How to Set Up a Cloud Kitchen Business?
Cloud kitchens appear to be the only sensible method to handle high prices and limited earnings, especially with the development of cloud technology, which allows for online ordering, and the continuous Covid pandemic. The cloud kitchen, often known as the digital restaurant, is the most recent trend that has swiftly established itself as a powerful restaurant model in the food industry. With the current state of the restaurant industry, which includes fierce rivalry, exorbitant rents, and growing prices, Cloud Kitchens appear to be a wiser method to manage a restaurant.
What is a Cloud Kitchen?
A cloud kitchen is essentially a restaurant kitchen that accepts orders solely via online ordering platforms and does not provide dine-in service. Dark kitchens, ghost kitchens, virtual restaurants, and satellite kitchens are all terms used to describe cloud kitchens.
Cloud kitchens can have their online ordering website and app, or take orders through a variety of meal delivery platforms. Because the many food ordering platforms, such as Swiggy, Zomato, and others, are the major source of revenue for these online eateries, having a Point of Sales software that accepts orders from several sources is critical. This eliminates the time-consuming task of manually adding and calculating orders from various ordering systems at the end of each day.
Types of Cloud Kitchen Business Model
(i) Virtual Restaurants
This simply works within the confines of the existing restaurants. Even though they make use of the current restaurant’s physical infrastructure and resources, they operate under a separate brand name by registering with online food aggregators. The virtual brand can have a menu that is radically different from the current menu, allowing it to explore indefinitely.
(ii) Shared Kitchen Spaces
It is often known as the commissary, is a big coworking cloud kitchen infrastructure area where several firms may rent and operate side by side. Individual units dedicated to each brand may be found in these areas. These cloud kitchen areas are strategically placed at delivery points where there is a high level of client demand. Businesses may occasionally get utilities and equipment, as well as training and consulting services, from cloud kitchen spaces.
(iii) Standalone or Single Brand Cloud Kitchens
This is the purest cloud kitchen business model available. A single brand, a single kitchen, and no physical location. This is a restaurant without any seats or a proper physical location. This restaurant exists only in digital form and is self-contained. They usually have a modest menu and focus on a specific subject.
(iv) Aggregator Managed Cloud Kitchens
These are similar to communal cooking spaces, with the exception that they are run by online food aggregators such as Swiggy, Zomato, and others. In the industry, this model is known as the “shell.” The aggregator encourages their most trusted delivery partners to use these kitchens. These kitchens, however, are not only available to seasoned players but also newcomers. The aggregator’s online ordering system, menu intelligence, and delivery fleet assist the linked restaurateurs.
How to Set Up a Cloud Kitchen Business?
(i) Deciding The Location
The cloud kitchen business is a low-cost venture. A location may help you stand out from the crowd and establish yourself as a powerful player. You won’t have to worry about customer visits with cloud kitchens. Still, you’ll need a location with all of the necessary amenities and a demographically favorable consumer base to serve. It only needs to be located amongst high-demand consumers and be operationally and logistically sound for you to execute at your best.
(ii) Online Food Ordering System
After you’ve chosen a location, you’ll need to decide on the technology that will be used to receive orders. Swiggy, Zomato, Foodpanda, and other online ordering and delivery services will accept online orders on your behalf and deliver the food to your consumers. These businesses often take 18-30% of your revenue for every order. For certain FoodTech businesses, there is also a one-time integration cost.
(iii) Obtaining The Required Licenses
Customers don’t come to see what your facility is like, so they may be distrustful of the standards you uphold. You may use the licenses to assist you to speak out for your high standards and hygiene. These licenses will also keep you out of trouble with the law. FSSAI licenses, fire licenses, trade licenses, GST registration, and other permissions will be required before you can start your firm.
(iv) Staff Requirement In A Cloud Kitchen Restaurant
The team that works for a successful restaurant is the special recipe, with the Chef being the most important member of the team because they not only make the food but also assist in menu planning. A minimum of five personnel is necessary for an online kitchen. At least two cooks, two assistants, and one housekeeper are required. The pay of employees is determined by their level of experience.
(v) Point Of Sale Technology Needed For A Cloud Kitchen
You can have a flood of orders come in, but if you don’t have a system in place to receive them methodically, it’ll all be for none. Also, because orders might come in from a variety of sources, it’s critical to keep track of them all and provide thorough information for buttery-smooth operations. Point-of-sale software can assist you in doing so.
(vi) Kitchen Equipment, Raw Material, And Packaging
Depending on the cuisine and food you plan to serve, the cost of setting up the kitchen will vary. Setting up a cloud kitchen to offer products like burgers, pizza, pasta, and sandwiches, for example, will not cost more than Rs 2,00,000.
You may save a lot of money if you spend carefully on equipment by purchasing new electronic products and used equipment like tables, racks, and storage shelves. Heavy equipment, such as a chimney, deep refrigerators, and burners, might raise the price. The raw materials necessary to begin cloud kitchen operations vary depending on the sort of food you’re serving. It’s critical to find the correct vendors for the raw ingredients at this point.
You should set aside additional funds for packaging since it is so important in establishing customer brand memory. To keep the food’s quality throughout delivery, the packaging must be durable. Because you can no longer deliver a physical customer experience, your packaging must make a positive impression on the customer’s mind. Make sure the packaging includes your restaurant’s emblem and complements your restaurant’s theme and concept.
With the current wave of technology overtaking the restaurant business, it is evident that the cloud kitchen trend is here to stay and will only continue to grow exponentially. While cloud kitchen models are one of the most successful restaurant models with the fewest risks, you should look forward to this opportunity.