How to Start Cloud Kitchen for Beginners [The Ultimate Guide]

When there was no pandemic, a small number of people were ordering online from cloud kitchens. But, after the pandemic, ordering food online has increased, which is surprising. That's why most people are interested in creating and starting a business which is easy to run from home. For this reason, those who want to start a small business and want to know about how to start a cloud kitchens and how to make a successful food business. 

Due to rising demand for food ordering, many cloud kitchens are making more profits than before. Those who own the business of cloud kitchen restaurants can save costs and can deliver the same quality of food. Let's follow the rest of the article to learn more about Cloud Kitchen.

What is a Cloud Kitchen and How Does It Work?

Before learning about the whole thing about the cloud kitchen, do we know the meaning of cloud kitchen? A cloud kitchen is mainly known as a virtual kitchen. Sometimes, it is known as a Ghost kitchen. The Cloud Kitchen restaurant offers a wide variety of mouth-watering cuisines that can be ordered online and delivered to the customer's doorstep.

For those wanting to eat food from a cloud kitchen, ordering food online is the only option because the entire process of a cloud kitchen is completed online. In addition, there is no physical dine-in system.

The process of cloud kitchen works with taking orders from the customers. When a customer orders food from any cloud kitchen, they deliver the food to the customers or take it away sometimes. But the only difference is there are no physical dine-in facilities. 

Types of Cloud Kitchens

Many people want to start the business of cloud kitchens. Especially those who stay at home most of the time, they prefer the home based cloud kitchen.

It is not the only way to do it with a home based cloud kitchen. But also, there are some other ways to do the online cloud kitchen business.

So, for opening a cloud kitchen, we must gather some knowledge about the types of cloud kitchens. 

• Single Brand or Standalone Cloud Kitchen

This type is the most common cloud kitchen business model. This business model's Restaurants do not have any physical stores. That is why these are called standalone cloud kitchens. They usually take food orders from the customers and deliver the food. Third-party apps do this whole process.

• Virtual Restaurant

This virtual restaurant is another type of business model that is used to operate without any physical place. These restaurant brands are only offered to online food aggregators. They use the same equipment for cloud kitchen but a different brand name. More specifically, the virtual restaurant brand owners share the culinary equipment and resources.

• Multi-Brand Cloud Kitchens

Multi-brand cloud kitchens mean a large structure of a kitchen. It allows the various brands to work together in the same firm using the same resources and equipment in a kitchen.

These multi-brand cloud kitchen concepts allow businesses to serve more customers. As a result, this business became more profitable and saved costs just by using this concept. 

• Fully Outsourced Cloud Kitchen Model

Among the many types of cloud kitchen models, Outsourcing cloud kitchen model kitchen is one the most unique ones. With this model, the foods are shipped to the kitchen using an outsourcing method.

It is very simple. All you have to do to remove the particles from the package of the product that you have outsourced. After outsourcing the food product, give the last touch of processing the food to the chef. After finishing the process, deliver it to the customer. 

It is an excellent way to do the cloud kitchen business with less hassle and can save time and money. 

Steps of Starting a Cloud Kitchen Business 

For opening a cloud kitchen business with a great start, you must go through some steps. Also, some requirements which must be met first. So let’s have a look down the important steps first which you should follow. 

(i) Know your specific customers

Before starting the cloud kitchen business, the first thing you should know is which cloud kitchen target customers you want to serve. 

If you look at a family as an example, we will see that each of the family members may have different food preferences they want to eat. So, I must know their preferences to meet their needs. Then, I can serve the food that they prefer most. 

So, You must have ideas about which food the customers prefer most before menu offerings, food concepts, and implementing marketing techniques.

(ii) Recognize your competitors

When you are going to start a cloud kitchen, you must know your competitors first. Also, you must gather knowledge about the present market's competition. You have to be up to date about which dishes your competitors serve to the customers, how they are implementing their marketing strategies, and which dishes are not available to them.

After analyzing everything, you can compete online with competitors using unique marketing and selling tactics.

(iii) Make the business cost-effective

To start any business, you must have proper knowledge about business costs. With a poor budget plan, the business will only last for a while. If this budget is for the cloud kitchen business, it only requires a little cost. But still, you must make a cost-effective plan for the cloud kitchen business.

There are Some points you must maintain to make it cost-effective for the cloud kitchen business. 

• Startup with a low cost.
• Make the lower business expenses.
• Make the labor costs lower. 
• Avoid unnecessary equipment buying.
• Perfect marketing plan for lower cost. 

(iv) Location and Property

Restaurants usually require a perfect placement in a specific location. So that they can grab the customers, make food deliveries, and highlight their restaurants. Sometimes, they need to buy a property to expand their restaurant business broader. 

However, a cloud kitchen does not require any specific location. You can do this business wherever you want to do it. You can do it in any place, like your home's backyard, any unused parking, market backyards, etc. 

You can go for a shared kitchen with someone so that you can do business with less cost with high profits. 

(v) Get a License

Every business needs a license. No matter what kind of legal business you are doing. Also, cloud kitchen businesses need licenses. Although each country has different rules to make the license. But in America, there are several permits and licenses required. Those are: 

• Business license.
• Food service establishment permit.
• Food handler's permit.
• Fire department permit.
• Zoning permit.
• Alcohol license (if applicable).
• Environmental permits.
• Sign permit.
• Health department permit.
• Transportation permit (if delivering).
• Business operation permit.
• State sales tax permit.

(vi) Necessary types of Equipment and Packaging

Equipment is essential for the cloud kitchen. Sometimes kitchen equipment mainly varies on what kind of cuisine you want to make with that. So You need to buy some proper equipment for making food. There are many common appliances needed all the time, like knives, stoves, refrigerators, etc. 

Packaging is one of the most important things you must be careful with. If you make the best cuisine, but not packaged properly. In that case, it may have a wrong impression on your business. No matter how the big cloud kitchen business you have. 

(vii) Hiring Expert Chefs and Staff 

Cloud kitchens do not require many staff to hire. Only two to three professional staff are enough to start the cloud kitchen business. They can make ready and deliver the food to the customers. These things make it easier for your business without investing extra money. 

Besides, it would be beneficial if the same chef could help you to make the food for your various brands. Then, when your business gets more extensive, you can hire more staff.

(viii) Delivery

After hiring a professional staff and chef to prepare the food, it is time to deliver it to the customers. There you will need a good delivery man who is punctual and honest. A punctual delivery man can deliver the food to the customers on time.

You can deliver the food to the customers by yourself. Or you can use a food delivery app, which will make the delivery system more smoothly.

You know that if a customer gets food on time, that will make a good impression on your brand. For this, it is a great chance to grow your business by this. 

(ix) Marketing for generating orders

Marketing is the most essential pillar of any business. Although the entire process of cloud kitchen is online based. So, online marketing for cloud kitchen business is more important than physical marketing. Because more people are available online compared to real life. However, online users are increasing day by day. So, marketing with a good strategy will make your business more profitable. 

You will see that people prefer ordering food online instead of going to restaurants. Also, people search online for "good food cloud kitchen and restaurant". So if you do good marketing, you can generate more food orders.

Cloud Kitchen Requirements

There are many people who want to start the cloud kitchen business. But most of the people don’t know the exact requirements. As a result, they had to go through many problems. 

There are some important requirements which are listed down below: 

• Proper knowledge of knowing your cloud kitchen target customers.
• Know your competitors.
• Good knowledge of costings.
• Use a suitable POS system.
• Suitable location with driver parking area.
• Get a license.
• Buy equipment for a successful cloud kitchen business.
• Hire an expert chef to make your food and maintain good quality.
• Hire the proactive staff. 
• Perfect packaging.
• Hire a professional driver who can deliver the food on time.
• Unique marketing strategies to promote your business.

Advantages and Disadvantages of Cloud Kitchen

Before starting the cloud kitchen business, we will see many advantages to doing this business. Also, there are some disadvantages. 

Let's check the advantages and disadvantages that you must know.

Advantages

1. Lower Costs

You don't need to invest in real estate for the perfect location. You can make your kitchen anywhere. For example, Your home's backyard, unused basement, unused parking slot, etc. Also, only hire up to 2 or 3 staff. So this is the way you can invest at a lower cost and save more money.

2. Flexibility

There is considerable flexibility in cloud kitchens compared to physical restaurants. You can change the menu at any time based on customer demand. Also, you can change operating hours and locations without hassle.

3. Great Efficiency

Cloud kitchens run with more efficiency than any other physical dine-in restaurant. In addition, there is no need to think about customer management physically. All you need to worry about in a cloud kitchen is maintaining the quality of food taste and fast delivery.

4. Competitive Food Prices

You have a chance to use the ingredients from the cloud kitchen resources easily. In addition, restaurant management can change the menu ingredients of food, update the prices that are competitive, and can run the business nicely.

5. Multibrands Under a Single Roof

Cloud Kitchen has the great facility to operate the multi-brands in the same kitchen, but the physical dine-in restaurants don't have any. If you build multiple brands of cloud kitchen, you can easily control it under a single. That's a fantastic advantage.

Disadvantages

1. Last Mile Delivery

You have to pay extra fees for using delivery services. It is risky to deliver the food to the customer through a third-party delivery service. If they spoil the food packaging or quality, then you may get bad reviews from the customers. To prevent this problem, You have to make your own delivery system.

2. Delivery with Small Radius

You can't deliver the food to the customers who stay in distant places from your kitchen. So it takes a lot of work to deliver the fresh food to the customers. 

3. Lack of Customer Interaction

Sometimes, interactions with the customers are essential so that when you serve the food to the customers. When you see the live interaction with customers and staff, you can understand whether the customer is happy. In a cloud kitchen, you will get no chance to see customer interaction.

4. Higher Competition

You know that the restaurant business is increasing day by day. Also, the cloud kitchen business is increasing. You can start many exciting offers from your cloud kitchen to your customers. Also, the new cloud business is increasing. And they will come with many offers that make more competition and hard to last the cloud kitchen business online.  

FAQ

Can I Start a Cloud Kitchen from Home?

Of Course, you can! You can start a cloud kitchen from home. Also, in your house's backyard, unused parking lot, unused basement, etc. You can do an excellent cloud kitchen business and call it a home based cloud kitchen.

How to Make a Profitable Cloud Kitchen?

You can make more profit from the cloud kitchen business if you provide the best quality of food and deliver it in a short time. You must have a unique marketing strategy to implement online, increase your orders, and make huge profits.

How do I Choose the Right Location for My Cloud Kitchen?

You must consider key factors such as Infrastructure, accessibility, rent and operating costs, competition, local regulations, and customer demography. Considering these factors, you can choose the right location for your cloud kitchen.

Conclusion

Well, That's all about cloud kitchens. Before wanting to own a cloud kitchen restaurant, you have to know the meaning of cloud kitchen first. Then, you must have ideas about the types of cloud kitchen business because you have to decide which type of cloud kitchen business you want to start. Then, you have to follow the steps of how to start a cloud kitchen. 

You must remember that many marketing strategies are applied to cloud kitchens. So you must keep updated with marketing trends. After knowing all the processes of "how to start cloud kitchens", you can be a successful business owner.