Covid-19 pandemic has been one of the deadliest pandemics that has severely hit the world economy after the Spanish Flu. Thousands have lost their jobs and the lives of their loved ones. This pandemic has brought the whole world to a standstill, and people are in dire need of exploring new job opportunities to earn a livelihood. During this phase, many businesses have hit the rock bottom but there has been one specific niche that has flourished like no other, the cloud kitchen business model.
Just like online shopping players witnessed a huge surge in sales, the food business with cloud kitchen models experienced phenomenal growth because of lockdowns and stay-at-home policies. Majority of the restaurants were forced to shut down. However, some switched to the cloud operations to keep their business running during the tough times. While many people started to cook themselves, some still relied on restaurants and eateries that began contactless home deliveries.
What is a Cloud Kitchen?
A cloud kitchen is a restaurant kitchen that only accepts orders via online ordering systems and provides no banqueting facilities. All they have is a base operational kitchen from where the food is delivered to customers ‘doorstep.
The cloud kitchens may have their online ordering website and online ordering app or accept orders by partnering with various food delivery mediums. Since the primary source of income for these internet-based restaurants is through different food ordering platforms, they need to have a check-in system that will keep track of the deliveries and the company’s volume generated from other platforms. The cloud kitchen owners can develop a strategy on their own or can use existing tracking systems. The said method will save them about adding and measuring orders from numerous ordering systems at the end of each day and revenue reconciliation.
Here’s what you would need to set up a cloud kitchen:
Location & Property
The first and foremost requirement is the location and property. But the good news is that you do not need a high footfall and chief property location. You can set up the cloud kitchen in an equitably inaccessible area but with increased customer demand. Residential areas, market backsides, and vacant parking lots make a perfect cloud kitchen spot. Also, you can go for a shared kitchen room, as this helps reduce the initial investment.
Laws, Rules, & Guidelines
If you plan to set up the cloud kitchen business, you must keep in mind several business laws and rules of the country you are residing in. The food security laws, taxes, trade licenses, fire, and safety rules are fundamental, and you must abide by these regulations to ensure a seamless business experience.
Kitchen Equipment & Packaging
Kitchen equipment and packaging varies from business to business depending upon the cuisine and dishes. You can get the commonly available packaging material or get it customized from a local packaging company.
Once the kitchen is set up, the next important task is to hire chefs and workers who will understand your vision and contribute to the growth of your business. Currently, the most important aspect of any business is safety and
hygiene. So, you should make sure that your staff follows all the precautionary measures while working.
Mobile App or Website
Having a mobile application or website is essential for any online food delivery business to work. Since cloud kitchens do not offer dine-options, there has to be a platform from where the customers place orders. Registering on existing food marketplaces such as Zomato, Swiggy, and UberEats can be a good idea. However, if you have a greater vision, then you can create a complete food application for your business. With the increasing trend of online order placement, you can enable grocery delivery through your application as well.
Why is cloud kitchen the best business idea in 2021?
The changing lifestyles and demographics of the world focus on high disposable incomes and busy schedules, which elevates the demand for cloud kitchens. People are so busy that they don’t find adequate time to prepare their food and don’t have any option left other than ordering food. Cloud kitchen is preferred for fresh, home-cooked food at a lower cost.
Cloud kitchens are more economically profitable than the traditional dine-outs as they can save on real estate costs like interior design and outer decorations. They also need not provide comfortable seating arrangements to attract customers. A single person can manage the entire business when efficient staff are available.
Technology has elevated the demand for setting up cloud kitchens, and the recent pandemic in 2020 has accelerated this shift in choices for the world population. Though the concept of cloud kitchens is still at the very embryonic stage, the scenario changes every day. This does pave the way for the budding popularity of cloud kitchens as a business model, shifting away from retail-driven brands.
Managing Deliveries Is Crucial
The next focus can be on the food delivery time and maintaining consistent quality. If your cloud kitchen provides efficient services, your customer base will increase. Though cloud kitchen is an excellent business idea, you need to overcome the challenges of problematic delivery locations, peak hours, late-night deliveries, weather challenges, or festive rush. The food orders have to be delivered on time for the unsurpassed customer experience.
Cloud kitchen can prove to be the best business idea in 2021, but it depends upon your business strategy too. If you have a strong delivery management network along with lip-smacking food options, nothing can stop you from being the talk of the town.
Get in touch with our experts to learn how to launch your online platform for cloud kitchen business!