Quick Answer
Ghost kitchen = steady daily delivery income (£12k–£17k/month revenue) with 10–18% net margins, but 20–35% goes to platform commissions.
Catering kitchen = fewer, larger jobs (£500–£5,000+ per event) with 30–50% gross margins and no platform fees, but seasonal demand.
Best option for most? Start with whichever matches your skills, then add the other model after 3–6 months for a hybrid approach.
The Two Models Explained
Ghost Kitchen
Steady daily delivery income
A delivery-only kitchen with no dine-in space. Revenue comes from orders placed through Deliveroo, Uber Eats, Just Eat, and direct channels.
£5,000–£15,000
£3,500–£6,500
High volume, lower per-order margin (£4–£8 profit per order)
200–500 sq ft, industrial/commercial zone
Key Advantages
- Predictable daily revenue from delivery orders
- Lower startup cost than catering
- Can run multiple virtual brands from one kitchen
- Scalable — add brands without extra space
Key Risks
- Platform commission eats 20–35% of revenue
- Dependent on delivery platform algorithms
- Intense competition in popular cuisines
- Limited direct customer relationships
Catering Kitchen
Larger per-job revenue
A commercial kitchen used to prepare food for events, corporate functions, weddings, and bulk orders. Revenue comes from contracts and bookings.
£10,000–£30,000
£2,500–£5,000
Fewer jobs but higher value (£500–£5,000+ per event)
400–1,000+ sq ft, with storage and prep area
Key Advantages
- Higher profit margins per job (30–50%)
- No platform commission fees
- Direct client relationships and repeat business
- Less dependent on technology platforms
Key Risks
- Seasonal demand — quiet in January, peak in summer
- Longer sales cycle (weeks to months)
- Cash flow gaps between events
- Requires more upfront working capital per job
Side-by-Side Comparison
| Feature | Ghost Kitchen | Catering Kitchen |
|---|---|---|
| Startup cost | £5,000–£15,000 | £10,000–£30,000 |
| Monthly fixed costs | £3,500–£6,500 | £2,500–£5,000 |
| Revenue per job | £15–£25 per order | £500–£5,000+ per event |
| Customer acquisition | Platform algorithms + marketing | Networking, referrals, SEO |
| Payment timing | Weekly platform payouts | 50% deposit + balance on delivery |
| Seasonal risk | Low — steady year-round demand | High — peaks in summer/December |
| Platform dependency | High — 70–90% via apps | None — direct client relationships |
| Kitchen requirement | 200–500 sq ft, basic fit-out | 400–1,000+ sq ft, storage needed |
| Staff needed | 1–3 (owner + 1-2 cooks) | 2–6 (varies per event size) |
| Time to first revenue | 2–4 weeks | 4–8 weeks |
The Hybrid Model: Running Both From One Kitchen
Many UK food businesses combine both models from a single commercial kitchen. Delivery orders fill quiet weekday periods while catering jobs provide high-margin weekend revenue. Heres how the hybrid model typically works:
Weekday Operation
- 15–25 delivery orders/day via platforms
- Morning: prep for delivery + upcoming catering jobs
- Lunch/dinner: delivery order fulfilment
- Revenue: £2,000–£4,000/week from delivery
Weekend Operation
- 2–4 catering events per month
- Friday: large-scale prep for weekend events
- Saturday/Sunday: event delivery and service
- Revenue: £1,500–£5,000 per event
Hybrid Model Requirements
- 500+ sq ft kitchen with separate prep zones
- Strong scheduling to avoid delivery/catering conflicts
- Cross-menu ingredients to reduce waste
- 2–4 staff who can handle both operations
- Adequate cold and dry storage
- Budget: £15,000–£25,000 startup
Which Model Should You Choose?
Choose Ghost Kitchen if...
- You want predictable daily income
- You have £5k–£15k to start
- You prefer working set hours daily
- You want to test food concepts quickly
- You are comfortable with technology
Choose Catering if...
- You have event/hospitality experience
- You prefer fewer, larger jobs
- You want higher margins per job
- You have a strong local network
- You can handle seasonal cashflow
Choose Hybrid if...
- You want to maximise kitchen utilisation
- You have £15k–£25k to invest
- You can manage two revenue streams
- You want faster break-even
- You have 500+ sq ft available
Related Guides
Ghost Kitchen Profit Calculator
Free P&L projection tool with break-even analysis for UK ghost kitchens.
Break-Even Calculator
Calculate your break-even point for any UK food business type.
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Written by
James Mitchell
Ghost Kitchen Operations Director & Industry Expert
Frequently Asked Questions
Is a ghost kitchen or catering business more profitable?
It depends on execution. Ghost kitchens typically generate £12,000–£17,000/month revenue with 10–18% net margins after platform commissions. Catering businesses can achieve 30–50% gross margins per event but revenue is less predictable. A well-run catering business doing £8,000–£15,000/month often keeps more profit because there are no platform commissions eating 20–35% of every order.
Can I run a catering business and ghost kitchen from the same kitchen?
Yes, the hybrid model works well. Use delivery orders to fill quiet periods between catering jobs. You need a kitchen large enough for both operations (500+ sq ft), good scheduling to avoid conflicts, and separate prep areas for efficiency. Many UK operators start with one model and add the other after 3–6 months.
How much does it cost to start a catering business in the UK?
Startup costs for a UK catering business typically range from £10,000–£30,000. This includes kitchen rental deposit (£2,000–£5,000), equipment (£3,000–£10,000), food business registration (free), Level 2 food hygiene certificates (£25 per person), insurance (£400–£1,200/year), and initial food stock. You can start lower by using a shared kitchen at £15–35/hour.
How much does it cost to start a ghost kitchen in the UK?
A ghost kitchen in the UK costs £5,000–£15,000 to start. This covers first month rent + deposit (£3,000–£7,000), basic equipment if not provided (£1,000–£3,000), delivery platform setup (free), packaging supplies (£200–£500), and marketing budget (£500–£1,000). Managed ghost kitchen spaces like Karma Kitchen or Deliveroo Editions include equipment, reducing startup costs further.
Which business model has less risk?
Ghost kitchens have lower financial risk (less startup capital, faster revenue) but higher operational risk (platform dependency, competition). Catering has higher financial risk (more capital, seasonal gaps) but lower operational risk (direct clients, no commission). For first-time food entrepreneurs, ghost kitchens are generally lower risk due to the faster feedback loop and lower upfront investment.
Do I need different licenses for catering vs ghost kitchen?
The core requirements are the same: food business registration (28 days before trading), food hygiene certificates, HACCP documentation, and insurance. Catering businesses may also need a personal alcohol licence if serving drinks at events, and temporary event notices for outdoor catering. Ghost kitchens need delivery platform registrations and a food hygiene rating of 3+ for most platforms.
What is the hybrid kitchen model?
The hybrid model combines delivery orders (ghost kitchen) with event catering from a single commercial kitchen. Delivery provides consistent daily income while catering jobs deliver higher-margin revenue. A typical hybrid might do 15–25 delivery orders/day on weekdays and 2–4 catering events per month on weekends, using the same kitchen, staff, and many of the same ingredients.
How long does it take to become profitable?
Ghost kitchens typically reach profitability in 3–6 months, with break-even at around 30–35 orders per day. Catering businesses usually take 6–12 months to build a reliable client base, though individual events are profitable from day one. Hybrid operations can break even faster (2–4 months) because delivery revenue covers fixed costs while you build catering clients.