on investment.

You can also use portion size monitors such as Portion Monitor by Tiny Apps to utilise data to ensure you are delivering the optimal size of the portion. It’s easy to go all in and throw together huge portions but if these are going to waste then it becomes a cost not just to you but also to the customer. As we’ve mentioned above it’s more important to deliver on quality than quantity. You can then use the additional money to focus on the quality of the ingredients.

Focusing on your menu size and desirability can also help you to control food waste and portion size. Monitor what’s selling and streamline the menu to work around several core ingredients.

Rent a space that fits

The great thing about off-street kitchens is that you have much more choice and flexibility when it comes to choosing your next kitchen to rent.

It makes no sense to rent a kitchen that is designed for a large chain production kitchen if you have a small menu and limited capacity. Working out these numbers up front can pay dividends later on for your business. The main areas to focus on are;-

Staff numbers
Amount of equipment needed
Amount of dry and cold storage needed

Keep your costs low and focus on producing great food. You can upsize later on once your business becomes profitable.

Market fit and your price point

Everyone loves to get creative in the kitchen but you must do so with one eye on profitability and pricing. It’s no good selling the best burgers in the UK if they are priced at £100 a slider!

When you are building your menu, focus on market fit. If you are targeting a low-end, low-spend market it is important that your menu and pricing reflect this.

Equally, if you are aiming for a high-end restaurant takeaway concept it is important to increase your produce spending to improve food quality, which you will then need to reflect in your pricing.

Get your name out there

As we will cover, the downside of any dark kitchen rental is that you lose the benefit of footfall from passing trade. The exception to this rule is with our pub kitchens to rent or residencies where you will often retain the existing client side of the pub. For those with a takeaway concept, to counteract the lack of footfall it is important to have a great marketing strategy in place.

The cheapest way to reach your customers is via social media. It can be difficult to build your audience initially but a great way to do this is to include a contact card with all orders letting your customers know where they can find you online. Your eyes are bigger than your belly for a good reason! The most effective social media channels to focus on are those that rely on visuals. Think Instagram, Tik-Tok, Snap and Facebook. Post mouth-watering images of your food on a regular basis and use hashtags to target local areas. Show behind the scenes and introduce staff to your customers. Show off your kitchen and processes and celebrate any great wins whether that’s a new 5-star rating or a great review from a customer.

Complete and claim online listing profiles like Google, Yell and Trip Advisor and let your customers know what to expect with regards to opening hours, contact details and a location – featuring on Google maps is a great way to catch customers on the fly. You can also leverage these profiles to show off your food and menu.

Build on brand reputation

With the advent of online reviews, gaining fans has never been more important. The easiest way to kill your sales is by attracting a main course of negative reviews! Your main focus at all times should be meeting the expectations of your customers and producing great quality food. End of. There’s no doubt about it, negative reviews will impact your sales and deter new customers.

In contrast, attracting good reviews and building a positive reputation for your brand will improve your sales and could be the deciding factor when a customer is weighing up whether to buy from you or a competitor. You can improve your online reputation in 3 simple steps;-

Ensure your food is top quality and don’t let bad food leave the kitchen
Manage your customer’s expectations and provide a great service
Ensure food is delivered on time and within your estimated delivery times

Build relationships with your customers

Working from a food delivery kitchen or dark kitchen one of the negatives is that you never meet your customers. There’s something special about seeing your customers enjoying your food, there’s no doubt about it! However, there are several ways you can connect with your customers, building relationships and your brand’s reputation.

One of the simplest ways to humanise your brand is through personalisation. Think Starbucks with name on cups or Honest burgers, which to this day still send a handwritten thank you note with every order. Recipe cards and produce trail cards are another way to differentiate yourself and show you care.

With social media playing such a pivotal role in today’s society, it is a great way to keep in touch with customers new and old and can be used to show and share the personality of your business. 3 simple ways to personalise your on-food delivery brand;-

Send a handwritten note or thank you card (especially when starting up)
Consider sending recipe cards to allow your customers to replicate your dishes at home
Utilise social media to maintain contact with your customer base

Run promo’s and consider loyalty schemes

Everyone loves a deal! By examining your sales data you can establish your busy and quiet periods or identify loyal customers and drive loyalty with a stamp or ticket scheme. Nandos and Starbucks both have great examples of loyalty schemes. While Dominoes pioneered the concept of Two for Tuesday (traditionally their quietest day of the week).

It’s important to remember that the data is usually right! While it can seem like you are losing money by offering a discount or loyalty scheme you will benefit from the loyalty of returning and new customers incentivised by these offers in the long run.

Increase your customer conversion

The high cost of a brick’s-and-mortar restaurant has one benefit. Footfall. This is a luxury that isn’t available to dark kitchen or ghost kitchen businesses. However, there are numerous ways to counteract this, and if executed well can even play into your hands by not resting on your laurels. Here are 6 simple ways to increase sales and increase online conversions.

Build or commission a great website that is easy to use and looks great
Build an online presence and fanbase using social media
Run regular online adverts and email campaigns to new and existing customers
Use High-Quality Product photography on order platforms and on your website
Utilise door-to-door advertising in your delivery area. Ensure any material is high quality and represents your brand
Encourage reviews from customers whether through ordering platforms or on your google business listing

Increase your average order value

Have you used ordering apps like Deliveroo or Just Eat and just as you’re about to check out, they offer you a dessert or drink? That’s upselling. Upselling is a brilliant way to increase your average order value, revenue, and spending per head. Using your current order value as a guide, set a goal of adding additional sales to each order and monitor these consistently using trial and error to find out what works for you.

If you’re looking for your next commercial kitchen space to rent, or are just getting started, get in touch to see how we can help you or take a look at our existing selection of dark kitchens to rent. Share There list commercial kitchens to rent in London and throughout the UK. Let’s get cooking together!

How to use tech in a commercial kitchen

March 11, 2023
Commercial Kitchens, Dark Kitchens, Food Business

Whew! Running a commercial kitchen is no joke! It takes a whole lot of know-how on food safety, menu planning, smooth workflows, and managing staff like a pro. But hold onto your hats, folks, because with the help of cutting-edge technology, modern kitchens are cooking up a storm and staying ahead of the game!

That’s right, chefs can now whip up a storm in the kitchen more efficiently and effectively than ever before! With apps that streamline and automate ordering, and fancy-pants artificial intelligence (AI) that can handle the boring bits, tech is totally transforming the way we run our kitchens.

So, let’s get cooking and see how this tech wizardry is making life in the kitchen a whole lot simpler!

Food production

isten up, foodies! The kitchen game has changed and tech is leading the charge! Say goodbye to the old-school ways of taking orders and storing ingredients – we’re talking about the cutting edge stuff!

With automated ordering systems, consistency is key! No more errors or human slip-ups – technology takes care of it all! Staff can now focus on cooking up a storm and getting those meals out to hungry customers, without worrying about manual order entry.

And let’s talk refrigeration – smart refrigeration systems are the real MVPs! They help maintain a consistent temperature throughout storage areas, keeping food fresh and preventing waste. No more sad, wilted produce or spoiled meats – technology’s got your back!

But wait, there’s more! Cloud-based inventory management means chefs can stay on top of their ingredient status in real-time, without even leaving the kitchen. This makes budgeting a breeze and ensures that every dish comes out tasting like pure perfection!

So, are you ready to up your kitchen game with the power of tech? Let’s get cooking!

Kitchen equipment

Listen up, foodies! The kitchen game has been taken to a whole new level with the power of modern tech! From lightning-fast cooking equipment to dishwashers that can tackle even the toughest grime, these gadgets are changing the game in commercial kitchens everywhere.

Automated fryers are the real MVPs, cooking up tasty grub faster and more accurately than ever before. And don’t even get us started on those dishwashing machines – they make cleaning a breeze, leaving plates and silverware sparkling like new!

But wait, there’s more! Internet-connected appliances are giving chefs the power to monitor temperatures remotely and stay on top of repairs and cleaning. Plus, sophisticated inventory management systems and automated ordering means that chefs can focus on what they do best – cooking up mouth-watering meals!

So, whether you’re a restaurant owner, a chef, or just a foodie, the world of kitchen tech is an exciting one to explore! Say goodbye to manual labour and hello to the future of cooking – it’s a delicious ride!

Task management

Listen up, kitchen crew! Are you tired of struggling to keep your team organised and on track? Well, it’s time to say hello to the power of automation!

With cutting-edge scheduling systems and task management apps, restaurant owners can keep their staff in sync and working together seamlessly. No more missed tasks or miscommunications – everyone can stay on top of their game and work like a well-oiled machine!

And the best part? Automation saves time and eliminates errors! No more endless paperwork or data entry mistakes – let the machines handle the boring stuff so you can focus on what really matters: serving up delicious dishes!

Plus, with built-in analytics features, restaurant owners can track performance metrics and ensure that tasks are completed accurately and on time. It’s like having a personal productivity coach right at your fingertips!

So, whether you’re a head chef, sous chef, or kitchen staff, it’s time to embrace the power of automation and take your kitchen game to the next level!

Staff management

In addition, digital inventory management systems help keep track of ingredient stock levels and alert when supplies are running low. This reduces waste, ensures menu consistency, and prevents the headache of running out of an important ingredient during service.

With advanced analytics tools, you can also track and analyse sales data, staffing levels and food costs, which provide valuable insights to make informed decisions about menu pricing, staff scheduling and ingredient purchasing.

In conclusion, technology is proving to be a game-changer in the world of commercial kitchen management. By adopting the latest software and tools, you can improve your staff management practices, boost productivity, and ensure your customers receive the best quality dishes possible. So why not put down that pen and paper and embrace the power of tech to take your kitchen to the next level?

Food waste

Smart cold food storage solutions are also becoming increasingly popular in commercial kitchens. These systems use advanced technology to monitor the temperature of stored food, ensuring it stays at the optimal level to preserve freshness and prevent spoilage. Some even have built-in sensors that can detect when food is nearing its expiration date, alerting staff to use it up before it goes bad.

In addition, digital kitchen management systems allow chefs and managers to track food waste data in real-time. By analysing this data, they can identify areas where waste is occurring and take steps to reduce it. For example, they might adjust recipes to use less of an ingredient or change the way they prepare certain dishes to minimise waste.

Overall, technology is proving to be a valuable tool in the fight against food waste in the restaurant industry. By implementing these innovative solutions, commercial kitchens can reduce waste, save money, and help create a more sustainable future. So why not join the movement and make your kitchen a leader in reducing food waste through the power of technology?

Health and safety

n addition to the benefits of food safety and resource optimization, the use of technology in the restaurant industry can also improve customer experiences. For example, digital ordering and payment systems can reduce wait times and increase order accuracy, while mobile apps and loyalty programs can enhance customer engagement and encourage repeat business.

Furthermore, technology can also enable restaurants to offer more personalized experiences to customers. For instance, data analytics can help restaurants to understand customer preferences and purchasing patterns, allowing them to tailor menus and promotions to individual customers.

Overall, the use of technology in the restaurant industry has the potential to revolutionize the way restaurants operate, from food safety and resource optimization to customer experiences and personalized marketing. As technology continues to evolve, we can expect to see even more exciting advancements that will shape the future of the restaurant industry.

POS systems

It’s great to see how technology is making POS systems more flexible and efficient, allowing restaurant owners to easily manage their sales data on the go. Another advantage of modern POS systems is their ability to integrate with other business tools, such as inventory management software and customer relationship management (CRM) systems.

By integrating these systems, restaurant owners can gain a comprehensive view of their business operations, from inventory levels and sales data to customer feedback and marketing campaigns. This information can help them make informed decisions about their menu, pricing, and marketing strategies, ultimately driving growth and profitability.

Furthermore, modern POS systems can also support a variety of payment options, including mobile payments and contactless payments, which are becoming increasingly popular among customers. These payment options not only offer a more convenient experience for customers, but they can also help reduce transaction times, improving overall efficiency in the commercial kitchen.

Overall, the integration of technology into POS systems has the potential to improve many aspects of running a commercial kitchen, from sales tracking and inventory management to customer engagement and payment processing. It’s exciting to see how technology will continue to evolve and improve these systems in the future.

Picture of a food delivery bag being delivered

Overcome the issues of starting a food delivery business

January 20, 2023
Food Business, Commercial Kitchens to rent, Kitchens For Deliveroo

Over come the issues of starting a food delivery business

Feast your eyes on this tasty tidbit of information! In the past, a night out at your favorite restaurant meant dressing up and mingling with friends over a scrumptious meal. But now, things have taken a bit of a different turn. Sure, we still love sharing a meal with our loved ones, but the convenience of ordering in and chowing down in the comfort of our own homes has become increasingly popular.

In fact, the global revenue for online food delivery is predicted to hit a mouth-watering £241.40bn by 2022, and with an impressive annual growth rate of 5.8%, it’s expected to reach a staggering £321.30bn by 2027. So, for all you food enthusiasts out there dreaming of starting your own food delivery business or for restaurants looking to expand, the delivery model could be the recipe for success.

The issues and fixes for food delivery companies

Starting a business can be a bit intimidating, and the food industry is no exception.

As you embark on this journey, it’s natural to have some doubts and reservations. But don’t worry, we’re here to squash those fears and guide you through the process of launching a food delivery business from a dark kitchen or within a pub kitchen residency to rent. From the potential challenges to solutions for overcoming them, we’ve got you covered.

So, let’s dive in and turn your business dreams into a delicious reality!

The competition: Issues with customer retention

It’s no surprise that the food delivery market is extremely crowded, and the competition is fierce. With so many established food businesses using food delivery apps and already having a loyal customer base, it can be difficult for smaller, independent food brands and new startups looking to make a name for themselves and gain customer loyalty.

However, this should not discourage you, this is an opportunity for you to come up with creative ways to differentiate your brand, create a unique offering and make sure your customer service is top-notch.

There’s always a way to stand out and make your food delivery business successful in a dark kitchen, pub residency to rent or food pitch. From the potential challenges to solutions for overcoming them, we’ve got you covered.

So, let’s find those solutions!

The solution

There are a few ways for startups to beat established competition in the food delivery market. One strategy is to offer discounts and promotions to attract new customers. For example, launching the business with introductory offers such as a free side with a main, a “meal deal” option, or a discount on orders over a certain amount can be a great way to catch the attention of potential customers.

Once you have successfully gained customers, it’s important to keep them coming back. One way to do this is by offering delicious food that aligns with the trends, tastes, and preferences of your target market. Be aware that consumer preferences change frequently, so if you can’t offer the food that your customers are craving, they will likely move on to the next option.

Another key aspect is to ensure that your customer service is top-notch. Your customer service team should be highly responsive, friendly, and offer help and support. Customers not only buy the food, but they also buy into the brand, and great customer service can play a big role in building loyalty.

Lastly, offering a loyalty scheme is another way to encourage repeat customers. This can be something like a rewards program where customers earn points for each purchase and can redeem them for discounts or free items.

Poor quality and quantity of marketing

Are you a delivery-only kitchen feeling left out of the restaurant spotlight?

No worries, there’s a way to make your online food business shine just as brightly as those fancy high-street eateries. The key is to focus on building a strong online presence through creative digital marketing strategies. Get those taste buds tingling with mouth-watering food photos and videos that show the behind-the-scenes of your kitchen.

Partner up with foodie influencers, or run exciting promotions and contests to attract new customers. By building a loyal customer base and creating a unique online presence, you’ll be sure to stand out in the competitive world of food delivery.

So, don’t just rely on delivery apps!

The solution

So you want to take your food delivery biz to the next level? It’s time to focus on your marketing strategy!

First things first, figure out your target audience. Who are you trying to reach? Once you know that, you can start planning your marketing strategy. And let’s be real, what’s more mouth-watering than a delicious social media post? Platforms like Instagram and TikTok are a great place to start. But don’t stop there, think outside the box and explore other options like flyering or even billboards.

The point is, you can’t afford to not have a marketing strategy in place if you want to compete with the big players. So, take some time to plan and execute a strategy that will help you reach your target audience and bring in more customers. Trust us, your taste buds (and your bank account) will thank you!

Get your price right

Deciding on a pricing strategy for your food business can be a tricky task. With a constantly changing customer base and volatile food and supply costs, it’s important to find a balance that works for everyone.

One approach is to use a cost-plus pricing strategy, where you determine your costs and then add a markup to determine the price. However, this can be difficult to implement in a market with fluctuating costs. Another approach is to use a value-based pricing strategy, where you determine the value that your product or service provides to the customer and base your prices on that.

It’s also important to note that using offensive or defensive pricing models to compete with your opponents may not always be the best approach and may negatively affect your business in the long run. It’s essential to carefully analyze your costs and competition and come up with a pricing strategy that works for your unique business.

Ultimately, the key to successful pricing in the food business is to constantly monitor the market, review your costs, and make adjustments as necessary. Keep your prices fair and competitive, and most importantly, communicate effectively with your customers.

The solution

Another approach to consider is implementing dynamic pricing, which adjusts prices based on real-time demand and market conditions. This can help you stay competitive while also ensuring that your prices cover your overhead costs. Additionally, you can consider offering promotions, discounts, and loyalty programs to attract customers and encourage repeat business.

It’s also essential to keep in mind that transparency is key when it comes to pricing. Communicating your pricing strategy and any changes clearly to your customers can help build trust and loyalty.

In summary, setting a pricing strategy for your food delivery business can be challenging, but by staying competitive, monitoring market trends and consumer behavior, and keeping your overhead costs in mind, you can increase your profit margins while keeping customers happy.

Varying food quality

Delivering delicious meals to hungry bellies is a tasty challenge! But, getting that hot and fresh meal from the kitchen to your customer’s doorstep can be a real test of endurance. It’s like a food marathon on wheels, with your meal braving the elements on the back of a trusty bicycle.

But, no worries! With the right techniques and tools, we’ll make sure your meal arrives at the finish line just as scrumptious as when it left the kitchen.

The solution

Before you start selling, invest in premium packing materials to maintain the quality of food orders on their journey.

You should also ensure every delivery driver has an adequate, insulated food bag before they collect orders from your pick-up point and deliver the food to the customer.

Sharethere’s food delivery kitchens are ready and waiting to fuel your business.

Whether you want to sell your food on UberEats, Deliveroo or independently or take up residency in a pub kitchen or food market, our kitchens to rent in London and cold storage rooms can help you reach your goals.

Check out the Uk’s largest selection of kitchens to rent to get started!

A graph from Statista showing Uk food business revenue

How profitable are dark kitchens?

October 13, 2022
Dark Kitchens, Food Business, Kitchens For Deliveroo

How profitable are dark kitchens?

A Dark kitchen to rent, sometimes known as cloud kitchens or virtual kitchens have increased massively in popularity in recent years. Things really kicked off during the pandemic when large numbers of food truck owners, who could no longer rely on events and event catering, took to a dark kitchen to continue their operations.

Restaurants looking to expand and who had had success with their delivery menus also looked at a Dark kitchen as a way to drive up sales in new markets without the higher overheads and start-up costs of a traditional restaurant and to avoid the restrictions placed on them by the government. Some even downsized to delivery-only models once restrictions were lifted.

Now the dark kitchen model is here to stay!

Before starting any business it’s important to understand the costs involved and where you can profit the most from your food business. Keep on reading as we take a look at how to maximise profits from a dark kitchen and why they could work for you.

How do food delivery businesses operate

First of all let’s take a look at how the dark kitchen business model works:-

Dark kitchens have no shopfront and are often situated in ‘subprime’ locations. That’s not to say they aren’t well situated, just that they don’t have the high presence of a restaurant.

They require less staff (no front of house) and customers don’t have direct access.

Food is collected either by a delivery app rider (Deliveroo, Just Eat, Uber Eats etc) or by D2C delivery drivers employed by the restaurant

Profit margins of a food business

Let’s cover the basics first:-

Before going any further let’s cover the difference between your revenue and your profit margin.

Your profit margin is the difference between your total sales (revenue) and your costs to achieve this revenue. The difference between the two is your profit margin.

Let’s break down the main costs you will incur while running a food business:-

Rent for your premises

Staffing

Produce and Stock

Gas, Electric, Water

Rubbish Collection

Marketing

Repairs and Maintenance

Commercial cooking equipment

Card processing fees and cash handling costs

Point of sale running costs

Taxes and VAT

It’s imperative that you understand the difference between revenue and sales. It’s impossible to run your food business without having at least a basic understanding of how the two are related. Having a grip on these basics will allow you to understand how to increase revenue, how to increase sales, project your cash flow and even how to lower your running costs and reduce waste.

Different types of food businesses operate at different scales and each has their own individual costs associated to them.

To give you a rough guide to the costs involved, as a general rule of thumb a brick-and-mortar restaurant will normally run on a profit margin of 5%. For every £1 of revenue, 5p is profit. That being said it’s almost impossible to put a figure on what makes a great business or a great profit margin.

For example, a food business without a fixed kitchen, such as a small food truck or mobile catering operation may have profit margins as high as 20%. The downside to this is that their revenue will be much lower than a delivery business or restaurant business as they do not have the luxury of repeat customers in many cases.

However, the outlook for the UK restaurant industry is full of promise with a very bright outlook. The latest figures from the OFNS and Statista show that the Uk food and Beverage industry has increased year on year up until the pandemic of 2020.

The latest statistics are yet to be released but many industry experts expect a return to an annual year-on-year increase with the UK food and beverage industry expected to be worth a staggering £70 billion per year. The OFNS recently announced that in the UK, in 2020, over 40,000 food businesses recorded a turnover of between £100,000 – £250,000 PA. This is expected to increase along with the Statista outlook.

How to work out the difference between gross and net profit?

There are two types of profit. Net and Gross.

Gross profit is calculated by subtracting the cost of a product from the sale price of a product. Gross profit is a good way to guage an overview of your business and it’s day to day profitability. However, gross profit doesn’t show the true cost’s or profitability of your business.

Net profit provides you with a much clearer picture of where the business is financially and if you are indeed making a profit.

To work out your gross profit margin we need to deduct all of the costs associated with running your business. For a food business, the main costs will normally be, kitchen rent, staffing costs, utility bills, point of sale and cost of production.

How to calculate gross profit margins:

Retail price minus the cost of the product divided by the retail price

Let’s look at a simple example of this;-

You sell a burger for £10.00

The cost to produce the burger is £5.00

The calculation would be £10-£5= £5

£5/£10= 0.5

0.5×100= 50% This is your gross profit margin

How to calculate net profit margin:-

To calculate your net profit margin we need to use the following calculation:

Total retail sales minus total expenses (not just product cost but all business costs) equals your net profit margin

Let’s try an example

Your total retail sales for October were £100,000 with total costs of £50,000

£100,000 minus £50,000 = £50,000

£50,000/£100,000= 0.5

0.5 x 100 = 50% net profit margin

Are Dark kitchens more profitable than a restaurant?

So let’s get to the nitty gritty. What s more profitable? A Dark kitchen or a traditional restaurant?

There are many benefits of a dark kitchen, especially profitability and how you can increase those profits compared to a bricks-and-mortar restaurant. Let’s look at some of these below:-

Lower operation costs

Lower rent overheads

There’s no doubt that renting a dark kitchen or food delivery kitchen is cheaper than bricks and mortar restaurant. You don’t require the additional size required for a restaurant such as space for dining, customer toilets, and an area to meet and greet diners. You also save the refurbishment costs associated with creating a fit out for diners which can run into the £10,000’s and often more. Instead, costs can be focused on premises in a prime position that is perfectly suited to your size.

Lower staff numbers

By losing the front of the house you save a lot of money on the staff roster salaries, administration and management. There is no need for waiters, bar staff, front-of-house management etc. Instead, focus on recruiting the very best chefs who can give their sole focus to creating great food.

Additional cost savings

Signage, fit out, cutlery and crockery, furniture, glassware and so on and so forth. These are all costs you will now save when choosing a ghost kitchen. When you add the staffing costs, logistics and rent savings into the mix things really start to add up.

Reduced costs and time saving

Starting a food business, let alone a restaurant will normally be one of the biggest investment you will ever make. But by choosing a dark kitchen, it doesn’t have to be this way.

The barrier to entry of opening a restaurant is huge. The investment required to start and run, normally at a loss for the initial launch period is huge. The advent of dark kitchens has lowered the upfront costs tremendously, bringing the dream of your own business much nearer than you might think.

By starting your food business from a commercial kitchen it removes much of the stress and associated costs of opening a food start up and provides a much quicker route to profitability.

Save yourself both cost and trouble by choosing a commercial kitchen to rent and avoid the pitfalls of a brick and mortar start up, such as;

Finding a High St unit or restaurant in a suitable location

The costs of fit out, furnishing, and more

The legalities of taking in a long commercial lease

The cost of a kitchen fit out

Hiring a large number of staff

The large upfront cost or the need to secure business finance

Improve your chances of success

As we’ve discussed, due to the high initial start up costs of High St outlet, a lot of restaurants never reach profitability and the runway before they do is, on average, 3 – 5 years.

The importance of reducing costs when starting out cannot be overstated. Lower capital investments and lower operating costs, equal more chance of success.

If you’re looking for a dark kitchen or commercial kitchen to start or expand your food business, you’re in the right place. Share There have flexible commercial kitchens to rent in exciting and prime locations across the UK. Perfect for giving you the best chance of success with your new food business and increasing profits when looking to expand!

Check out our current selection of dark kitchens to rent, pub kitchens to rent and commercial kitchens to rent. Or call us to discuss your requirements in further detail – we’re always happy to help!

How To Improve Dark Kitchen Profit Margins

Ways to improve your kitchen’s profit margins and profitability

Simplify and streamline your menu

Minimise your food waste

Rent a space that fits

Market fit and your price point

Get your name out there

Build on brand reputation

Build relationships with your customers

Run promo’s and consider loyalty schemes

Increase your customer conversion

Increase your average order value

Related posts

How to use tech in a commercial kitchen

Food production

Kitchen equipment

Task management

Staff management

Food waste

Health and safety

POS systems

Overcome the issues of starting a food delivery business

Over come the issues of starting a food delivery business

The issues and fixes for food delivery companies

The competition: Issues with customer retention

The solution

Poor quality and quantity of marketing

The solution

Get your price right

The solution

Varying food quality

The solution

How profitable are dark kitchens?

How profitable are dark kitchens?

How do food delivery businesses operate

Profit margins of a food business

How to work out the difference between gross and net profit?

Are Dark kitchens more profitable than a restaurant?

Lower staff numbers

Additional cost savings

Reduced costs and time saving

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