Cloud kitchens—sometimes called ghosts, dark, or virtual kitchens—conduct their business online. There are no dine-in options, and everything is delivered straight to the customer’s door. Since the pandemic started, food delivery services have reached an all-time high, with many places still disallowing close contact and dining in.
So many people now opt to have their food delivered to their homes instead, and budding entrepreneurs quickly pick up on this trend. If you’re looking to start your own cloud kitchen business or online food delivery service, here are some basic guidelines to keep in mind to ensure that your business runs as smoothly as possible:
Decide on a Name and Menu
Of course, the first step to starting any business is deciding what you’re selling and what you will call your enterprise. Regarding the food industry, picking a good name is just as important as choosing a menu. Pick something catchy, on-brand, and, most significantly, one that doesn’t sound too similar to another existing restaurant. Naming your business after your family name or nickname is a classic choice.
Other than that, developing a menu is another thing that’ll set you apart from your competition. While having a variety of food can work, focusing on one specific niche or type of cuisine is best for first-timers. There are many cuisine options—classic American, seafood, vegetarian, and dessert. You can also focus on drinks like juice, smoothies, or boba tea. Developing your menu is about finding what you’re good at and what sets you apart from other restaurants.
The Right Price
Pricing can be tricky. You have to take into consideration a lot of factors. There’s the food cost, the labor cost, the delivery fees, and your gross profit margin. Suppose that sounds too much already; prepare to do some more math when you’re running the business. Pricing your menu is about finding the right balance between offering affordable prices for your target audience and getting enough to maintain a considerable profit. Finding that balance while maintaining a set quality can be tricky. But once you’ve got it down, the rest won’t be as hard anymore.
When in doubt, look to your customers. Are you catering to working adults or students? How about offering significant portions for parties or large groups? There’s also a market for square meals for one or two diners. Whatever the case, think about what your target audience can afford with the portions and quality of the food you offer, and don’t overprice.
If you offer meals or snacks for university students studying late at night, you can’t price your stuff with the income of a working adult in mind. Don’t skimp out on turning a profit, but don’t be too greedy, either.
Build Your Kitchen or Find a Commercial Space
Finally, it’s time to find your kitchen. Food safety laws in some states prohibit a home kitchen when running a business. So unless you live where it’s OK to work from home, finding a commercial kitchen space is your next step. If you can afford to, you can buy your kitchen space and use it exclusively for your business. Not only will you have exclusive rights to everything in it, but you’d be in charge of all your working hours and the type of equipment you use.
Of course, you’d have to pay upfront for the space. Another cost is equipment maintenance, such as fridge repair, stove maintenance, and overall kitchen upkeep. You must submit to routine inspections and acquire all the necessary permits and insurance. But the good thing about it is that the space is all yours to use, and you don’t have to share it with anybody or work around other people’s time, giving you more freedom and storage space.
Additionally, you don’t have to worry about your storefront location since you’re a small business. You can run your business from any neighborhood, provided that it meets all safety regulations and won’t affect your customer retention or sales.
While buying your kitchen is undoubtedly an option, renting a commercial kitchen is economical. A commercial kitchen allows you to use it for a set period, such as by the hour or day. This entails that you won’t have sole use of the kitchen and won’t be able to work for too long. But it’s much more affordable than buying your kitchen space.
Think about what you can afford or want to invest in. Owning your kitchen can be good long-term, but renting a commercial kitchen is a low-cost option if you’re starting.
Find a Delivery Service or Make Your Own
The most crucial step in starting your remote delivery service is finding a provider. Companies like GrubHub, DoorDash, and Uber Eats specialize in food delivery. They are the obvious first choices for delivering and marketing your products to a large audience. While it’s true that it can expose your business to a larger audience, remember that these companies take a set commission fee from your profits as payment. The percentage can be daunting, with some taking as much as 30 percent. But it’s still worth considering for their reach and service.
You can manage your deliveries if you’d rather not lose any of your profits. So long as you have your means of transportation, whether by bike or car and can hire a person to handle the deliveries, you can do it yourself.
Market, Market, Market
So you’ve found a place, found a target audience, memorized your menu by heart, and decided on a delivery service provider. Now it’s time to market the hell out of your business.
If you opt for a third-party delivery service, you’ve already done half your job. Your business shows up in an online marketplace that millions can view, and you can pay for additional advertisements on their mobile app or site.
You can also try different online marketing strategies, such as social media campaigns, paid sponsorships, and email marketing. You can also offer your customers discounts, exclusive deals, and loyalty benefits. The most effective form of marketing for any restaurant is the quality and service you offer. If you consistently serve good food, provide excellent service and provide punctual delivery—your customers will do the marketing for you for little to no price.
As with all businesses, you are opening a cloud kitchen will be difficult, especially if this is your first venture. Before investing in a dedicated kitchen, ensure you get your menu, pricing, and branding right. After that, decide whether you want to deliver the food yourself or find a third party to do this for you. And most important of all, don’t forget to market.
