The food industry is evolving. With the rise of third-party delivery apps, more and more restaurants are going virtual, opting to ditch the dine-in experience in favor of a cloud kitchen setup. But what exactly is a cloud kitchen? And is it right for your restaurant business? Let’s take a look at the most important things to consider before opening a cloud kitchen.
What is a Cloud Kitchen?
A cloud kitchen is a commercial space where food is prepared for delivery only—there’s no dine-in service. Because there’s no need for dining space or front-of-house staff, this can be smaller and more affordable than traditional restaurants. This makes them an attractive option for startup business owners.
Cloud kitchen’s primary income source is delivery orders placed through third-party apps.
Is a Cloud Kitchen Right for My Business?
As with any business decision, there are things you need to consider first before opening. Some of these include:
The Type of Food You’re Serving
Cloud kitchens are great for businesses that focus on delivery or takeout orders. If you’re serving food that doesn’t travel well or that customers prefer to eat fresh and hot, there may be better options than opening this business.
The Best Food
Here is the list of the best food for your cloud kitchen:
- Chinese food
- Ramen noodles
- Curry dishes
- Thai food
Cloud kitchens are also popular among businesses that offer healthy, prepared meals—such as meal delivery services or subscription-based meal kits. Customers are willing to pay a premium for convenience and don’t mind if the food is prepared off-site.
Your Target Market
Before opening this kind of business, consider your target market. Are they the type of people willing to order food delivery? Do they live or work near your anticipated location? Remember that most delivery orders are placed during lunch and dinner hours, so you’ll want to ensure enough demand in your area to sustain your business.
Consider if others already serve your target market with the same business in the area. If there’s a lot of competition, you’ll need to find a way to stand out—by offering unique menu items, competitive pricing, or superior customer service.
When starting a cloud kitchen, you must first identify your potential customers. There are different types of people that would order from you. The most common ones are:
- People who live alone
- People who work long hours and do not have time to cook
- People who want to try new foods but do not want to go to a restaurant
- People who are on a diet and want healthy food options
- People who have food allergies or special dietary needs
One of the benefits of a cloud kitchen is that it can be more affordable than a traditional restaurant. But you’ll still need to factor in the cost of commercial rental space, equipment, and staff. Do you have the upfront capital to cover these costs? And can your business generate enough revenue to make a profit?
When considering your budget, even if you have the money to operate, you’ll need to consider the return on investment. A cloud kitchen requires less staff and overhead than a traditional restaurant. Still, it also has the potential to generate less revenue because there are fewer customers.
You must be confident in your business model and ability to generate enough orders to make a profit.
Food Preparation and Safety
Another important consideration is food safety. Because cloud kitchens don’t have dine-in service, customers won’t see how clean your kitchen is or how your food is prepared. This means you’ll need extra care to ensure that your kitchen is spotless and that your food is cooked properly.
It would be best if you also had a food safety plan in case of an issue with your food. This plan should include procedures for recalls, customer complaints, and foodborne illnesses.
Foodborne illnesses are preventable. Since cloud kitchens rely heavily on water for cooking and cleaning, one of the things you can do is have ultrafiltration in water treatment in place. Without proper ultrafiltration, your water could contain contaminants that could make your customers sick. This is also important to consider if you use recycled water in your kitchen.
You should also ensure that whoever handles the food is properly trained in food safety. Make sure that the staff wear gloves and wash their hands regularly. You should also have a system in place for them to report any food safety concerns. If someone is sick, it’s better not to allow them to work in the kitchen. If there are complaints about your food, you should investigate them and take corrective action if necessary.
Another important consideration is technology. Because you won’t have dine-in service, you’ll need to invest in technology to help you take and fulfill orders. This includes a POS system, online ordering platform, and delivery management system.
You’ll also need to invest in kitchen equipment, like commercial ovens, stoves, and refrigerators. But you won’t need as much equipment as a traditional restaurant because you won’t serve food onsite.
Tracking Your Inventory
You should also consider the technology you’ll need to track your inventory and manage your kitchen. This includes a food cost analysis tool and a recipe management system. These tools will help you make sure that you’re using the right ingredients and portion sizes to make a profit. The tools you can use are:
Recipe costing software:
This helps you determine how much it costs to make each dish on your menu. This information is important because it will help you set menu prices that cover your costs and generate a profit.
Recipe management software:
Helps you create and manage your recipes. It can also help you track inventory and order supplies.
Food cost analysis software:
This helps you track your food costs and see where you can save money.
Customer management and delivery tracking systems:
This will help you manage customer orders and track deliveries.
Suppose you’re thinking about expanding your restaurant business by launching a cloud kitchen. In that case, there are some things you should take into account first. Think carefully about the type of food you want to serve, who your target market is, and what kind of budget you have. Additionally, consider what your long-term goals for the business might be. This way, you can be sure that this is the right decision for you and your business.