How to Start a Home-Based Cloud Kitchen Business: Step-by-Step Process to Begin a Food Business from Home!
10 Mins Read
A home based cloud kitchen is a business idea that must have clicked in your mind as soon as you think of owning a restaurant. Lifestyle in the present decade has inspired us to become highly ambitious into the food business. A food business from home is one of the most convenient and economical options to earn a good amount of money with lowest investment.
In the era shaped by Covid-19, a home-based cloud kitchen is a promising idea for generating income from home. Wondering how to make it successful? Let Yash Dalwani, the visionary leader of DNY Hospitality, guide you. Learn about what a home-based cloud kitchen is, how to start it, and the opportunities and risks involved. Yash's expertise ensures you understand the industry nuances, making profitability achievable. Trust DNY Hospitality to navigate the thriving world of cloud kitchens with confidence.
What is a Home Based Cloud Kitchen?
A home based cloud kitchen is a place where food is prepared in the kitchen of a house. It is a commercial term. The prepared food needs to be delivered at the doorsteps of the people who order it on call or food delivery apps. A home based cloud kitchen does not offer space or place for people to come and dine-in. It can take orders from online platforms or phone calls only. There is also no takeaway service.
The most significant part of a home based cloud kitchen is the kitchen itself. Its relevant design is the key to success which needs kitchen planning. At DNY Kitchens, it begins with optimum space utilisation, division into sections for multiple cuisines, utilisation of kitchen equipment, planning of storage and drainage, designing decent interior for staff, right exhaust and/or chimney, etc.
Who can Operate Home Based Cloud Kitchen?
Operating in the million-dollar industry of cloud kitchens does not require any particular qualification. One needs to be presentable in the society as far as socially acceptable conduct is concerned. Any person who is above 18 years of age can operate this business. To be more accurate, any housewife, business person, student, senior citizen, and anyone living in society can practice this business. Running a home based business requires zeal and right knowledge. You can also have some other main profession or occupation along with a home based cloud kitchen.
Important licenses that are needed to begin Home based Cloud Kitchen Business in India are:
1 - FSSAI license
2 - Fire NOC for the kitchen facility from the fire department
3 - Local authority license from the state or city authorities
4 - Health license
You may also require these additional documents to begin home based delivery kitchen
1 - GST certificate
2 - Company PAN
3 - Owner’s PAN
4 - Company’s current account
What do you require to start Food Business from Home?
A team of 2 people can also begin a home based cloud kitchen. You only need to put the effort in the beginning to prepare and deliver food and growth will come about slowly. If you keep working with dedication, it will not take a long time for you to reach the break-even point and you can start thinking about business expansion by leaps and bounds. To develop zeal, one needs to recognise the true passion to serve in the industry and then take the first step. Once you are ready, kindly approach us for methodical discussion to understand its feasibility as a recognisable brand identity.
Whom to Consult?
The number of home entrepreneurs are increasing. The credit goes to the digital era we have entered into. To get the right knowledge, take the services of an experienced restaurant consultant or a service provider like DNY Hospitality. We have an experience of providing consultation to the establishment of more than 200 restaurants and home based cloud kitchens. Besides, we also offer cloud kitchen franchise of our original brands performing successfully for years. You can conveniently begin with a low investment plan and start a home based cloud kitchen with a systematic procedure for operational excellence. If you are investing your hard-earned money, make sure it goes in the right hands to bring the highest returns.
Opportunities Associated with a Home Based food business
Commercial kitchens for home based cloud kitchen setup is showing a rising trend in 2020. The industry has wonderful opportunities waiting to be explored. It is really a great idea to start your career in this industry and start reaping the fruits in the coming years. Let us look into the major opportunities in detail:
Low or Almost No Operation Cost
A home based cloud kitchen serves customers every day, therefore, the operating costs are high. The major overall costs incurred are in maintaining the working of the operations department. It includes the salary of the employees, ingredients, cleaning activities, rent, packaging material, tea-coffee expenses, etc. It is reduced to a considerable amount with limited space. See how:
1 - Lesser rent is to be paid
2 - Lesser salary for staff
3 - Lesser consumption of utilities
4 - Lesser maintenance charges
What is the Capital Investment to start Food Business from Home?
The next major factor that contributes to capital to start a business in the food industry is an investment in the interior decoration and furniture. This becomes completely zero because in a home based cloud kitchen business zero interior decoration and furniture is required. Consultant you with the necessary equipment and training. After all, a customer does not visit the place. You only need to make the arrangements for the employees.
We make classy arrangements for the employees as well because our philosophy is to take care of employees also. Therefore, the employees working at a home based cloud kitchen designed by DNY Kitchens are also brand loyal. There is no need of creating an upscale interior design for customers.
Minimum Investment required would be between INR 2 to 5 Lacs. The initial investment or capital becomes less than one-third of the total cost of a restaurant. Read the article further to understand the other advantages at the least possible cost. It will give you a great level of confidence and you will start planning for a home based cloud kitchen in black and white.
What’s Better than starting with Less, rather than waiting to start with more?
Advantages of home based cloud kitchen
The magnitude of investment depends on the area of the place in home based cloud kitchen. When you decide to invest in a home based cloud kitchen of DNY kitchens franchise, you need to take care of your real business needs along with 100% brand support. It entails taking premises on rent or investing in buying a piece of property at first because every business needs a physical place for registering presence with legal authorities.
Paying regular monthly rent is a part of operating costs however the initial deposit of 2 months. Or one month along with rent of the running month comes under capital. If you deal in a home based cloud kitchen, the rent is reduced to one-third or even less than that and so the deposit. DNY kitchens franchise helps you with on-going operations support, marketing support as well.
YOU – The Home-Based Team
Home based cloud kitchen business inspires YOU to cook yourself as a biggest passion to start with. Yes there would be manpower needed to support you. Manpower for human resources plays the most important role in a company. Most of the highly successful companies have many employees. However, in a home based cloud kitchen of the 21st century, the requirement of many staff members is not at all necessary as compared to conventional restaurants and hotels.
The major roles and responsibilities in a home cloud kitchen are cooking, proper packaging, maintaining food items, strategising to buy and store raw material for delivering fresh food items, maintaining accounts, payment of taxes, cleaning, etc. A small home based cloud kitchen can begin in the area of 100 to 150 sq. ft. In a traditional restaurant, at least 2 to 3 people are required to serve the guests, 1 chef, 2 supporting staff thats all
A home based cloud kitchen has more potential to generate profit. A restaurant earns huge profits if it is run with complete dedication. There are many restaurants in the town and most of them are working really well. The staff members there are working with a reasonable salary. If customary restaurants can bring profits, a home business can also generate profitable results. In the cloud kitchen business, many costs are saved and you can pay higher than the industry standards to the chef and other staff members. DNY Kitchens will give you training starting from brand ideation, planning the kitchen setup menu engineering, training related to culinary, SOP & management, etc.
The food industry keeps growing. It has been observed that some exceptional brands in food industry grow faster also. The most important decision the entrepreneur or the owner of a home based cloud kitchen business needs to take is related to the launch of a home based cloud kitchen. Once it is launched on the right occasion, the rest of the journey is simpler.
For example, if you want to launch a cloud kitchen dealing in desserts then launch it at the time of a festival in India like Diwali or Rakhi. The scope of a multi-brand cloud kitchen from the same home based kitchen from where you are already operating one cloud kitchen, it can illustrate rapid growth. Don’t invest a huge amount of money to start another brand from the same cloud kitchen. The operational costs will have only a little increase.
Challenges Associated with Home Based cloud Kitchen
A home based delivery kitchen offers multiple ways of earning great profits. However, all great things come with a fair price too. There are challenges associated with a home based delivery kitchen also. Let us see them in advance so that you have plan B ready to be executed before things go against your expectations.
Challenge to Build a Food Brand
With the standardized procedural management for home based cloud kitchen, you will earn a great amount of revenue. However, we give special attention to create a brand image as a respectable corporate entity dealing in the Food Industry. Making a brand in home based business is a bit challenging because there is no direct interaction with the customers and consumers. The best quality branding takes place with a real-time experience when people visit the restaurant. However, there is no possibility of doing so with a home based cloud kitchen.
No issues at all because if there are problems there are solutions too. You need to develop ways to interact with the consumers through the packaged product. The focal point of your attention needs to be on delivering the most delicious food item that your consumer cannot resist ordering multiple times. We, at DNY Hospitality provide you world-class branding services for better brand recognition including name generation, logo designing, theme designing, food package designing and menu designing.
More Dependency on Food Aggregators
Food aggregators are food delivery service providers with applications like Zomato and Swiggy. These are third party food aggregators. It means that you and your customers are linked with the help of platforms and therefore the customers have many other options. These options are your competitors. Food aggregators offer different plans and schemes. For example, food delivery applications provide promotion-related schemes to highlight different restaurants from time to time. There are commissions associated with aggregator per order, which are highly justified along with logistics. This can be a challenge for home entrepreneurs to be trending all the time.
No Customer Data and Interaction
A conventional restaurant has the advantage to take down the contact details of the customer when they visit. These details can be used later to send birthday wishes, anniversary wishes, greetings on occasions, etc. This is seemingly impossible while operating a home based cloud kitchen.
The challenge persists even when the owner of the cloud kitchen in the home setup receives orders on the phone or website. With the help of customer interaction, it is easy to understand the expectations of the customers and make changes positively. The creative way to meet the challenge is to send some cards to the customers in food packages.
Supply some benefits to them for providing genuine feedback on your Facebook or other social media handles. For example, you may provide a 40 to 50% discount on the next order if they post feedback on a social media handle of your home based cloud kitchen. This is how you can fill the gap between you and your customer to build interaction. DNY Kitchens can help you do so with its complementary branding services using digital marketing.
Future of Home Based Cloud Kitchen
Cloud kitchen industry is showing bullish trends in the coming decades. Considering the pandemic situation with which the world is dealing, it is highly recommended to invest in a home based business idea. It is projected that the cloud kitchen industry in India is expected to become a $2 billion industry by 2024 as per Redseer management company.
It is important to note that in 2019 the industry was $400 million. One needs to pay a huge price to open an outlet in an established market where customers walk in. The rates of property are sure to rise. This means inflation is going to affect the industries to a great extent. The rise in inflation creates an opportunity for the home based cloud kitchen business
Budding Women Entrepreneurs
More women at home are also getting inclined towards earning money and the credit only goes to inflation. DNY Kitchens is willing to welcome the creative women at home who can bring name and fame to the nation and their families by entering into cloud kitchen business. The remarkable skills of women opting for home based cloud kitchen business and DNY Hospitality’s creative heads will make unbeatable partnership.
Cuisines that Can Work in A food business from Home Setup
Once you have made your mind to establish a home based cloud kitchen, you might be wondering what all it would take to get success. One of your primary concerns must be cuisine or food items. Here are some suggestions from the knowledge bank of DNY kitchens.
1 - Biryani
2 - Bakery items
3 - Pizza
4 - Indian high tea snacks
5 - Bread based dishes
6 - Dry snacks
7 - Famous Indian breakfast items
8 - Fast food – Burgers, sandwiches
9 - South Indian food items
The recipes for all these cuisines are not complicated. Home entrepreneurs can easily choose any one of them and begin to live their dreams. A multi-brand cloud kitchen is also a convenient option out of the above-mentioned cuisines. Suppose you start your home kitchen business in bakery items, you can easily begin another cloud kitchen brand of biryanis because it only requires the storage of rice and some other ingredients.
Exact Investment needed to start food business from home.
You will be surprised to know that the investment needed for a food business from home is minimum Rs. 2 lacs. A full-fledged home cloud kitchen also requires the investment of a maximum of 5 lacs only. The third-party aggregators for food delivery apps do not have any norms related to the geographical location of the cloud kitchens or restaurants. If your house is located at the center of the sub-urban society or colony, you can get highest online area target reach.
Importance of Branding of Home Based Food Brands
This is the most crucial decision to be taken by the owner of the home based cloud kitchen. There is no physical visibility of the brand and therefore it is significant to place the brand in the minds of people correctly.
1 - It should start by introducing some fresh and innovative ideas.
2 - Try promoting everything related to the achievements and improvements with feedback on social media platforms.
3 - Create small stories that can highlight the consumption of the food items and how they add value.
4 - Keep posting on as many social media platforms as possible regularly.
5 - Keep bringing some freshness in the presentations of food items in the posts and through garnishing in serving food.
Step by Step Process to Start a Food business from home
This guide to step by step process to start food business from home, is going to be crucial for you when you actually take pen and paper, to begin with:
1 - The first step is choosing the cuisine to understand your niche market. In case you taking up a franchise opt for highest demanding product brands like biryani, grilled chicken - DNY offers franchise of these brands in lowest investment.
2 - The second step would be conducting market research to understand market trends, niche market preferences, marketing tactics, competition, etc.
3 - The next mandatory step is to apply for licenses and arrange permits because you will not have a legal status without documentation.
4 - The next step is to finalise kitchen equipment which is a very complicated procedure. This can be easy if you choose to take consultation services from an experienced service provider. In case of franchise, DNY kitchens would do end-to-end for you.
5 - Hire a talented chef(s), cleaning staff, and a digital marketer.
6 - Now it’s time to promote your business through digital marketing or physical marketing depending on the trends prevalent in your city or town.
7 - The next step that you could be waiting keenly for is, getting the orders, delivering the food, and making calculations of turnover and profits.
One evergreen suggestion for home based cloud kitchen is to focus on the quality to keep serving the clients with culinary training and management by DNY Kitchens. We will help you to develop recipes, give world class training to your staff, garnish the cuisines authentically, learn the ultimate art of cutting and chopping, minimise wastage, etc.