A cloud kitchen is essentially a restaurant kitchen that only accepts incoming orders via online ordering systems, and provides no dining facilities. They have a base kitchen that delivers food to customers ‘doorstep.
Cloud kitchens may have their online ordering website and online ordering app or accept orders through various food delivery platforms. Since the primary source of revenue for these internet restaurants is through various food ordering platforms such as Swiggy, FoodPanda, Zomato, etc., it is important to have a check-in system that keeps track of the deliveries and the volume the company generates from different platforms. This will save you the trouble of adding and measuring orders from various ordering systems at the end of each day.
Here in this blog, we’ll learn the basic points to keep in mind when setting up a Cloud Kitchen company. Without addressing these mentioned requirements, one can face difficulties in sustaining the company.
Location & Property
Place and property are the main differentiators between a conventional restaurant and a cloud kitchen. A cloud kitchen doesn’t need a high footfall and prime property position. Rather, it can easily be set up in a 250-300 Sq Ft room, as there is no House Front. This greatly reduces the expense of opening a cloud kitchen.
The cloud kitchen can be in a fairly inaccessible area, but with high customer demand, particularly for a specific kitchen. Residential areas, market backsides, unused parking lots make a perfect cloud kitchen spot. Instead, you can also go for a shared kitchen room, as this helps reduce initial investment.
For many reasons, obtaining proper licenses and certification is important to open a cloud kitchen. Second, getting the licenses in order will save you from legal difficulties. Second, because consumers can not visit the outlet themselves to test for sanitation, food safety and preparation, proper licensing gives them a sense of satisfaction. You can promote these on your website and in your marketing campaigns to convince your customers that you prepare high-quality food.
FSSAI: Food Safety and Standards Authority of India. FSSAI Licenses are mandatory for food-related business in India and must be obtained on behalf of the company and its owner. The license period can range from 1 year to 5 years and must be renewed before expiry. It’s also nice to mention FSSAI on the packaging and invoice to build confidence in our customers about our offers.
GST: GST registration is mandatory for any business in India and also it is recommended to file all the company related taxes timely. GST must be submitted weekly, quarterly and annually. GST also helps to procure licensed vendors, as it reduces the tax amount if all parties have a GST number. Upon obtaining a bank account, we will apply for a GST number.
Trade License: Every business will require to possess a trade license, and so does the cloud kitchen. This can be obtained from the local municipal office by furnishing all necessary documents. Apart from the cost, we might need some extra money to get the job finished. It is a one-time job and its kind of mandatory legal action.
Fire and Safety License: Now it’s not mandatory to start with, but it is great to save yourself from future troubles. This is part of law, and fire and human health agreements are compulsory for any workplace.
The main licenses to start a cloud kitchen company are FSSAI, Shop & Establishment, GST Registration, Fire Department NOC, etc. Make sure you have these before starting a food delivery company.
Trademark registration is also very relevant for the cloud kitchen company because the idea of this company doesn’t allow the customer to step in, so the brand name of the business is the customer’s HERO. To protect the brand, the business owner must file trademark applications for the logo, name, wordmark consisting of different colors, patterns to create their unique identity on the market.
Kitchen Equipment & Packaging
The kitchen equipment depends on the type of cuisine you serve. The basic equipment required to start a cloud kitchen is – stove and oven, refrigerator, knives, etc. Here is a full list of kitchen equipment to operate a food delivery company.
The packaging is a vital part of running a food company. No matter how good the food is, it will end up destroying the whole consumer experience and giving the company a bad name. Packaging also depends on the food type. You’d need plastic containers, bottles, spoons, etc. to ensure proper food packaging.
Because there’s no House Front, you don’t need many people in your cloud kitchen. Only 2-3 people concentrated on preparing and distributing food, you can easily open a shop. When you have several kitchen brands, the same chef will prepare food for various brands. Starting with a small team is best, and you can recruit more staff as incoming order volumes increase.
Since there would be employees, to stay compliant, the business owner will take care of all relevant rules and laws. Professional tax registration, TDS, PF, Payroll and wage measurement becomes an essential and critical part of the business.
Salary Accounts, PF, etc: Unfortunately, this is the last thing most cloud kitchen owners do as the blue-collar employees aren’t too concerned about paying taxes and getting Provident Fund. When you’re in serious business with a long-term target, it’s important to start the cycle from day 1. It actually helps the team in the long run, building trust and friendly relationships with everyone.
Generating Online Orders And Marketing
Once you’ve set up the kitchen and staff, generate online orders for your cloud kitchen company.
Since a cloud kitchen doesn’t have a dine-in facility and relies solely on online and telephone food orders, spending on promoting the food delivery brand is important, at least in the initial days. Without a shop with no display boards and signage, online marketing is important in this situation.
- Listing Your Cloud Kitchen On Online Food Aggregators
- Promoting Your Cloud Kitchen On Online Aggregators
- Social Media Marketing
- Search Engine Optimization
- Loyalty Programs And SMS & Email
While cloud kitchens involve low risk and high benefit, one should be alert to the competition ahead to make profits. A cloud kitchen will definitely be the next theme. If you plan to grow your company or start a food channel, the cloud kitchen is the safer and wiser alternative considering that you keep it compliant.