Monthly Archives: May 2021

Wondering to invest in cloud kitchen? But not sure whether it’s a good idea?

Let me tell you how cloud kitchens are going to grow in the next 5 years. It would take 10 mins of yours to decide whether investing in cloud kitchens in 2020 is a good idea or not.

Considering the current scenario of the food and beverage industry and specifically the online food service, cloud kitchens have taken all the attention and increased the value for the online food ordering process. It has been one of the profitable food businesses for people having low funds. It is a less risky, high-demand food business in this 2020 era. 

In 2020, the pandemic has devastated many industries, including restaurants and cafes. Business owners of these sectors are now converting their restaurants into cloud kitchens. After this pandemic, people are most concerned about safety and hygiene. Cloud kitchen offers them their desired food on their doorsteps. 

Also, in this advanced technological generation, people like everything to be on their doorstep without them putting any effort. So, investing in a cloud kitchen can be a great option during this time.

Some best reasons to invest in a cloud kitchen in 2020 –

Low Investment

Unlike restaurants, you don’t require a large space or fancy locality to open your cloud kitchen. It can be opened even on the backside of your apartment or a small space near your garage. Cloud kitchen has virtual customers whom they serve via online food delivering service or food aggregators. So, no need to have attractive interiors with shiny furniture. Cloud kitchens only require a skilled chef and a manager. As dine-in services are not there, so no need to hire staff for food serving purposes. 

Cloud kitchen can save up to 50% of the revenue one needs to open a restaurant or cafe. 

Safer Environment

After this pandemic, hygiene and safety are one’s most priority. Providing your customers a safer environment by running a cloud kitchen is easier than running a restaurant. Having fewer people in the kitchen makes the contact between each other minimal thus making the environment safe. This benefits both the staff and the customer from being in the possibility of any health hazard. 

Scalable

Cloud kitchen offers you the freedom of running multiple brands from a single kitchen. In this case, you can easily scale your chains of brands. You don’t need to buy separate places to operate for different brands by paying hefty rental amounts, instead you can operate all your brands from a single location, single kitchen, and same staff saving a huge amount of money. 

Also, opening multiple brand outlets in various states and cities is easy because the investment will be the same as in the beginning. 

Trust 

People these days are trusting the cloud kitchen models more than restaurants and cafes. Whether it is a restaurant owner having more than 10 years of experience or a beginner who wants to start a business in the food and beverage industry, the first option for them has become the Cloud kitchen model for its several benefits. 

This model offers easy operation, low expenses, and more efficiency. People trust this model because it assures the ROI faster than setting up any restaurant or cafe. 

Profitable

While running a cloud kitchen, your costs get reduced to half when compared with running a restaurant or cafe. Low rent, fewer employees, low utility bills, and customer satisfaction make this a profitable model. 

These days, cloud kitchen is an on-demand business and if you build your brand properly, it can be franchisable. Franchises can make you earn good profits. 

If you are thinking of investing in a cloud kitchen in 2020, I would say this is one of the wisest decisions you have taken. Researchers say cloud kitchens will grow 5 times in the coming 5 years, so make your decision faster before any delays. I hope you liked the article and would start investing in cloud kitchens soon. 

Thank You!

Before starting any kind of food business, the owner needs to issue some important licenses to run their businesses legally. These licenses certify their brands that they are obeying the rules and regulations imposed by various departments of Food security, government bodies, and police.

It is always recommended to issue the license before starting to run the kitchen in order to not pay any kind of penalty when the legal authorities do a check-up.

FSSAI

1. It ensures the security of food products (It ensures the food delivered/served from a particular kitchen follows the guidelines of the food safety standards)
2. It is mandatory to be issued to start any kind of food business.
3. It has a tenure of 1–5 years and can be renewed.
4. It consists of a unique 14-digit registration number.
5. Can be applied by filling up the application through https://foodlicensing.fssai.gov.in
6. Documents required — Id Proof, Address Proof, Kitchen Layout plan, affidavit, NOC from the owner, Declaration of food safety management plan, List of food category.
7. License registration fee — Rs. 100/-

Goods Service Tax(GST)

a. GST registration is mandatory for a cloud kitchen.

b. 5% is the GST charge for a food business.

c. It is issued on behalf of your brand.

d. It is applied by filling in necessary details in www.gst.gov.in

e. Documents required — photo of the owner, ownership details(electricity bill, property tax receipt), copy of the rental agreement(if rented space), details of the bank

f. License registration fee — Free

Trade license

a. It helps in ensuring that no unethical business practices are being carried out and all the guidelines are being followed by the kitchen.

b. Govt. has made this license a necessity for all businesses.

c. Eligibility — the applicant should be above 18 years, no criminal records,

d. It takes 7–10 days for the license to get processed.

e. Validity — 1-year

f. The license can be applied by visiting the respective state’s municipal corporation website.

g. Documents required — Aadhar Card, Property Tax Payment Receipt, a letter from the owner of the property, Sanction(Rent agreement/NOC from landlord)

h. License registration fee — Rs. 5000/-

Fire & Safety License

1. It is not mandatory for business but is recommended by the Fire and Safety Dept.
2. It adheres that the kitchen is following the safety rules and regulations.
3. Validity — 5 years
4. Can be issued from the fire station or department of a particular state.
5. Documents required — Copy of site plan, site agreement, and license(if any)
6. License registration fee — Free

Shop Establishment Act

1. To run a food business in India, one must register its kitchen under this act.
2. Registration should be done within 30 days from the business initiation.
3. License varies from city to city.
4. Can be applied in https://www.hubco.in/shop-and-establishment-registration
5. Documents required — Pan card, Aadhar card, address proof, details of employees.
6. Validity — 5 year
7. License registration fee — Rs. 2000/-

I hope this article helps you understand the legal compliances that need to be done before running a cloud kitchen. All the legalities can be done on vakilsearch.com under professionals.

Thank You!

Running a cloud kitchen successfully not only requires good branding, advanced equipment, high skilled chefs, or high investment. It also depends on how the menu is designed, how the prices are structured, the offers the kitchen is providing, everything is essential.

Pricing is a crucial part and most food business owners don’t focus on this much. There’s a pricing science that is applied while setting price tags on each and every item served by your cloud kitchen.

In this article, all the pricing hacks that are used for setting a good price tag for your food items are explained. 

1: Have the first option with a high price (to be used for food aggregator)

• Always set a high price in the starting by default as this gives the customer a reference point of the high number and this way he will be perceiving low prices items mentioned below as a good deal.

For Example, Faasos

2: Offer a decoy option

• Have a bad option that none of them will want to buy but still keep it to make other options look good. 

For Example, McDonald’s

3: Display prices in small font size(website only)

• Our brain perceives large font size as bigger and has more magnitude.
• We should avoid fonts of a large magnitude but when offering a crazy deal or discount, we should write with a big font size in order to grab the attention of the customers.

For Example, Dominos 

4: Remove the comma

• Researchers found that removing commas (e.g., $1,499 vs. $1499) can influence make your price seem lower.
• Because when a comma is included, we will read 1,500 as one thousand five hundred but without a comma, we will read it as fifteen hundred. Less the number of words, the lessor the brain perceives.

For Example, Biriyani by kilo, Behrouz biriyani

5: Introduce features if you want to increase the price

• If you want to increase the price of an object first increase the features or benefits then increase the price. Simply increasing the price can affect your sales as when a customer orders from you, the price of certain food items gets inherited in his mind. So, observing immediate changes can stop him from ordering from you.

For Example, if you want to increase the price of a chai, give an offer of biscuit/cookie along with the chai in the initial stage. Eventually, you can keep the price and stop giving free cookies with the chai.

6: Reduce the last digit by one while pricing

• The last digit of a number decides the magnitude if the amount and when it gets reduced by one, researchers say it seems less to people. (even if the difference is 1 from the actual value, still the human brain perceives it as less amount)
• A price tag of 2000/- may seem a lot but when having a price tag as 1999/- our brain perceives it as a lesser amount.

For Example, KFC, Dominos

7. Combo pricing to increase the ticket size

• Many big brands use this hack to increase the overall expenditure of the customer while doing the billing. 
• Once you choose the item, they will start asking you to add several more items to increase the ticket size. 

For Example, In McDonald’s, the staffs are so well trained that when you ask for any burger or any meal, they will keep on asking you to add fries, to add any shakes. This is done so that the ticket size per order gets increased.

I hope this article will help you to structure your pricing appropriately. If the blog is worth enough to read, then do give a thumbs up and share it with your mates. And do comment below your feedback!

Thank you!

Marketing of your brand plays a crucial role when it comes to scaling up your brand. Strategic marketing often results in growth for your business. If you successfully educate customers, keep them engaged, create a strong reputation in their minds, and smartly sell to them, your business will most likely do well.

Marketing adds value to your brand. So, choosing the correct marketing techniques often lead to building a strong brand.

Here are some of the best ways on how you can market your cloud kitchen to boost your sales.

Optimize your Website

Investing in building a good website helps attract more customers. (As most of the orders are received via the website or mobile app, it’s highly essential to build a good website)

• One-pager website — (Single page, precise menu, feedback form, contact details, customer reviews)

• SEO friendly — (Search Engine Optimization)

Building an SEO-friendly website helps the audience locate you easily on Google Search. Your website can show up whenever a keyword related to your niche is being searched in the Google search console.

• Include Action buttons – (Order Now, Contact us)

Market on aggregator platforms

a) Paying aggregators to promote

• Zomato

• Swiggy

b) Using Aggregators as a marketing tool

Send pamphlets along with orders to attract customers for direct orders. Gather customer data, ask for feedback, send crazy offers to grab attention

For Example: Buy 1 Get 1, Crazy discount on items, 2+1 offers, etc

Online Advertising

1. Facebook Ads

• Running Facebook ads helps you to reach your exact targeted audience

(While starting the campaign, you can choose age, interests, and location of your audience)

2. Google Ads

• Running Google ads improves the visibility of your brand when searched for similar keywords as your niche.

3. Online Customer Feedbacks

• Try gathering positive referrals from various platforms.

(Facebook review, Google reviews, Instagram referrals, Website reviews)

• Getting a good response of reviews can help your website rank higher in the google search visibility

Customer Retention

• You can offer (loyalty rewards) to your old customers (discount on next order, special offer when buying for more than 300/- or you can include a free dessert with their next 2 orders)

• Engage with them through Whatsapp, text messages, etc

Social media Presence

• Build a strong brand presence using social media platforms. (Showcase pictures of your dishes, videos of preparation, hygiene regulations being followed)
• Create engaging posts which attract the customer to order from you.

For Example: These kinds of posts help you to interact with the audience.

• Greet your audience on every occasion. Remind them to order from you on special days.

These are some of the best techniques to market your cloud kitchen. I hope you liked this article, do follow, like, and share.

Thank you!

Yes! you saw it right. It is definitely possible to start a cloud kitchen from home. 

People often don’t start their cloud kitchen thinking of the high rent they have to pay for the commercial spaces, but they are not aware of the fact that Cloud kitchen is a ghost kitchen that isn’t visible to your customers. So, whether you have it in a rented place or at home doesn’t really matter until the food served is of the best quality.

Reading this blog would help you know what are the things required to start your cloud kitchen from your home.

1. Investment

The initial investment would be comparatively low when you start from home. You can save on high rents that you might have paid when starting from rental space. The existing equipment can be used for cooking, so no additional investment in buying equipment. The salary of a skilled chef can be neglected if you can cook yourself.

    2. License

There’s a misconception in people’s mind that it is not legal to start a cloud kitchen business from home. Is it so? Well, there are specific licenses to be issued by the owner that makes him/her legally run the cloud kitchen even from home. 

The licenses are FSSAI, Shop establishment act, and Trade License. Other than these, while starting a cloud kitchen from home you have to issue the Non-Objection Certificate(NOC) from both police and society. It ensures that all the guidelines of the society are being followed by the kitchen. 

    3. Equipment

While starting a cloud kitchen from home with low initial investment, try to design your menu based on the existing set of equipment. This helps to save a lot of money on buying new and expensive equipment.

For example, let’s say you have an oven, you can make your kitchen serve bakery items. Cakes, cookies, muffins, etc can be prepared using the oven. In this case, you don’t need to spend on additional equipment. 

     4. Staff 

Staff is mostly required when you rent a commercial space for your cloud kitchen. When starting from home, you can hire a helper or an assistant who can help you and a supervisor to handle the grocery stocks and accounts. If serving a premium dish that requires a skilled chef, you can hire one, or else you can serve people by cooking yourself.

   5. Marketing 

Marketing is moreover the same whether you start from home or commercial space. You can distribute flyers of your kitchen to nearby societies, distribute business cards to your neighbors, use social media platforms such as Instagram and Facebook to target local customers. 

One best way of marketing is having good packaging for your food. It plays a major role in creating an impression from the customer’s end. Along with packaging, send appreciation notes with orders to gain customers’ interest.

   6. Food Aggregators

Food aggregators such as Zomato and Swiggy also lists home cloud kitchens. The procedure to get your kitchen listed is the same. You should focus more on direct orders rather than depending on food aggregators. They charge a hefty commission on every order, so why not go for direct orders and earn a good margin of profit? You can gain more direct orders by acquiring your customers’ information. You can create more engagement in your social media platforms by offering crazy discounts for the ones ordering directly from your kitchen. 

So, are you ready to start your cloud kitchen now? I hope this article gave you clarity on all the essentials required to start a cloud kitchen from home. If the blog is worth enough to read, then do give a thumbs up and share it with your mates. And do comment below your feedback!

Thank you!