As the craze around scrumptious and fancy food continues to rise, the options of establishments offering beyond home-cooked and restaurant food are also increasing. Open a food aggregator app and you will find hundreds and thousands of restaurants, café, and whatnot, offering a wide range of food items. People have more choices and restaurant entrepreneurs are quick to take advantage of the increasing demand for tasty, restaurant food that delivers satisfaction in every bite.
The online food business is growing big with nearly a growth rejection of 2.9 million users by 2026. It is a perfect time for entrepreneurs, small business owners, and food industry enthusiasts to invest in the opportunity and join the online business brigade. The foundation of this separate entity in the food industry is already been laid as we can easily see the outer shape of a sector completely dedicated to online food delivery business. What completes the picture of this sector is a cloud kitchen that fulfills every demand that a customer has from the online delivery system.
A food entrepreneur, a food truck owner, or someone interested in making the best out of the opportunity ahead, this blog explains everything there is to learn about cloud kitchens and how to start one in India.
What is a cloud kitchen?
Also known as Ghost Kitchen, Cloud Kitchen is named so because they do not have any physical presence to the customers. There is no setup in a cloud kitchen and they are nowhere close to your favorite restaurant when it comes to location, space, ambiance, and more.
To open a cloud kitchen, you only need an appropriate space and some kitchen equipment, and of course the working capital.
In India, the concept of cloud kitchens is on the rise. The cloud kitchen industry is completely based on the online food delivery system. There is no physical presence for the customer and the food is ordered online and delivered by a delivery boy, either someone from the cloud kitchen staff or a food aggregator service.
There are several reasons why you must invest in a cloud kitchen. Its advantages range from minimal investment setup to lower real estate costs, better expansion opportunities to low overheads, and much more.
If you are interested in opening a cloud kitchen in India, below is a complete guide on how to go about it.
How to start a cloud kitchen in India?
If you take the right approach towards establishing your cloud kitchen setup in India, you can soon start earning great profits from the project. Learning a thing or two from the already successful cloud kitchen setups in India can help you better go about your idea. All you need is an effective business model, the right budget, and quality resources to make your cloud kitchen up and running. As soon as you know what is the best cloud kitchen model for you, here is how to proceed with the rest.
Finding a Rental Space
One attractive feature of cloud kitchens is that they require a minimum budget for setup. This comes from the fact that they require only a small rental space to run the operations, however, this does not make the task any less complicated as you have to consider several aspects when searching for the ideal space for a cloud kitchen. Sanitation, water supply. Maintenance and accessibility are some factors to keep in, mind, however, what most affects your choice of rental space is the demand for your food in the area. it is best to choose a location where you find your target demographic at arm’s length.
Licenses and Trademark registration
As a cloud kitchen owner, you will; need to fulfil some licensing and trademark-related legal obligations to ensure you are a legally binding business. If anything goes south in terms of food quality or sanitation and a customer reports it, a license is what saves you from impending legal trouble. Moreover, a licensed and trademarked business gains more popularity and the trust of customers. Some of the licenses that you must procure for a cloud kitchen in India include:
- GST registration
- Trade license
- Fire and safety license
- FSSAI (Food Safety and Standards Authority of India) license
- Trademark registration
Unlike traditional restaurants, cloud kitchens in India require fewer licenses to run a legally approved business.
Picking the menu, you would serve
The cloud kitchen sector in India is more competitive than the traditional restaurant industry, what makes one cloud kitchen different from other is the menu you serve along with the quality of food. You must choose a core cuisine that you would focus on and can add others later as you establish yourself and think of expanding. What you must be cooking in your kitchen should be a decision made after proper analytics, and resource analysis focused on ease of procuring raw materials, staff management, and more.
Procure kitchen space, equipment, and raw resources
Now that you have decided what type of cuisine you are going to order, you know the equipment you will need. Procuring second-hand equipment as well as electronic cooking equipment is a great way to minimize your costs of operations. As a standalone cloud kitchen, you will need to invest in all types of equipment whereas if you are working on a shared space chimneys, burners and other resources can be shared.
You must be very focused on how you pack your food orders. As you do not have any other way to impress your customers, it is the packaging of your food that talks for you and helps you build a trusting relationship with the client. Always abide by the packaging material laws of the land and best stick to eco-friendly packing material. You must also add your brand and logo to the packaging material to give it a more personalized look.
Finally, make sure you procure the raw material from a trusted vendor who is committed to offering the finest quality. It is the quality of the raw materials which decides the taste of the cooked food and hence you must be very picky in choosing your vendors for raw materials.
Have a well-thought online order management system
As the cloud kitchen business is completely based on online orders, having an efficient online order management system is crucial. The orders primarily come through food delivery aggregators like Swiggy or Zomato and several factors make the delivery system strong. These factors include efficient tracking and preparation of food while following a timeline.
As a modern cloud kitchen setup, you cannot run on manual processes and need an advanced online order management system that makes processes smooth and more efficient. There are several choices available in the market the majority of successful cloud kitchen start-ups in India use Slant POS software. It is the best POS solution with features such as:
- fast billing
- inventory management
- sales management
- customer management
- promotions and more
Slant is currently developing more features to strengthen its online management system and offer cloud kitchens a better and more efficient way to run their business operations.
Hiring the staff
You have decided to invest in an online order management POS system and now it is time to find the right people to handle different responsibilities in your cloud kitchen. You will need chefs, housekeeping and kitchen helper, staff responsible for the billing, and one to run the orders. As you grow, you can scale up your staff and ensure that you have the right resources to take up the job.
How much does it cost to open a cloud kitchen in India?
Several factors affect the cost of operating a cloud kitchen in India. From the choice of city to the menu you serve, and the demographics, various factors affect the calculation. On a rough estimate, here is how much you cost you will have to bear:
- Rent: The ideal space for any cloud kitchen is 600-800 sq. feet which may come with a rent tag of anywhere around ₹25,000-50,000
- Licenses: The cost of basic licenses is around ₹15,000-20,000
- Staff: the cost of staff on annual basis can be anywhere around ₹50,000-85,000
- Kitchen and equipment: This varies as per the food you are offering and can be anywhere near 5-6 lakh INR.
- Online ordering system: There are several options and the best ones are available within the range of ₹4,000/year to around ₹6000
- Customer acquisition and social media presence: if you invest in paid and organic marketing, the cost would be around ₹40,000-80,000 per month
- Branding and packaging: because the packaging is important the entire branding and packaging project would cost you ₹50,000-70,000.
Starting a cloud kitchen in India is one lucrative project you must consider if you want to make it big in the food industry, the cloud kitchen concept is in its growth phase and promises great returns in the future. As the online food delivery system strengthens in India, there is much more to explore in the cloud kitchen sector. We hope this article offers you detailed knowledge about cloud kitchens and how to open one in India.