Are you thinking of starting a cloud kitchen in 2023? Do you want detailed information on how to start a cloud kitchen? Then you have reached the right place, as this blog discusses the detailed steps of starting a cloud kitchen in 2023.
What is a Cloud Kitchen?
A cloud kitchen can be taken as an online restaurant but with no address. Yes, as it is called a cloud kitchen or ghost kitchen, or dark kitchen, these kitchens cannot be seen by customers. Cloud restaurants offer home food deliveries or take-away services but not the dine-in.
Cloud or Ghost kitchens are becoming increasingly popular, especially in urban areas, as it requires less overhead and can be run with a smaller staff.
Why Should You Invest in a Cloud Kitchen Business?
As we all know, starting a cloud kitchen business offers many benefits over dine-in restaurants. However, physical restaurant businesses can also grow their business by setting up an online food ordering system in their restaurants.
Here are the many advantages of a cloud kitchen business.
- Low Overhead
Cloud kitchens are equally preferred by startups and established food business owners as it costs less upfront investment. Setting up a cloud kitchen does not require expensive decor or interior or flooring. Further, you can save substantial property taxes for your commercial kitchen space. Startups on a constrained budget can also begin their cloud kitchen business from home.
Food-ordering business owners can also save labor costs, as no hospitality staff is required to serve or attend to the customers.
- Quick Deliveries
Cloud kitchens were introduced to satisfy the growing demands for quick or instant deliveries. Big Food delivery brands opened their cloud kitchen outlets to deliver food orders more quickly. So, find a location for your cloud kitchen close to areas where you offer food delivery services.
- Enhanced Customer Satisfaction
When food business owners invest and spend less on expensive restaurant decor or interiors, they can keep their prices low. With quick food deliveries and cost-effective pricing, you can delight more customers. More satisfied customers mean they will like to order from you more. Thus, you can create a loyal customer base for your cloud kitchen business.
- Manage Multiple Brands
With a cloud kitchen, restaurants and food business owners can start and manage multiple brands. Maintaining a cloud kitchen business is cheaper rather than a dine-in restaurant. Many big food delivery businesses or restaurant brands start and run cloud kitchen outlets with different names.
How To Start A Cloud Kitchen Business? Step By Step Guide
- Know Your Customers, Market, & Competitors
You can set your foot firm in the market if your research is done. So, cloud kitchen business owners should first study their customers, competitors, and current market trends.
When you know what your customers prefer to eat, you can pick the cuisines you will serve. Next, knowing what your peers are serving, what and how you can serve better will give you a firm grounding. The market is too competitive, so you must be prepared for the competition.
- Choose your Cuisine
The first step is to choose the cuisine you want to specialize in. Because this will be the focus of your menu and will help you attract customers, there are many cuisines to choose from, so think about what you’re passionate about and what would be popular in your area.
- Find a Commercial Kitchen Space
Next, you’ll need a commercial kitchen space to prepare your food. Though you don’t need a kitchen space in the prime area as you are not offering a dine-in facility, it should be a commercial space to facilitate quick deliveries. You can take a kitchen space on rent or work out a deal with a local restaurant or catering company.
- Create a Menu
Once you know your target audience, you can create your menu keeping their preferences in mind. Only include a few dishes, as they will be hard to read and will grab little attention from your customers. Pick a few signature dishes that you know you can make well. You can always add more items later as you get more comfortable with your kitchen setup.
- Get a license
To run a food business, you need a license to have proper licenses. If you have your legal documents in place, you can run a stress-free, risk-free food delivery business.
The FSSAI license is a must as it regulates your food quality, and every food business owner needs to renew it every five years.
Some other licenses you need include the following:
- GST Registration
- Municipal health trade license
- Fire license and health trade license, and more.
- Kitchen Staff & Equipment
Once your cloud kitchen space is ready, it’s time to hire the labor. You need three or four chefs per your audience or the number of food orders you serve daily. In addition, you need some junior staff to assist chefs in cutting or chopping or with other kitchen chores.
The next thing is to gather the equipment for your cloud kitchen to make it convenient for your chefs to prepare the food orders. The kitchen equipment may include burners, ovens, spoons, woks, pans, etc.
- Promote Your Business
Once you’re up and running, promoting your business is essential so that people know you exist and can order from you. Create a website and social media accounts, and include your cloud kitchen’s address and delivery information.
Food packaging is the way to create your brand reputation, so ensure that the packaging is of superior quality. Use containers that avoid spillage or leakage during delivery. Also, you can go eco-friendly and use biodegradable packaging.
After the pandemic outbreak, customers are more concerned about food safety. So, pack and seal the food packages properly to avoid contamination.
- Food Delivery
Cloud kitchen owners can tie up with a delivery agency for food deliveries. They will charge a commission for every delivery. Some online food delivery platforms you can collaborate with are Swiggy, Zomato, or UberEats. You can start your food delivery service if you want to keep your profits private from third-party delivery agents.
Bonus Point: Popular Examples of Cloud Kitchen Startups
Many popular brands and food startups have invested in the cloud kitchen business. Here are a few famous ones. Have a look.
- Rebel Foods
The tech brand offers infrastructure, technology, and space for the cloud kitchen to restaurants.
Swiggy has started a cloud kitchen service to boost sales and expand its customer base.
- Karma Kitchen
The brand uses commercial spaces to convert them into cloud kitchens.
Ikcon is a famous brand in UAE and offers cloud kitchen networks. The brand has over 15 operational kitchens with advanced technology and trained chefs and has onboarded over 70+ brands till now.
Zomato, the famous food delivery brand, has expanded its reach via cloud kitchens. The brand offers cloud kitchens to partner restaurants to deliver more food orders and expand their customer base.
Cloud Kitchens are a trending business and the time is ripe to invest in it. Food business owners can set up their cloud kitchens with a meager initial investment. We hope the above steps will help you open the cloud kitchen business easily.