Starting a restaurant business is tough because of high competition, complex regulations, and red tape. That’s why people are checking out Cloud kitchens. It’s a good option because you can get delicious food delivered to your doorstep easily and safely. Cloud kitchens are also known as dark kitchens, ghost kitchens or virtual restaurants. They’re great for startups that don’t want to spend too much money upfront.
A virtual kitchen can be the best option because it requires less investment. If you want to make a profit without spending a lot of money, starting a cloud kitchen is the right option. However, not all cloud kitchens are successful. Many entrepreneurs fail to implement their ideas properly. In this article, we’ll talk about how to set up a cloud kitchen and how much it will cost.
What is a Cloud Kitchen?
A cloud kitchen is like a restaurant, but it only does online food delivery and takeout. The cool thing is that it doesn’t need a storefront with dine-in space, so you can start one even in your little home kitchen! You don’t need to hire people to manage staff or worry about front-of-house labor and overhead. All you need is a menu that’s delicious and healthy, and you can connect with food delivery partners or even build your own food delivery app to start serving people. In short, a cloud kitchen is a commercial kitchen that offers online food delivery and takeout services.
Benefits of setting up a cloud kitchen
Cloud kitchen is a new and revolutionary business model that’s becoming really popular. Wanna know why? Well, for starters, it’s a quick and cheaper way to get into the restaurant business. And there are loads of benefits that come with it.
- One major advantage is that it’s way more cost-effective since you don’t need to hire hosts, servers, or valets. You only need to worry about paying kitchen staff and delivery agents. That means the operational cost is much lower than a traditional restaurant.
- Cloud kitchens are where you can experiment with new brands and menus without any extra investments. You can launch multiple brands without changing locations or investing in a new one. For example, if you’re running a Mexican cloud restaurant, you can easily start another brand for Thai cuisine without extending the existing menu!
- You get more flexibility with menus. You can change them up without worrying about reprinting physical menu cards every time. This saves a lot of time and money.
- Cloud kitchens allow you to track data and analyze customer behaviour. This helps you save additional expenses by scrapping items with fewer orders and executing new strategies to gain customers. You get to meet your customers’ demands with efficiency and lower wastage.
Tips to Setup Successful Cloud Kitchen Business
Establishing a cloud kitchen can be a challenging task, as its success is heavily reliant on a well-structured and robust workflow. If you have the determination to initiate a food delivery business and make it a triumph, it is imperative to familiarize yourself with the key steps involved in setting up a cloud kitchen business. Proper planning and execution of these steps will ensure a smooth and successful journey towards establishing a successful cloud kitchen.
Online ordering in a cloud kitchen setup
Online ordering is the primary source for delivery-only restaurants. It can get complicated managing orders from different sources, but a cloud kitchen POS can help by allowing you to accept and manage orders.
Processing an order in an online food delivery system
Once you receive the order, you must process it quickly while ensuring that it’s made just the way your customer wants it. To do this, ghost kitchens must have different teams of chefs for different types of food or brands.
But how do the chefs know what to make? That’s where the POS (point of sale) system comes into play. The POS kitchen display system shows the chefs the order and any additional instructions. This way, they can easily view the details and prepare the order.
Kitchen staff for cloud kitchen
If you want to start a successful cloud kitchen restaurant, the most important thing is to hire the best chefs. Virtual kitchens aim to provide customers with delicious meals and excellent service, so investing in quality chefs is crucial. Since there is no sit-down dining, there is no need to hire waiters, hosts, or other staff.
In addition to skilled chefs, restaurant owners will also need delivery personnel if they want to offer in-house delivery from their cloud kitchen setup.
Supply management
It is crucial to have a reliable system for managing your supplies. The way you manage your supplies for a virtual kitchen is the same as how you would manage them for a physical restaurant. However, it’s essential to have a good system in place to keep your suppliers organized and efficient.
Inventory management for delivery-only kitchen
Managing multiple brands under one cloud kitchen business can be a challenging task. However, with proper inventory management, it can become easier. A smart Point of Sale (POS) system can help restaurant owners to manage their inventory better.
A POS system allows you to view and manage inventory at any time, enabling you to keep track of the daily consumption of stock. Additionally, you can raise purchase orders for each brand based on their requirements. This helps you to stay organized and keep your inventory in check, ultimately contributing to the success of your business.
Location for Cloud Kitchen
When starting a cloud kitchen business, the location is really important. However, you can choose a location based on the type of customers you want to serve and what the market is like. You don’t need to have a fancy storefront in a prime location. You can start your business in a smaller space like a room, basement, parking lot or other places that might not be as noticeable.
Essential Kitchen Appliances for Cloud Kitchen
If you’re planning to start a cloud kitchen business, you’ll need to have some basic kitchen equipment. This will include things like-
- Exhaust hood
- Oven
- Fire suppression system
- Refrigerators and freezers
- Cooking Range
- Counters
- Sinks
- Commercial fryers
These are some of the essential items that you’ll need to have to get started.
Start a Cloud Kitchen Business, Hassle-free
Starting a cloud kitchen business can be a great way to make a profit with low investment. However, it is slightly different from traditional restaurants and requires some planning.
- The first thing you need to do is set up an online ordering system that your customers can access through the internet or their smartphones.
- Before starting the business, it’s important to know your customers’ demographics. Understanding their preferences will help you design your menu and target your marketing efforts. You can use online surveys, social media campaigns, and other tools to gather this information.
- Apart from cooking, you also need to have some experience in accounting, management, and marketing. This will help you run the business more efficiently and profitably. It’s also important to analyze your competitors to find ways to improve your delivery-only kitchen.
- While setting up a cloud kitchen costs less than building a traditional dine-in restaurant, you still need to bear some initial costs. You will need to invest in equipment like ovens, microwaves, utensils, burners, and more. It’s also important to equip your kitchen with upgraded technology like mobiles, laptops, tablets, and POS systems to manage everything from receiving orders to delivery.
- Before you start your cloud kitchen business, you will need to get an FSSAI license. This license regulates everything from food storage to preparation and delivery. You will also need to spend some money on proper packaging, pandemic precautions, and an organized delivery system.
Starting a cloud kitchen business requires planning, research, and investment. But with the right approach, it can be a profitable and rewarding venture.
Most Popular Cloud Kitchen Business Models
Cloud kitchens are becoming popular among food entrepreneurs because they offer an affordable way to start a restaurant business. These kitchens operate on a delivery-only basis, without any dine-in or takeaway options. There are six types of cloud kitchen business models, each with its own unique features.
Brand-owned single cuisine
The first model is where one brand owns a single cuisine kitchen. This means the kitchen only produces food for delivery and does not have a physical restaurant. This model is affordable because there is no need to rent additional space for diners.
Separate dine-in
The second model is where a restaurant already has a dine-in option but adds a delivery or takeaway option as a side business. This model is low-cost until the restaurant needs additional staff or processes.
Shared kitchen with Separate dine-in
The third model has a separate dine-in restaurant that operates in a shared kitchen space. This is more expensive than the first two models because the shared kitchen must be rented and equipped, and the dine-in restaurant must be maintained.
Hub and Spoke
The fourth model is called “hub and spoke”. Multiple restaurants share a centralized kitchen, which is more expensive because of the cost of labour, pop-up locations, and other expenses.
Multiple virtual brands
The fifth model is where one cloud kitchen runs multiple brands under one roof. This model can be low or medium cost depending on equipment, space, and rent.
Shell-kitchen
It is a delivery-only kitchen that specializes in one cuisine and has minimal overhead costs. This model is the most affordable.
Wrapping up!
If you want to start a cloud kitchen business, you gotta work hard from day one. First, figure out the right cloud kitchen model for your business, find a solid mobile app development company to create a professional platform, budget accordingly, and more. To make things easier, you can check out Foodiv – they’ve already designed, developed, and launched a hundred similar platforms.
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