written by | March 16, 2022

Ultimate Guide to Opening a Cloud Kitchen Business in India

A cloud kitchen is also known as a ghost kitchen or virtual kitchen. The concept is that of accepting online cuisine orders. The development in the world is leading towards connecting people more conveniently and easily. A cloud kitchen is also popularly referred to as a ghost kitchen or even a satellite kitchen. It offers numerous opportunities to different food businesses, facilities as well as various services in the preparation of meals. The core objective is to execute all online orders placed for food and manage the delivery as well. As the name suggests, there is no physical dining facility. These types of kitchens have their own website on which people can place orders for their choice of foods. They also have an online ordering application that people can download and use for the same purpose.

Most individuals use platforms like Zomato or even Swiggy. These orders are placed from different geographical regions and you need one single Point of Sales software. This is where cloud kitchen comes into focus. Most households and commercial spaces have got habituated to ordering food online. This has increased the presence of cloud kitchens in India. In 2019, there were around 5000 cloud kitchens in India, and post the covid phase, the cloud kitchen mushroomed to a large extent. Cloud kitchens got major support with collaboration with online food ordering apps and websites. There are several steps to start and set up a cloud kitchen.

Did you know?

There are more than 3500 cloud kitchens in India and by the year 2024, this business is expected to become a $2 billion industry in India. The top 5 cloud kitchens in India are Biryani by kilo, Rebel Foods, Soba-Asian Kitchen, Masalabox Food Network Pvt. Ltd., ad MOJO Pizza.

Also Read: How To Become A Chef In India

The Various Types of Cloud Kitchens in India

Given below are the details of the different types of cloud kitchens in India:

  • Standalone cloud kitchens: These are small-scale cloud kitchens, which involve limited menu items and have a small team of 4 to 5 people. The average area required for a standalone cloud kitchen is about 300 square feet.
  • Virtual restaurants: The virtual restaurant operates within a restaurant, i.e., the restaurants that are listed on the online food apps or website. They utilise the kitchen restaurants as virtual kitchens to facilitate the delivery of food to the customers.
  • Multi-brand cloud kitchens:  Are based on a very close analysis of the food consumption habits of people in a specific locality
  • Hybrid cloud kitchen: This model includes a takeout restaurant as well as a cloud kitchen.

Process of Establishing a Cloud Kitchen in India

As is the case with every business, you need to understand the investments, the location, licences, and various other factors to understand how to open a cloud kitchen in India.

Location

In the case of a cloud kitchen, location implies good sanitation facilities, a constant supply of water and premises with a nominal rent. The location should be one where you can expect a large demand for the type of food you would be offering. For this, initial market research and analysis of the location are very important. You should understand the demographics of the location as this will give you an understanding of the age groups, their food-consuming habits and their various preferences. A location that gives you ample visibility will serve to draw crowds easily. With finances permitting, you can select a place with a parking facility to draw clientele who are mobile. A frontal location i.e. street-facing will make your cloud kitchen not only very visible but easily accessible as well. You can safely start a cloud kitchen with an area of at least 350 square feet or a comfortable 500 square feet.

Licences

It is impossible to set up any commercial business without a licence. The same applies to a cloud kitchen business as well. There are a couple of licences required in the first month of setting up a cloud kitchen.

These include:

Kitchen equipment

One of the most basic requirements of every cloud kitchen is the types of equipment of the kitchen, and this equipment totally depends upon the cuisine or the concept of your cloud kitchen. These are the only products that sum up the major cost investment. The various requirements are stove, oven, microwave, deep freezers if required, refrigerators, Knives, etc.

Packaging 

Packaging is one of the greatest points of concern in setting up a cloud. No matter how delicious or well-cooked the food is, unless it is handled well or packaged well, it will not do good in the market. Proper packaging must be the main concern in setting up a cloud kitchen.

Online Connectivity

You will require a good telephone board line, seamless internet, and mobile phones. You will have to be digitally active as the entire concept runs on the premise of a virtual platform.

Marketing

A registration with food websites like Burrp, Zomato, and Swiggy is a must as they have lakhs of customers who place their orders with them. You can also place advertisements on social media handles like Facebook, Twitter, Instagram, and others by uploading details of your location, menu, images of the cuisine and more.

Staff

The selection of the staff member for the kitchen is one of the most important aspects in the setting up of a cloud kitchen. While the number of employees required are a few, you have to ensure that they are well trained, efficient, and have the requisite skills to execute the smooth functioning of your cloud kitchen on a consistent basis.

Also Read: How Digitized Menu Benefits Your Restaurant Business

The Advantages of a Cloud Kitchen in India

The Cloud Kitchen business is increasing at a great pace due to various reasons. These include:

  • Affordable Start-Up: The kitchen provides an affordable setup cost. It does not require any heavy expenses in setting up the place. As long as the location is good, you may have to invest in a friendly and warm type of interior.
  • Low Overhead Costs: Compared to other traditional kitchens, which have to pay taxes, overcome high maintenance costs, a Cloud Kitchen experiences fewer overhead costs.
  • Easy Expansion: The Cloud Kitchen provides a provision to expand your market according to your choice, and there is no additional overhead cost or planning involved in it. As the Cloud Kitchens are virtual kitchens, i.e., totally dependent upon online food ordering websites and apps, it is easier for a cloud kitchen business to expand.
  • Low Labour Costs: Cloud kitchens are very beneficial in terms of having a low labour cost compared to a restaurant or other traditional kitchens, where the labour costs are high along with the maintenance cost and tax facilities.
  • High-Profit Margin: The Cloud Kitchen is a virtual kitchen where there is a low overhead cost, low labour cost, and overall less maintenance in comparison to other restaurants, due to which the overall profit margin is very much higher.

Conclusion:

Cloud Kitchen business is one of the most trending businesses in India and across the world. The cloud kitchen is a business idea where a small infrastructure and a small group of skilled individuals can effectively run the operations successfully on a day-to-day basis.  cooking and management to set up a business for providing cuisines to the customer through an online food ordering system. You would have understood from this article that the requirements are not too complex. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: What are the basic requirements to set up a cloud kitchen?

Ans:

The basic requirement to start up a cloud kitchen is to consider the location, kitchen equipment, packaging, marketing, initial cost investment, and various licenses.

Q: Are there any drawbacks related to Cloud Kitchen?

Ans:

A cloud kitchen is dependent for business on other online food platforms A cloud kitchen doesn’t have visibility in public because they are just a virtual kitchen.

Q: What are the benefits of the cloud kitchen?

Ans:

The Cloud kitchen business is very beneficial in this modern era. The overall management cost, overhead cost, labour cost is very minimal in cloud kitchens in comparison to other traditional restaurants and dining. Moreover, Cloud Kitchen requires less area and can be set up in any part of the city.

Q: What is a cloud kitchen setup?

Ans:

A cloud kitchen setup is said to be a virtual kitchen that provides customers with delicious cuisine from an enormous variety of menus through the help of online food ordering websites or apps like Swiggy, Zomato, and Uber eats, etc.

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