How To Start An Online Restaurant Business?

Are you an entrepreneur and looking to begin with an online restaurant business?

Well, then learning about the current market can be helpful along with identifying and implementing core strategies to start an online restaurant business. 

We have already done it for you. 

In this blog, you can find all the essentials related to concepts, features, steps, and more. 

Ready to begin?

Overview of the Online Restaurant Business: Market Size and Key Industry Statistics

A virtual restaurant is an online business that operates exclusively through digital orders, making it different from conventional dining.

These businesses are also named ghost kitchens or even cloud kitchens. 

Along with this, virtual restaurants are redefining dining by capitalizing on the burgeoning trend related to online food delivery. 

A virtual restaurant is an extension of the brand which is dedicated to getting non-virtual food concepts within the hands of to-go customers.

Here, you can optimize an integrated restaurant online ordering system with the help of digital technologies. 

The online restaurant business enhances the overall industry revenue. The global online food delivery services market size is estimated to be USD 380.43 billion in 2024 and is further projected to grow at a CAGR of 9.0% from the year 2025 to 2030.

Along with this, the online food delivery market in the United States is further expected to reach a projected revenue of US $46.9 million by the year 2030.

Here the market size of the global online food delivery sector is estimated at over one trillion U.S dollars in 2023, over which 630 billion dollars was generated through the grocery delivery segment.

Additionally, by the year 2029, the online food delivery market is further forecasted to reach 1.85 trillion U.S. dollars.

With these stats, are you ready to start a restaurant online business?

Then, let’s proceed with the given section. 

Types of Online Restaurant Businesses – Which Model Suits You Best?

Before you prefer to build a restaurant app or a website, it’s vital to learn about all the different online restaurant businesses that the users can begin with. 

Here is the list of online restaurant business models to consider.

► Ghost Restaurants or Cloud Kitchens

One of the trending an online restaurant business can be considered a ghost restaurant. These are focused on delivering food instead of offering dine-in options. 

The ghost kitchens do allow the kitchen space to operate as a commissary to others, this helps to share costs and even can exist in the lower-overhead spaces rather than a standard restaurant. 

One of the key requirements for a cloud kitchen can be a point of sale (POS) system that is designed to accept orders from various channels including delivery aggregators as well as online ordering platforms. 

► Order Only Model

In the order-only business model, here the platform owner is responsible for arranging the food orders and delivery that can be handled via the restaurants or via third-party delivery aggregators. 

Along with this, it is a scalable business model with a large scope for expansion. Here the upfront cost of starting an online restaurant business is also low. 

Additionally, here the restaurants can be responsible for handling the diversified food deliveries. 

► Order and Delivery Business Model

In this type of business model, the online restaurant business owner manages both parts including the ordering and delivery aspects related to the online food delivery business. 

Under this model, you can offer convenience to the target users by providing them an ease of ordering. 

It is a diverse business opportunity that can help you serve a wide range of customers.

Here the users can discuss diversified business models for online food delivery businesses. 

► Reservation Model

You can go for a restaurant reservation model when it comes to starting an online business. 

In this model, the restaurants may cater to the specific demands of the customers who prefer to have a convenient dine-in experience. 

Here through building a reservation booking marketplace, the businesses can adopt the reservation of tables and may connect restaurants with the users who are looking to the pre-booking in the restaurants. 

► BOPIS (Buy Online, Pick-Up In-Store) Model

Through this business model, the businesses can allow the users to consider a buy-and-pay option for their food orders online that the users can pick later from the restaurants according to their availability. 

The business model is a part of the multichannel shopping trend that provides diversified business opportunities.

It further helps to reduce the overall operational cost and offers convenience to the target users. 

This is a business model, where you can provide users with a diversified platform, and freedom to book and take their order on the go, or while traveling. 

After considering the types of online restaurant businesses, let’s proceed with “How to create an online restaurant business?”

Step-By-Step Guide to Starting an Online Restaurant Business

A restaurant reservation system development is all about identifying the right procedure.

Confused about “how to start an online restaurant business?”

Well, the given steps define it all.

Step 1. Idealization

One of the foremost steps that you should consider here is to begin with an idea. Without an idea for the app, you cannot begin with the business. 

Thus, here all you need is to continue with the idea for your restaurant and then evaluate whether it will help you to gain potential users or not. 

Under idealization, you can discover different ideas for your online restaurant business. It will be effective in delivering potential benefits to the target users. 

Step 2. Market Analysis

Now, under this step, you should evaluate the overall market to identify whether your selected idea will work here or if you are required to opt for something else.

Well, after thorough research of the market, you can identify the current users’ demands. 

Market research will also be effective in learning about the competitors in the potential market.

This step includes gathering and analyzing data to understand the market size, target audience, growth potential, along the competitive landscape. 

Here, you are required to perform the actual assessment of the target population, competition, and needs for marketing the product and services. 

Step 3. Connecting to a Team of Developers

Under this step, it is essential to hire mobile app developers. These should be skilled personnel. It is considered a detailed assessment of a market within a chosen industry.

This step encompasses the potential customers as well as their buying habits. 

You should include a team of developers who are able to understand your ideas and abilities. If you link to the developers, it is important to evaluate their skills and location. 

Additionally, with this step, you can be able to link with the potential developers after analyzing all the perspectives of cost, skills, and others. 

Step 4. Discussion of Ideas and Strategy Planning

Now, it’s time to proceed with the discussion of online restaurant business and related ideas. Here it’s all about going ahead with the strategic planning. 

You can discuss all the strategies to start your online restaurant business. It is all about conducting a vision statement and stating the strategic objectives, mission statement, along long-term goals. 

Here, you can include all the important scenarios such as clarifying the vision for your business, evaluating the core mission, and stating the values of your target audience. 

Step 5. Market Segmentation

You should know about your target market well, before heading into the same. Here, you can identify the top users and the potential buyers in the industry. 

Under this step, you might start with selecting a platform such as conducting freelancing or selling the products. 

Identifying the target market will help you to define your menu for the online restaurant business.

It is one of the important scenarios that you can consider while initiating the business. 

Step 6. Figure Out the Complete Cost

You cannot begin with the online restaurant business, without figuring out the overall cost.

Here you can define the complete cost that can begin from market analysis and might end on launch. 

Well, you should evaluate the cost, to begin with the online restaurant platform, the type you might select for the business, and much more. 

Here, it’s essential to include different types of platforms, their design costs, technology stack, and much more. 

Step 7. Identify the Type of Platform

Well, when you initiate the online restaurant business, it’s essential to select the type of platform over which you can launch the same. 

Here you can select the type of platforms among websites or an app. The platform selection should be based on your target audience, along with creating a digital loyalty program, and much more. 

Under this step, you should evaluate the type of your business, and the project aim, and even select the prime location for the type of online restaurant business model. 

Step 8. Begin With the App or Platform

Now, it’s time to adopt and begin with the diversified app or platform. Here you can proceed with the UI/UX app design and  its complete color, theme, infrastructure, and much more.

You can even begin with the restaurant app design through identifying the type of website to start the online restaurant business.

Additionally, It is essential to build a strong social media presence while launching the app in the competitive market. 

Well, now you can proceed with the platform and prepare the cost to invest in the process. 

These were the steps to start an online restaurant business. Well, when you initiate the platform selection, let’s consider the type of features that you can include within the app or website. 

The following section may provide you a details.

Key Features of a Successful Online Restaurant Platform

Features are the blood of the website or an app. Let’s learn about the top features of a successful online restaurant platform. 

Here’s the detail of the best restaurant app features that you might consider for the app or a website.

♦ Payment Integration

It is essential to consider different methods of payment when it comes to online restaurant business. You might select the appropriate channel to receive the payment.

This can be effective not only for the app but also for the website. 

♦ Online Ordering

It is a very beneficial feature where the users should be able to check the complete menu for ordering their favorite dish from the restaurant.

This even helps the users and customers to avoid the long queues within their favorite restaurants. 

♦ Instant Delivery

Well, while selecting the online restaurant business’s platform, it’s essential that you can set different business hours for order pickup, food delivery, along table reservations.

With the restaurant food ordering system, the users might get their orders on time. 

♦ Table Reservation

If you have a model of online table reservation then including the feature of table reservation is important. It is a feature, where the users can fix, the date and time to schedule the food ordering.

Here, you might have access to the details of orders received and made successfully. 

♦ User-Friendly Interface

The user-friendly interface is the software that you can implement and select. Here it’s essential to include and define the infrastructure for your app.

It too serves as a gateway to a frictionless customer experience. 

♦ Order Management

You are required to include the feature of order management. Here it’s all about arranging diversified orders with the help of advanced technology.

You need to have a comprehensive online food ordering system that simplifies the orders. 

♦ Push Notifications

Push notifications are all about a short message that appears as a pop-up on the desktop or the app.

It displays text and rich media,  including images, or buttons, that help the user to take a specific action. 

♦ GPS-Based Feature

You can include a GPS-based feature in the app or over the website. Under this feature, the users can be able to track their order and even the location of the delivery person.

This feature is built to successfully help the users to get their orders on time. 

♦ Gamification

When it comes to gamification, you must look for this feature to engage the users over your website or app.

You can adopt the elements such as points, badges, and leaderboards, with the help of gamification, you can convert mundane tasks into interactive experiences. 

♦ Chatbots

Chatbots in online restaurant businesses can help answer fundamental questions, and they take the personalization level to the next level.

Additionally, over the chatbots, the users can gain information, offers, discounts, and follow-ups to handle basic queries. 

These are some of the important features to consider when you start an online restaurant business. 

Here you should note that the adoption of features will have a large impact on the overall restaurant app development cost.

Well, now let’s look for the key trends that you might include in the businesses when it comes to an online restaurant business. 

Latest Trends in the Online Restaurant Industry

Adding the latest trends in the online restaurant industry plays a crucial role in engaging potential users. 

Let’s cover the list of the latest trends, here.

➤ Contactless Payments

With the help of the feature of contactless payments, it does help the customers to pay for their orders even without touching the cash or any credit cards.

The digital payment systems are designed to provide convenience. 

➤ QR Codes

If you own a restaurant for dine-in or have a cloud kitchen, the QR codes are slowly replacing the menus.

With this feature, users can be able to order their favorite foods online and can even add them to the cart. 

➤ AR Menus

In the current era, the food industry is moving towards the greater visualization of menu options each day, as plain text has evolved into beautiful food photography.

This trend can create an immersive experience for the guests. 

➤ Automated Reservations

Through the help of automated reservations, online restaurant businesses can make online restaurant reservations a huge success.

You can adopt and implement automated systems for customer communications and payment methods that can help enhance the overall operations of the business. 

➤ Contactless Technology

Contactless technology revolutionizes the customer experience in restaurants from ordering to payments.

Here the users can have a leading point-of-sale system such as Toast is equipped with advanced touch-free payment and contactless table ordering technology. 

➤ Automated Reservations

With the help of an app or website, online restaurant businesses can include reservations.

Additionally, here you can count the example of restaurant reservation apps like OpenTable. By adopting the automation in the reservations, the users can efficiently bridge any gaps. 

➤ Quick Service and Fast-Casual

This trend in the online restaurant businesses offers full-service dining. Additionally, the limited-service and full-service restaurants are observing a positive growth in off-premise sales.

Here, you can provide the users an option to go for a quick service where they can enjoy food and can enjoy the fast delivery service. 

Considering these trends, you can go with starting an online restaurant business. 

Till now, we have discussed the concept of online restaurant businesses, their types, features, and steps to start an online restaurant business, along with the latest trends. 

Now, as we move ahead, let’s evaluate the different common mistakes along with their solutions that you can include while starting an online restaurant business. 

The following section can provide you with all the details. 

Common Mistakes and Their Solutions in Starting an Online Restaurant Business

While entering a restaurant business, you must go through the issues which might create a large impact on its functioning. 

Thus, here you can find the list mistakes to avoid while creating a restaurant app along with a website.

• Lack of Market Understanding

When you start a business, avoiding the need that can drive users towards your brand can even fail. Entering the market is about knowing your end users who are ready to use or consume the product. 

Without proper research, you cannot find the exact model for starting your online restaurant business.

Furthermore, your business may struggle to tailor to the growing needs of the users, which might result in missing the mark on satisfying the customer needs. 

• Untrained Staff

If your hired staff for starting an online restaurant business isn’t trained well, then it can create a wide risk for your business.

The unskilled staff will automatically serve your target customers poorly which will degrade your brand’s goodwill in the market. 

Additionally, poorly trained staff can lead to inconsistent service for your complete business. This displays a threat to your restaurant business and website. 

• Lack of Skilled Developers

If your business hires unskilled developers, then this can impact the overall functions and even fail in business.

Without skilled developers, starting the complete process of your business may be significantly delayed or canceled outright. 

A lack of skilled talent will impact your online restaurant business as with poorly trained or skilled developers you cannot create your dream app or platform. This might fail. 

• Ignoring Appealing App and Web Design

One of the worst ways over which your online performance might be impacted is via website design and branding. Here the users might find no responsive design or any kind of mismatched design. 

There can be typography mistakes that your app or website might face such as selecting any unclear or conflicting fonts. Here your platform can face graphics and image mistakes. 

• Not Segmenting the Users

If you ignore the users then they will ignore your online restaurant business. Thus, it is one of the important points that you cannot miss when it comes to starting an online restaurant business. 

Avoiding the actual users or customers will result in business failure. Well, here you will not be able to connect or achieve the target audience, without a significant segmentation. 

These are some of the challenges or mistakes that you are required to avoid when it comes to starting an online restaurant business. 

Well, let’s consider the following revenue models, as we have just discussed how you can invest in the cost of starting an online restaurant business. 

Revenue Model: How Online Restaurant Businesses Make Money

What are the top revenue models that you can adopt for starting an online restaurant business?

Let’s consider the following mobile app monetization strategies below.

► In-App Advertising

In-app advertising comprises displaying the ads by enabling the developers to monetize their apps. This can become one of the prime app monetization strategies for your business.

Here you can connect with third-party apps or businesses and can use their products and services to monetize the app. 

► Affiliate Marketing

When it comes to affiliate marketing, can be defined as a performance-based marketing strategy where individuals including content creators can promote the products or services.

You can act as an affiliate for other businesses to promote their brand and may charge a fee in exchange for the same. 

► Orders and Sales

A permanent and main source of earnings for your online restaurant business can be orders and sales.

This can help you to manage the overall operations of the complete business. When an individual orders food from your business, then you can ask them to pay for the food via an online payment method.

► Subscription Plan

Another and most prominent monetization strategy that you can adopt for your restaurant business is a subscription plan.

Where you can ask the users to subscribe to your app. This subscription plan can depend on different parameters such as different pricing options.

This can become one of the important and primary alternatives to earn money from the platform. 

► Partnership and Sponsorship

Your business can include partnership and sponsorship as an important monetization strategy to start an online restaurant business.

Here, the users can be able to have diversified options for ordering, if they connect with other brands or cafes.

For example, you collaborate your restaurant business with a drinks café and this may provide an opportunity for both to make money. 

These were some of the top online money-making strategies to consider here. Now, when you enter the online restaurant business industry, it’s important to evaluate the top apps or businesses that are already in this context. 

Let’s learn more about the same in the following section. 

Successful Online Restaurant Businesses and Their Growth Stories

To lead the online restaurant business industry, it is essential to learn about the key players. 

Well, here is the list of the top restaurant businesses that will help you to know about the apps, users, and competitors.

• OpenTable

OpenTable is an online restaurant reservation business that helps restaurants run smoother shifts, fill seats, turn guests into regulars, and create as well as sell dining experiences. 

You can create an app like OpenTable which may lead the overall restaurant business.

Through this platform, the platform can automate email campaigns using the diner profiles and may visit history data to frame personalized messages.

• Starbucks

Starbucks is a renamed and popular coffee chain. The platform is an American multinational chain of coffeehouses and roastery reserves that is headquartered in Washington. It is one of the biggest coffee chains that is engaging various users.

Well, here the cost to create a coffee app like Starbucks, can vary depending on different parameters including complexity of features, design, technology stack, and many others.

• ChowNow

ChowNow is one of the superior choices for restaurants that seek to amplify their online presence. The platform has a strong digital presence for increasing their online orders. 

The app is a great way for the dinners to browse their local restaurants on the platforms.

You can start an online restaurant business like ChowNow, which might help you to sustain yourself in the competitive environment. 

How Nimble AppGenie Can Help You Launch Your Online Restaurant Business

Are you searching for an experienced team of developers?

Well, you can partner with the Nimble AppGenie, which is a leading Restaurant App Development Company. Our team is ready to help you with the market analysis, identifying the top features, and much more. 

We are ready to help you with all the assistance and our team is ready to discuss with you all the essentials, effectively.

Conclusion

The online restaurant business can be initiated by learning about the different types of ghost restaurants, order-only models, reservation models, and BOPIS models.

Here you can include diversified features to initiate the business such as payment integration, online ordering, reservations, GPS-based features, gamification, etc. 

It’s important to learn about the challenges that your restaurant business might face. These issues can be a lack of market analysis, untrained staff, and a lack of skilled developers.

You might include diversified monetization models such as affiliate marketing, in-app advertising, subscription plans, orders, and sales. Connecting with the target companies can be helpful here.

FAQs

Niketan Sharma

Niketan Sharma is the CTO of Nimble AppGenie, a prominent website and mobile app development company in the USA that is delivering excellence with a commitment to boosting business growth & maximizing customer satisfaction. He is a highly motivated individual who helps SMEs and startups grow in this dynamic market with the latest technology and innovation.