20 Easy Steps to Start a Cloud Kitchen Business!
10 Mins Read
To start a cloud kitchen can be a million-dollar idea, if you are one among those who are willing to enter into food & beverage industry. The Cloud Kitchen Business can give a great start to your career. This cloud kitchen concept does not require a huge cost as is needed for a restaurant or a hotel. Eating out is loved by all. People go to restaurants or outlets or order online. Various brands have been serving unique food items for generations.
Embark on your culinary journey and turn your passion for cooking into a thriving venture with the groundbreaking concept of cloud kitchens. If you have a penchant for serving the best taste in town, DNY Hospitality, spearheaded by the ingenious Yash Dalwani, proudly stands as the pioneer of launching Cloud Kitchens in India. Here is how:
What is a Cloud Kitchen?
The Cloud Kitchen is a kitchen without a place for sitting and eating. Food is prepared, packed and delivered to your doorsteps. People order through websites or applications maximising the use of the digital era. ‘Necessity is the mother of invention’. The passionate and ambitious chefs decided to start a cloud kitchen as a way to cater to the society because of their confidence in serving the best taste.
However, this idea has turned into a breakthrough concept. Many leading brands are serving people with mouth-watering food items only because they took the risk to start a cloud kitchen.
Types of Cloud Kitchens
The concept of cloud kitchens is broad. It looks a mere kitchen when looked at first but it has a lot more in it bucket when it comes to its types. There are different ways to start a cloud kitchen. The common types are
Stand-Alone Cloud Kitchen
1 - Cloud Kitchen Chains
2 - Shared Cloud Kitchens
3 - Restaurant Cum Cloud Kitchen
4 - Home-Based Cloud Kitchen
5 - Co-Working Facility Management Cloud Kitchen
6 - Super Xl Cloud Kitchen
7 - Single-Brand Single Entity
8 - Single-Brand Single Entity
9 - Virtual
To start a cloud kitchen, a stand-alone cloud kitchen is the easiest. It is a kitchen in which one person can stand and cook alone. This type of kitchen is feasible only when a single person can prepare large quantity of food. It Eatables must have a longer shelf life. Cloud kitchen chains are small or medium-sized kitchens arranged in a series. It can be the best fit for those who want to serve different types of cuisines.
A shared cloud kitchen is shared by one or two brand owners. Restaurant cum cloud kitchen is a restaurant with a cloud kitchen owned by some other brand owner. Home-based cloud kitchens are the simplest to understand and start with. Mother, housewives, students, senior citizens, or anyone from home can start it. Co-Working Cloud Kitchen facility management cloud kitchens are the cloud kitchens in which two or three brands work together and manage everything.
Multi-Brand Single Entity cloud kitchen is a kitchen with single brand for taking orders of multiple brands. Super XL cloud kitchen have 10 brands under the area of 1500 sq. ft. Single-Brand Single Entity cloud kitchen is a kitchen with single brand for taking orders of single brand. It is advisable to start a cloud kitchen with multi-brand because it is in trend these days. DNY Hospitality has catered to 60+ brands out of 200 as cloud kitchens.
4 Major Advantages of a Cloud Kitchen
There are various advantages in starting a cloud kitchen.:
The first one is low capital and operational costs. You do not have to give a high amount of deposit and keep giving the rent of the space to be given to the customers.
When you start a cloud kitchen, it can take a little longer to please the palate of the people. However, once people start recognising the taste, it has the potential to grow by leaps and bounds.
Less staff members can do more work and serve multiple brands. Not getting orders for one brand is normal but one is sure to get them for multiple brands. It assures revenue generation.
The cost of capital saved in cloud kitchens is for high-tech kitchen equipment to serve uniform quality at a fast pace.
Step-By-Step Process to Start a Cloud Kitchen Business
When one determines to start a cloud kitchen, he must follow the step-by-step procedure. Cloud kitchen industry has shown bullish trends of growth and with DNY Hospitality, you will get a legal and ethical anatomy of SOP's to operate in. Here are all the steps at a glance:
1- Do Market Research
2 - Make a Business Plan
3 -Finalise a Service Provider
4 - Get Licenses and Do Documentation
5 - Do Menu Planning
6 - Make a Team
7 - Carry out Branding & Designing
8 - Finalise Location
9 - Perform Interior Decoration
10 - Start Kitchen Planning
11 - Plan Hygiene Maintenance
12 - Ask about Wastage Management
13 - Develop a Website
14 - Create a Marketing Plan
15 - Establish Business Tie-Ups
16 - Start a Cloud Kitchen
17 - Execute Digital Marketing
18 - Offer Discounts & Offers
19 - Keep Improving on Feedback
20 - Continue Marketing
1. Do Market Research
The very first step is to research the market where you want to establish a cloud kitchen. Prepare a questionnaire and find their answers. The questions could be:
1- Are people willing to eat out?
2 - How often people move out of the house or order online?
3 - How comfortable are people to order food online?
4 - What food is ordered?
5 - Can I specialise in cooking or arrange great professionals?
6 - What are the costs of raw material?
7 - What are the transport costs?
8 - What will be the profit margin after cutting costs and paying taxes?
9 - What are the legal requirements?
All these questions will help you understand cloud kitchen business well and how to start a cloud kitchen. This would help you move to the next step.
2. Make a Business Plan & Identify your Budgets
Now it’s time to make a business plan for your cloud kitchen business in a Microsoft Word File or a PowerPoint systematically. This business plan will bring everything in front of your eyes to start a cloud kitchen. It will trim down the chances of missing significant details. There will be your strengths, weaknesses, opportunities, challenges, and threats.
The major elements of a business plan are capital investment, the furniture, ingredients, human resources, place, area, costs, licenses, credentials, bank accounts, utensils, equipment, cutlery, etc. Putting everything in black & white will help in carrying out all the steps methodically. Write all ideas and analyze for constructive feedback and a healthy discussion will result in mitigating the risks in starting a cloud kitchen.
3. Finalise a Service Provider
After going through all the questions given above, you must have understood that to start a cloud kitchen you need somebody who is experienced. We highly recommend taking the help of a service provider to avoid losses. Their experience will not only guide you to go the right way but also help you reduce costs to a great extent. DNY Hospitality has 15 years of experience in the food & beverage industry.
Their primary job is to help those who are a newbie in the industry to establish their businesses successfully. They will help you execute your business plan like a cakewalk. A service provider is like a mentor in something new. Working with them is a sound decision because they save time and time is money. Therefore, start a cloud kitchen to add value with delicious food giving happiness and generate revenue recurrently.
4. Get Licenses and Do Documentation
Legalising a business is a mandatory step. Therefore, before you start a cloud kitchen remember to arrange for these licenses:
Local Authority License
Fire NOC License
Arrange for them before you enter the cloud kitchen business. DNY Hospitality will help you get all the necessary licenses also including GST without any hassles. You only contact us and let us know what all you are dealing with and we will show you the right path. It is also important to contact us as soon as you finalise to start a cloud kitchen because certain licenses and documents may take a little longer than you expect. The credentials as the restaurant owner are:
1- PAN of the Owner
2 -PAN of the Company
3 - Current Account Details
4 - Savings Bank Account Details
5 - GST Certificate
6 - Identity Proof
7 - Address Proof
5. Do A Right Menu planning
This step is going to be the most interesting because it has all to do with the toothsome dishes that would soon rule the hearts of people in town. Kindly choose the dishes that are liked by the people the most. Consider concept positioning in the minds of the target market first, taste preferences, age dynamics, area availability, production process of recipes, costing SOP’s, flavors and combos, packaging suitable for home delivery, etc.
6. Make a Team
Everything can be achieved alone also but having a team makes efforts easier. Always start a cloud kitchen with a team to execute or at least a consultant. You may or may not make them your business partners but helping hands are necessary to keep things take place on schedule. In cloud kitchen business, time is more important because hungry people don’t wait. The presence of team members facilitates in navigating to the right decisions with meetings and discussions.
The workload is also divided and distributed to all the members according to their specialisations. A sense of responsibility and motivation is in the air with a team. An individual may lack the zeal to keep working after he is likely to start a cloud kitchen but other team members can motivate. They keep working and keep growing.
7. Carry out Branding And Designing
Now it’s time to start designing. It will incorporate designing logo, staff uniform, cutlery, crockery, food package design, menu design, etc. Audio-visual technique helps in memorising. Creating unique visuals will create long-lasting impression and ensure brand recognition. Designs taglines, and promotional messages, also and guarantee 4 elements:
The logo will give an identity to your business. Taglines will create an image. Using them on all the associated things will make it stay in the minds of people. When you take our service to start a cloud kitchen, we leave no stone unturned in making you successful.
8. Finalise A Location
The next step is to search for a suitable location. These tools will help you know the areas of your city from where and what kind of food items are ordered or searched. This might not be necessary for you if you are getting the brand registered on an application like Swiggy or Zomato but do not forget to find out the keywords if you are dependent on getting orders on your website. This will decrease the cost a lot. If the destination is far away from the cloud kitchen, then it will be time-taking and the consumers can’t enjoy hot and fresh meals.
9. Perform Interior Decoration
The next step is to design the interior of the kitchen. Think out of the box without inculcating huge costs because customers will not see it. However, it should be beautiful and clean. A beautifully designed place is full of energy and this energy is transferred to the people working there. These are high-quality ethics to start a cloud kitchen that takes birth only to succeed.
Make a place for everything including the storage area, washing area, electricity arrangements, gas stove, drainage, exhaust, customised equipment, seating area, etc. The best technical plan for kitchen design can be availed by an expert and you will have no complaints at the end of the day.
10. Start Kitchen Planning
Start kitchen planning according to the menu since the kitchen will have all the equipment and everything to prepare dishes finalised in the menu. Utilising the space is the key. You should plan different sections for different dishes, if you have plans to operate in multi-brand kitchen. Choose the right consultant before you start a cloud kitchen for applying the most accurate civil and electrical engineering skills for storage, drainage, exhaust and ventilation planning. Select safe kitchen equipment with best quality steel.
11. Plan Hygiene Maintenance
In cloud kitchen business, the biggest challenge is maintaining hygiene after starting a cloud kitchen. There must be dedicated staff to continuously clean the platform, the floor, utensils, and everything. Cleaning the platform must be done every 15 minutes in peak season or time while getting orders continually. It would be helpful in avoiding diseases to the staff and the customers and prevent mismanagement. It will also give rise to good vibes to the people working there.
Therefore, their productivity will be better. Make up your mind and be determined for hygiene before you start a cloud kitchen because this is the biggest challenge in cloud kitchen business.
12. Ask about Wastage Management
Many restaurants and hotels are not able to manage food wastage and they tend to serve stale food using cold storage. This is a very unhealthy practice that you must try your best to avoid. The solution lies in procurement and liason. Arrange for raw material according to the demand. Define the needs accurately, formulate strategy, choose right suppliers who give competitive rates after negotiation, and implement CRM. If you want to serve fresh food to your customers, learn negotiation skills before you start a cloud kitchen.
13. Develop a Website
If you want to take your cloud kitchen business go long then you must invest in developing a website for your brand. Provide all the details related to the company, the food items, the address, the licenses, the mission, the vision, and everything related to the brand before starting a cloud kitchen. Connect a payment gateway to the website to help the customers who want to order online directly from your website. Arrange every convenience for your customers and they will be all yours.
14. Create a Marketing Plan
A marketing plan can be the key to success if it is created properly. Use the pictures of food items made by you. The principle of ‘‘whatever is seen, is sold’’ in the retail industry can work in cloud kitchen business as an added advantage. If people will be attracted to the pictures of food items then there are possibilities that they would be tempted to consume them also. Therefore, the marketing campaign must have a sufficient number of pictures with appropriate taglines.
When you start a cloud kitchen, use different ways of positioning your brand, for example, dry snacks can be advertised to be consumed at all times of the day. This would increase their consumption and thereby profit levels.
15. Establish Business Tie-Ups
Once you are ready with the entire business plan for cloud kitchen concept, then you must establish tie-ups with service providers like Zomato and Swiggy. With the help of these channels, it will be easier for you to earn money. These are the set platforms where people often visit to order food online. The necessary formalities are having a food license if it is a home kitchen and GST Number if you have commercial space separately. It is one of the mandatory steps to get success in the cloud kitchen setup.
16. Start a Cloud Kitchen
Now, when you will have done all the previous steps successfully, it’s high time to give a kick start to your cloud kitchen business. Reaching this step does take an effort worth delighting in future when it would pay off. The overall experience of starting a cloud kitchen is amazing and relieving. However, do remember, it is the beginning.
The actual journey will start from here. DNY Hospitality’s piece of advice: ‘Success is a journey, not a destination’. Therefore, keep working enthusiastically and contact us for anything related to a cloud kitchen. We have The Restaurant Store for these items:
1 - Kitchen Equipment
2 - Staff Uniforms
3 - Packaging Material
4 - Furniture & Lighting
5 - Technology Support
6 - Crockery, Cutlery, Utensils, etc
17. Execute restaurant Digital Marketing
Digital marketing is a very important step to grow every business once you start a cloud kitchen. People believe it to be very expensive but in actuality, it is not. The key is to hire an expert digital marketer or agency that can assure results. You need to invest for 3 months at least to start getting the results through digital marketing. What you need to keep an eye on, is the consistency of the articles, posts, guest posting, and other activities in favour of your cloud kitchen business.
18. Offer Discounts & Offers
Giving offers & discounts is one of the best penetration strategies in the food industry. If you are confident about starting a cloud kitchen, because the amazing taste that you deliver is the best. Then rest assured; DNY Hospitality is in your service to get all the costs recovered. You can give 50% to 60% of a heavy discount also to start a cloud kitchen successfully, making people try your delicacies once at least. Once they will be mesmerised by the taste, nothing can stop them from ordering multiple times.
19. Keep Improving on Feedback
After 3 months or 6 months when you realise that your cloud kitchen business is able to make a decent amount of money, you need to start researching more intensely. It’s time to compare and find out what it all was done that went right and what went wrong. This is possible only when you take feedback seriously and positively. Do remember your customers’ importance after you start a cloud kitchen and become a market leader.
20. Continue restaurant Marketing
Every business needs digital marketing tactics to survive. There is a lot of competition. Another fact associated with marketing is that it is an ongoing process. It is a simple activity to keep telling the consumers about the product you offer otherwise the competitors will take over the market in no time. Needless to say, keep changing your marking campaigning styles. Every three months there has to be an element of freshness and newness because other new entries will take your market share. The food industry has immense scope of innovation. Keep doing it and keep marketing it to fulfil your dreams. Food can, not only give us nourishment but also scads of money especially in the cloud kitchen business.
These 20 steps are crucial to start a cloud kitchen. We won’t say it is easy because it really needs a great deal of effort and dedication. However, we definitely say the results in terms of growing profits and branding will be stupendous. You must follow the instructions and utilise the information in the article. DNY Hospitality wishes you all the best in your journey of starting a cloud kitchen.