Cloud Kitchen Business Model

Cloud Kitchen Business Guide For New Normal

16 Nov 2020

In order to manage reduced margins and high rentals, cloud kitchen business is perhaps the best thing to do at this point in time. Cloud kitchen, also known as a digital restaurant, is one of the latest trends of the lockdown. Cloud kitchen business model is a really smart way of business in the current times, keeping in mind the high rentals, need for space, and rising prices. This article provides the basic guide to open a cloud kitchen so that one may also go ahead and plan their finances and think about a business loan if required.

Cloud kitchen: What is it?

Cloud kitchen or a digital restaurant is a kitchen which accepts orders through online systems and does not provide any kind of dine-in facilities. Cloud kitchen business is also called ghost kitchen or the satellite kitchen.

The following are some of the features of how ordering works in a cloud kitchen business:

  • A virtual restaurant may have its own online app or website to accept the orders.
  • It may also accept orders via several food delivery platforms.
  • There is likely a software that has the technology to accept online orders from numerous sources.

 How to Start a Cloud Kitchen Business Model?

There are various important factors such as location, license, and online technology that need to be thought about while opening a cloud kitchen business.

1. Location Of The Restaurant

It is important to look for a location that would naturally require a lower cost of rent in comparison to what a dine-in restaurant would require. In a cloud kitchen business model, location of the restaurant does not particularly require a parking space or a beautiful lane. However, water and electricity supply, customer demography, low rentals and sanitization are important factors that come into play.

2. Online Ordering System 

Technology is vital in case of cloud kitchens. There are multiple food ordering platforms online such as Zomato, Swiggy, and Foodpanda. There is an amount of revenue that these platforms would charge, apart from the additional integration fees and so on. Building a website that is well optimised can be very useful for cloud kitchen businesses.

3. License For A Cloud Kitchen

There are certain licenses that would be required to open a cloud kitchen. An FSSAI (Food Safety and Standards Authority of India) license, municipal health trade license, GST license and fire license are some of them. Hiring an agency would be the best way to deal with the application procedures for the required licenses.

4. Equipment For A Cloud Kitchen Business

The overall cost of equipment, packaging and raw materials for a virtual restaurant would depend on the kind of cuisine that would be sold. It is advised to spend money on electronic devices that are new but tables and shelves that are old in order to be able to save money wisely. It is also necessary to select the right trusted vendors for the raw materials. Packaging plays an important role in a cloud kitchen business model as it is the only kind of contact that a customer would have with the restaurant from the outside.

5. Staff At The Restaurant

The team of any cloud kitchen would be small. Therefore, it is important to have hardworking, diligent and sincere members on board. The employees that are generally part of this small team are chefs, helpers, and housekeepers. The number of employees would depend on the amount of orders that the restaurant receives online.

6. Marketing in a Cloud Kitchen Business Model

Advertising is an extremely important task when it comes to virtual restaurants. Since there is no direct human contact between the restaurant and the customers, it is necessary for a cloud kitchen to have itself registered in platforms such as Zomato, Burrp, etc. in order to receive reviews online and appear more frequently in restaurant lists.

7. Devices and Services Required for a Cloud Kitchen Business

There is a varied number of technological devices and services that are required for a cloud kitchen business to evolve. It would typically need a fast internet connection, mobile phones or tablets, a small booking counter, a few chairs and a small table. These are some of the very basic things that could be essential in running a cloud kitchen.

Keeping in mind the various requirements and necessities that are part of the cloud kitchen business, it is equally important to think through the financial security beforehand. A business loan can be helpful in multiple ways in a cloud kitchen business.

The MSME Business Loan, available on Finserv MARKETS, is a business loan that comes with need based offerings, no collateral, and fast online procedures. It also offers a host of other benefits such as quick online processing, high loan limit, and value added services. There are several types of companies that are eligible for this loan ranging from partnership firms to limited companies. The tenure ranges between 12 to 60 months, offering flexibility to the borrower.

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