The food and beverage industry has seen a drastic evolution in the past decade with different types of business models coming into the picture based on changing consumer behaviour. Of course, digitisation has played a part in this phase of evolution, giving rise to the concept of cloud kitchen.
The Cloud kitchen model has been a magnet for entrepreneurs as it requires low capital investment and is easier to operate and maintain when compared to the physical restaurant. But what is the mantra to succeed with this model? Here’s a look at how to build a successful cloud kitchen business and solutions that help in streamlining the operations right from the start.
To start off, here are a few things to keep in mind:
- Location: Finding the right location is important as this would help in defining the crowd the business would be catering to based on which the menu can be planned accordingly.
- Capital: Although this kind of business model requires low capital investment, to start with, one needs to plan the operational expenses considering it would take some time to see a spike in the order volume.
- Licenses: On the legal part, there are few licenses the business would need. Registration of the business is the primary requirement. One would also need FSSAI license and GST registration to start with.
- The team: Hiring the right talent with relevant experience to head the kitchen would not only help in bringing out the taste but also help in reducing the wastage and cost involved in the production.
- Software: As the name suggests, it’s a cloud kitchen and the primary source of orders would be through online channels. The more number of channels the better. There are aggregators like Swiggy and Zomato that act as a catalyst to bring in the orders, simultaneously, a brand can also build their own channels like website and apps to add on to the orders coming in. UrbanPiper is a company that helps restaurants with having their own website and Order Management System. In addition to that, a business can manage all their online channels, website, app and aggregator orders, from a single dashboard.
In the world of Cloud Kitchen, it is essential to select the right set of applications that are tuned towards handling a dynamic menu and streamlining online order management.
As HUB is an ideal set of tools to power an online order management system, a product called Prime is being developed by the UrbanPiper team that will take Cloud Kitchen management multiple notches higher. (Stay tuned for more on this).
While it’s quite easy to start a business, sustaining it is the most challenging part. There are quite a few factors that impact the sustainability of the business like an adequate amount of working capital, marketing & promotions to increase the sales volume, experimenting with the menu to identify what’s performing and what’s not.
Apart from the above-mentioned factors, operational efficiency & consistency are the key factors for long term sustainability. For a cloud kitchen, orders through aggregators like Swiggy and Zomato are the major contributors to the revenue. To generate more orders, the business needs to maintain the ratings and listings on these platforms. Aggregators look at operational parameters to give a rating to the restaurant. Parameters like order acceptance rate, acknowledgement percentage and MFR time are some of the key contributors to calculate the ratings. Solutions like HUB by UrbanPiper help restaurateurs in not just managing all the aggregator orders at one place but also in maintaining the ratings by keeping a check on these parameters. HUB helps in automating processes like acknowledging orders and marking Food Ready based on the predefined preparation time, reducing the risk of losing out on orders and delay in order processing. It also gives an insight into the current state of Restaurant Health Index (RHI) so that the business can analyse and understand the areas that need improvement.
Once the business is all set and the popularity is increasing, it’s a good time to focus on the growth. A business can look at opening multiple brands from the same location, or increase the number of locations to cater to a larger audience or both. To simplify the operations of managing multiple brands and their menu or getting better visibility on the business performance of multiple store locations, HUB can come in handy. As it supports multi-brand kitchen operations, it becomes easier to manage orders and manage the menu of all brands in one place. In the case of multiple locations, it provides visibility on the sales numbers and the performance of those stores.
Although the start can be easy, for the long run, consistency in terms of operation and production is the key. Master that and the possibilities for growth are endless. And with companies like UrbanPiper helping out at every stage of the business life cycle, the journey towards growth becomes seamless.