The Side Hustle of the Future: Virtual Restaurants
Why a Virtual Restaurant?
Over the years, my family and I have tried all kinds of side hustles. Once we even used a family trip to a famously large flea market to try and sell water and cookies from our local grocery store. We pulled a wagon around behind us as we walked with a sign that said “WATER $1 COOKIE $1.” Unfortunately, the weather was not as hot as we had expected. This meant our dream of being surrounded by thirsty customers didn’t come true. It wasn’t hot, people weren’t thirsty, and we didn’t sell much of our water. People didn’t want what we had for them. Of course, the next time we went just as shoppers, it was far hotter weather and those who had the water were selling it like crazy.
Having a great side hustle means you have to understand what people want. So what do people want these days? What is today's cold bottle of water on a hot summer day? One thing the research shows us is that people crave convenience. Life moves at a faster pace than it used to and people are prioritizing things differently. Services that provide great convenience at an affordable rate are easy to market and sell. A rapidly expanding industry in this sector is food delivery.
The food delivery industry was valued at $115 Billion at the end of 2020 and is expected to grow to $192.16 Billion in 2025. That is about 60% growth over an entire industry in 5 years! People are paying for the convenience of food delivery more and more. What does this mean for you? How can you get a piece of the pie? Start a virtual restaurant.
Don’t be intimidated. The term “virtual restaurant” may sound like a big undertaking to some, but they can be done incredibly simply. They do not need to be run by professional chefs, they have next to no overhead costs, and can make a profit even if you only work on it as little as 4 hours per week. There is even a company called HomeBasedClasses.com that will walk you through the legal and creative process in an online class for only about $40. There is a great amount of detail in this class and advice from those who already own a virtual restaurant. They even have a guarantee that their class can get you finished with your set up in 1 business day. They teach in great detail (much more than we could put in this article), what you need to know to be successful, as well as some things that you can skip to keep your money in your pocket.
How Does a Virtual Restaurant Work?
How does a virtual restaurant (also called
a virtual kitchen or ghost kitchen) work?
Some people may choose to run gourmet
or full-time virtual restaurants. That’s fine!
But it is not needed to make good money.
You don’t even have to be a great cook or
love cooking. The very basics of running
this type of side-hustle/business are these;
1. The owner chooses one or more dishes
that they can make to feed at least a family
of four for generally a cost of $5 or less in ingredients. This can easily be achieved with casseroles, pasta dishes, and more. Think foods that are generally appealing, simple enough that you won’t take an hour assembling them, and broad enough in the appeal that people want it. Plus, if you already have 10 restaurants in your area selling hamburgers don’t be the 11th
2. They rent a commercial kitchen space to cook in for between $5-$15 per hour to safely prepare and package food. There is almost certainly at least one local restaurant, church, hotel, or other commercial kitchen in your community that will rent to you. Remember to use that time wisely to cook and package a bulk amount of food. This time could be as little as 1 hour. Or, maybe one whole day per week is spent doing this and preparing up to $1,000 in food to deliver that day or freeze/refrigerate for later sales. A great return on investment for just one day of work.
3. They use an online meal marketplace (such as FamilyGrab.com) to list their meals as well as their preferred delivery or pickup times, and list their meals at about $20 apiece. These marketplaces advertise for your business so you can grow without spending tons of advertising dollars or worrying about how to advertise yourself.
4. They honor their delivery or pickup time and generally can make 60%-70% straight profit on their sales. You can continue to increase profits by increasing portion sizes, offering side dishes, and desserts at additional costs.
These points are the basics of the business, and there are many more guiding principles on HomeBasedClasses.com.
Amazingly, this offers a fantastic profit margin for any business. Generally in the U.S., a profit margin of 20% would be considered ‘high.’ A profit margin of 60% is a goal for more successful side-hustles. As we said above, 60% - 70% PURE PROFIT MARGIN in your pocket is possible with this virtual kitchen model as taught at Homebased Classes.
Talking to an Expert and Course Creator
There are already many virtual restaurants in operation, although many of them do not operate as streamlined as they could according to Denise Cook, Lead Researcher at HomeBasedClasses. Here’s what she had to say:
“While researching and compiling our virtual kitchen class, we had the opportunity to talk with a lot of virtual kitchen owners. We have been blown away by what they are able to accomplish with such a simple business plan. For example, one owner that we spoke to is based in Washington state. I won’t say any names now because I haven’t asked them if I could mention them here. Anyway, she has been so successful and had so many weekly orders, that she decided to open a storefront to work full time. She sells goods throughout the day in the storefront, as well as keeping her weekly meal orders. She has a timeframe once per week where her weekly order customers can come and pick up their meals. People can’t seem to get enough of her meals and she has a strong social media following as well. We both agree that this is the model of the future because it works! And we’re not the only ones profiting by it.
“The owner of the storefront business is an example of an owner who wanted to expand into having a brick and mortar, which is great! But it is not a requirement. I have worked with many that simply prefer to excel with the virtual kitchen model. Again I won’t say names but this owner who keeps coming to mind is also in Washington state. He is a retired fellow who runs a small business with his wife. They have their weekly regulars and take orders over the phone, text, or email as well. The wife cooks the meals and casseroles. She is not a trained chef, but simply has a variety of yummy recipes that she rotates through. They do their cooking one day a week in the afternoon, and then they start their deliveries around 3 or 4 pm that day. They have a texting process in place and text the customer when the food has been left outside so they don’t have to wait at the door for customers, which is great when busy families are not there but on their way home. In their process, all the freshly made food is delivered by dinnertime for the customers to have that night, or whenever they like. They also make food to sell frozen to be enjoyed another day of the week at the customer’s preference. Then the customer can save that meal for whenever they have a busy night or just don’t want to cook.
“The number of meals that can be cooked in a day, or even a few hours in a commercial kitchen can be as large or as small as your organizing allows and it can all be profitable. Let’s say you could make 5 meals in an hour. That is very doable. More could be done with good planning and organization, but let’s call that our number. Then, if each one is sold for $20, that would be $100 of sales for every hour of food prep. You do have to rent the kitchen and buy ingredients, but that can be easily done with a cost of $7 a meal, sometimes less depending on the ingredients, you chose to use. Remember, you can also add larger portions, side dishes, and desserts or drinks for additional costs. Delivery takes some time too but you can keep your customers within the distance you choose, which is usually in the same county you are licensed in. Or if they still want your food, you can offer them a pickup option. The point is that the process can be completely tailored to your time and what works for you.”
What do You Really Need for this Side Hustle?
Let’s think about what you DON’T need for a moment. Traditionally if you want to start a business in the food industry, you may find yourself paying for: building/food truck rent or purchase, bulk foodservice equipment, employees, seating and decor, bulk buying of food to keep your whole menu in stock, advertising, and more. You would be surprised how much money is lost in unsold ingredients that have to be thrown out in a traditional restaurant.
The great thing about a virtual restaurant is that there are almost NO overhead costs to start one. The basic essentials you will need are a business license, food handler’s permit, a place to cook in, and your first meal recipe. If you have purchased the online course from HomeBased Classes, they will coach you through the details of these things and much more.
Besides these, a willingness to try something new is needed. As with most side hustles, this will be something you have not attempted before. There may be some hesitation because of this. However, this particular side hustle comes with almost no financial risk. It also does not require you to be an expert in the industry. Use the tools available to you to educate yourself, and please do remember to have someone taste test your recipe before you sell it!
Who Can Do This Side Hustle?
This is a truly universal side hustle. Every
community has a commercial kitchen,
whether it is a restaurant, school, retirement
home, church, hotel, or another
establishment. There should be space for this
in every community. Every community also
has people who want good meals that they
don’t have to make themselves.
Stay-at-home parents, college students, retirees, full-time workers with a few spare hours a week, and more could all be profitable doing this. If you happen to live near a beach, amusement park, or other tourist attraction, your target customers could be individuals and families returning from a long day of play, who don’t want to drag their party to a restaurant. Getting on the local guide list of the Air BNBs in your area would go a long way for your sales.
The low startup cost of this side hustle means it can easily be done short or long term. Just need some extra money to tide you over? This works! Looking for a long-term source of income? Here it is! The overarching theme of a virtual restaurant is flexibility. You can tailor this venture to exactly your preferences.
Looking to the Future
Virtual restaurants are a crazy fast-growing industry. They are difficult for traditional restaurants to compete with. A traditional restaurant with a storefront has far too many overhead costs. This means that they cannot compete with the low prices that can be offered by a virtual restaurant. And lower prices are not the only selling point! More and more people are looking to buy online and have their food delivered for a nice meal at home. It is a convenience many people are beginning to expect, not only want.
The New York Times had an article recently about the high profitability of virtual restaurants, and how large companies like Uber Eats are encouraging virtual restaurant development. Even large chains like Chili’s, Chuck E. Cheese, Applebee’s, have found success opening their own virtual restaurants. They use their virtual restaurants to compete with online brands. As well as to compensate for fewer customers wanting to eat at a dine-in restaurant. Many of these are run as full-time restaurants, but you can take part as we have talked about in only a few hours a week.
This is truly where the food industry train is headed so hop on board! Get creative and imagine ways you can see yourself running a totally flexible side hustle and earning extra income for yourself and your family.
Moving Forward From the Author
I truly hope that this article will help
as many people as possible have
success. Ever since I found out about
Virtual Restaurants, I knew they would
be huge. All the research and months
of preparing and compiling information
for our online course only proved this
more and more to me.
I would love it if people utilized the
help we designed just for them on
HomeBasedClasses.com. But whether you decide to use our resources or brave it on your own, I am excited for you! I know that this market will continue doing great things in the near future.