A Short Guide to Opening a Cloud Kitchen in 2023 and Beyond

From childhood, Ellie always had a keen interest in cooking. She completed her hotel management course and wanted to start her restaurant, which was a childhood dream for her. 

But then Covid-19 happened, which had a disastrous impact on restaurants in the US. Government closures resulted in worker layoffs and revenue loss for eateries. By July 2020, 16,000 restaurants had permanently closed.  

During such a grim time, Ellie decided to start a cloud kitchen. These virtual restaurants were gaining popularity due to their contactless service, home deliveries, and online ordering.   

This story explores how Ellie built a successful cloud kitchen business. But through this story, I want to help entrepreneurs like Ellie who are aspiring to build their cloud kitchen get a right start.   

What is a Cloud Kitchen?

Imagine a restaurant with no dine-in facilities. They only prepare food for delivery or takeout and have no dine-in customers. Restaurants like these are called cloud kitchens. 

There are many benefits of cloud kitchens. It significantly reduces labor costs and eliminates the need for dinnerware, decorations, and branded signage; that you see in physical restaurants. 

Unlike physical restaurants, it's possible to open cloud kitchens anywhere—for example, a basement, warehouse, or even your home kitchen. So, starting a cloud kitchen is cost-effective.

There are approximately 1500 ghost kitchens and counting in the US. So, here are five steps that Ellie undertook to build her cloud kitchen. 

Come Up With a Cloud Kitchen Model

There are different types of Cloud Kitchen models. Ellie adopted a brand-owned cloud kitchen model.  

Under this model, she rented a warehouse to build her cloud kitchen and established a delivery-only operation with no takeaway or dine-in. It's a simple model with One location. One brand. One Kitchen.

For her virtual restaurant, Ellie chose an area with cheap rent. The area was close to the densely populated spots. She employed a small team that handled customer orders. 

There is potential to generate profit under this model. 

It doesn't require much initial investment to start the kitchen, which is an advantage for new entrepreneurs with limited capital. Cloud Kitchen requires less substantial investment than a dine-in restaurant.

One can also run a joint dine-in/cloud kitchen operation. Although, it's best to test out this concept beforehand and see if there is a demand for it.      

Business scaling will require effort. The best tactic is to expand the original operation and create a centralized kitchen. Brands can cover more ground through temporary locations, thus reducing costs.  

There are other types of cloud kitchen models: 

1. Independent/Single cloud kitchen model 
2. Multi-brand cloud kitchen models 
3. Hub and Spoke model 
4. Commissary/Aggregator Cloud Kitchen Model
5. Outsourced Cloud Kitchen Model (Kitopi Model)
6. Hybrid Cloud Kitchen Model 

To read about them, I suggest checking out GoodFirms research on Cloud Kitchen. The research covers in-depth information about different types of cloud kitchen models.  

Mobile Apps are the Most Preferred Channels for Ordering from Cloud Kitchens

GoodFirms' research revealed that mobile apps are the most preferred channels for ordering from cloud kitchens. So, Ellie invested in a mobile app. 

When it comes to building a mobile app, the initial concern is to find out the best mobile app development companies. I recommended checking out the top app developers from Goodtal. They provide the most trustworthy mobile app development solution. 

By choosing Goodtal, entrepreneurs will get an end-to-end service at an affordable rate. They will get access to the best app developers working on their app with a streamlined workflow. 

Recommended Reading: How Mobile Apps Have Simplified Our Lives?

Subscribe to Third Party Apps

Ellie started using third-party services like Doordash, Grubhub, Ubereats, Postmates, EZCater, etc. They are national brands with many customers who intend to purchase. Ellie realized that she was missing out on a lot by not being listed. 

It also increased her delivery capacity beyond what she hoped to achieve with her crew. They may charge a fee for your cloud kitchen. Still, it's better to earn $6.67 out of $10 than $0 with zero exposure. 

So, like Ellie, other entrepreneurs should also partner with third-party apps when launching their cloud kitchen.    

Get a Better Idea of Your Area Demographics          

Ellie found out that blue-collar communities are slightly biased toward cuisine concepts compared to white-collar communities. They are also price and time-sensitive regarding total meal cost and preparation time. 

Creating a hipster food fusion concept in a blue-collar community will be challenging. Similarly, opening a greasy spoon in a white-collar one will be an uphill task. So, design a menu to serve your area's demographic.

Use Email Marketing and SMS to Reach Out to the Customers  

Ellie decided to market her cloud kitchen through SMS and Email marketing. She would send exclusive offers through emails to her customers. It would include new menu items or planned contests.   

When running a cloud kitchen, constantly innovating your menu is essential. But how will people come to know about it? It might be missed because customers order food with a specific dish in mind. So, Ellie sent SMS updates regarding new dishes she added to the menu. 

Sometimes, Ellie would send codes to her customers for complimentary recipes with their orders. 

All this would keep the consumers updated, and newer orders would continue to pour in.    

Also, check out Goodtal's best digital marketing companies.  

Digital marketing is essential to connect with customers these days, and it's cheaper and more effective than traditional forms of marketing.   

You will get a list of the best digital marketing agencies to choose from who can take your Cloud Kitchen to great heights. 

Recommended Reading: Killer Mistakes That Can Ruin Your Digital Marketing Campaign

For Further Reading 

I recommend checking out GoodFirms research on Cloud Kitchen. It shares insights on the future of the Ghost Kitchen in the restaurant industry, top tech that cloud kitchens can leverage to grow, and much more. The research will help you get the right start for your cloud kitchen.