CLOUD KITCHEN BUSINESS MODEL , AN EASY STARTUP IN 2023

 

As per the data published by the government the number of startups in India has increased exponentially. The number rose from just 452 in 2016 to 84012 in 2022

.
As per another such data the revenue of the online food delivery market is projected to reach around US$ 36.66 bn in 2023.

The above two statements make it clear that one of the most lucrative markets to enter is the food business. This article further suggests one of the cheapest ways to enter the food industry - cloud kitchen business model.

What is a cloud kitchen?

A cloud kitchen is the same as a restaurant kitchen where you can order online or take out your food with no facility to dine in there. This cloud kitchen business model is now becoming very prevalent nowadays. This is due to the technology driven where the customers want everything at the tips of their fingers.

Why is the cloud kitchen business model profitable?

Today the customers want to enjoy different cuisines and it is an icing on the cake if it gets delivered to their door steps. Moreover a cloud kitchen business is at its core profitable due to low requirements of capital and resources.
Furthermore the overheads are also extremely low as compared to a full fledged restaurant. A proper restaurant requires resources for the physical qualities of the restaurant such as ambience and looks.

How do cloud kitchen businesses earn money?

The ways how the cloud kitchen business make money could be:

• Delivery plus food price

First is the delivery fees along with recovering the cost incurred in the preparation of the food. This includes the profit margin as well.

• Installing a kiosk

You can also install a kiosk at any location for the foods suitable for such delivery. This can ensure more can inflow with little to now cooking required whatsoever.

• The subscription based revenue model

Second and most lucrative of all is the subscription based revenue model where the kitchen could give certain customers subscriptions. Here the orders can be customized as per the needs of the customers.
Then there could be some complimentary services which can be availed by customers after paying some amount along with the orders for some extra utilities such as drinks, condiments and desserts as recommended by the chefs.

• Catering

The business could also start home catering to small events for their premium plus customers.

Process of starting a cloud kitchen business

The chronological order of starting cloud kitchen business :

1. Finalize the location where you want to establish your kitchen. This has to be the most important step for establishing such a business. The location should be apt for the smooth running of the business. It should be easily accessible for the drive-in customers( if any) as well as the delivery persons.
2. Getting all the licenses and registration required and deeds finalized.
3. Establishing the point of sale for your business. This is integral that the point of sale is extremely inviting for the customers . More on this later .
4. Getting all the fixed assets such as deep freezers, ovens, storing shelves, furniture and related items
5. Making contact with the suppliers for your business. A business can only flourish when the suppliers are in sync with the requirements of the business. They must be willing to go that extra mile for the business. Make sure the supplies are fresh as it is going to reflect in your food.
6. Take ample amount of time for finalizing the staff of the kitchen for they will be the heart and soul of the business. Well trained chefs and apprentices would be required. Also employ some professional in house delivery personnel as they would be the delegates of your business, the point of contact to the customers.

The average cost of starting a cloud kitchen business

A cloud kitchen business is a very low cost and less resource requiring business. The major costs for cloud kitchen business are the cost of the cooking equipment. A deep freezer, some large as well as small burners, storing shelves, normal kitchen utensils is all you need for kick-starting the business.
The estimate of starting a cloud kitchen business is as follows *

S. No	PARTICULARS	AMOUNT
1	Deep Freezer	30,000
2	Stoves/Burners	5,000
3	Storing Shelves	5,000
4	Miscellaneous  Kitchen Utilities	10,000
5	Staff Salaries	10,000
6	Rent of the Premises	10,000
	TOTAL	70,000

 

 

Most of the kitchen equipment is also eligible for depreciation thus helping you save a lot of tax for the years to come.
*Bear in mind that this cost is for a person looking to start a full fledged business. However you can start the cloud kitchen business even with little to no investment by using resources available to you.

The secret sauces( pun totally intended)

• POINT OF SALE (POS)

The extremely important part of a cloud kitchen business will be the point of sale where the customers would be putting their orders. It could be an application or a website or a tie-in where you can sell your food on existing platforms such as Zomato,Swiggy, Ubereats or Foodpanda. The in-house POS needs to be user friendly for the customers to interact with, so that the customers can place orders easily. If you are selling on an already established platform, make sure that your product stands out so the customers are tempted to not scroll you down. Here you could use mouth watering adjectives to describe your food. Also give certain add-ons for free to entice and retain your customers.

• PACKAGING

The other secret sauce of success of this type of business is special attention when it comes to packaging of the foods. The first impression that your business makes is the condition of your food at the time of the delivery. Packaging is the one area where you can not falter at any point of your business. Any negligence to packaging would lose the customer forever.

Always use appropriate containers for different types of foods.

Cloud kitchen business is the future

Finally it does not matter if you are a big restaurateur with loads of money to deploy or just a housewife with just some small capital, the future of the food industry is the Cloud kitchen business. The advancement of the technology and social media boom has the cloud kitchen business model that can not be ignored anymore.