Cloud kitchens, one of the most profitable food business formats, are made up of low investment and risk, along with the ease of replicating and scaling the business.
Compared to a conventional dine-in restaurant, it takes one-third of the time and money to open a cloud kitchen because you do not need a storefront at a prime location and wait for staff to service customers.
Here are the things you need to consider to open a cloud kitchen business.
i. LOCATION & PROPERTY
The biggest differentiators between a traditional dine-in / takeaway restaurant and a cloud kitchen are location and property. No location with a high footfall and the prime property is required for a cloud kitchen. Instead, since there is no front of the building, it can very easily be set up in a 250-300 sq. ft. room. This greatly lowers the expense of opening a cloud kitchen as you no longer have to spend on the interiors and furniture.
The cloud kitchen can be located in a relatively inaccessible area, but with high customer demand, especially for a particular kitchen. Residential areas, backsides of the market, unused parking lots make a cloud kitchen a great place. Alternatively, as it tends to reduce the initial investment, you can also go for a shared kitchen room.
For many reasons, the acquisition of the correct licenses and certification is important to open a cloud kitchen. First, it would save you from legal problems to have the licenses in order. Second, since clients are unable to visit the store and search for hygiene, food protection, and preparation on their own, getting proper licenses gives them a sense of accomplishment. On your website and in your marketing campaigns, you should encourage these to give your customers confidence that the food you cook is of high quality.
FSSAI, GST Registration, and NOC from the fire department, etc., are the main licenses needed to start a cloud kitchen business. Do make sure that before starting a food delivery business, you have these in place.
iii. KITCHEN EQUIPMENT & PACKAGING
The equipment in the kitchen totally depends on the type of cuisine you serve. A stove and oven, refrigerator, cutting counters, knives, etc. are the basic equipment needed to start a cloud kitchen.
A critical aspect of operating a food distribution company is the packaging. It will end up damaging the whole consumer experience and giving a bad name to your company, no matter how good your food is if it’s not done well. Packaging also depends on the kind of food that you serve. To ensure the correct packaging of your food, you will need plastic containers, boxes, spoons, etc.
You don’t need a lot of people in your cloud kitchen because there is no front of the house. You can easily open a cloud kitchen with 4-5 people who concentrate on food preparation and delivery. The same chef will cook food for various brands if you have several brands operating from the same kitchen. Starting with a small team is advisable and as the incoming order volumes rise, you can recruit more staff.