What does a Ghost or Cloud Kitchen mean?
A Cloud Kitchen is basically a restaurant that operates its business entirely online. In essence, the restaurant owner has a location where he sets up a kitchen. Orders are received through third-party food delivery apps or on the restaurant’s website and app. There is no dine-in service offered to customers at all. The commercial kitchen is simply used to prepare food and it is then sent off for delivery.
These are restaurants that do away with brick and mortar locations and focus only on takeaways, whereby a consumer has to use a website or mobile app to order food. While delivery services aren’t new to a restaurant’s business model, to uproot dine-in facilities completely from it, is an unprecedented move, which until a few years ago would’ve been unimaginable.
Restaurant experts unanimously predict the future as being delivery-oriented and there are several studies to support this claim. Leveraging on the robust online delivery market at the moment, the times ahead definitely look rosy for cloud kitchens. But like all businesses, even it has its own share of pitfalls.
Looking to invest in a cloud kitchen? Take an in-depth look at the pros and cons of this new restaurant concept to see if it suits your needs.
What are the benefits of opening up a Cloud Kitchen?
Running a conventional restaurant is synonymous with paying exorbitantly high rents. Most times, restaurants are set up in fancy neighbourhoods where rental costs soar high. Added to this are the utility bills for water, gas, and electricity that you have to pay every month. However, when you’re running only a kitchen and don’t have a dine-in space, your costs are greatly reduced. You get to save money on utility bills. You only need to hire chefs and cooks and don’t have to appoint servers. Moreover, given that you don’t have to deal with customers on a daily basis, you also save on the money you would have to otherwise spend on sanitizers, gloves, and so on. These costs would only have to be made for your employees.
A phenomenal advantage offered by cloud kitchens is that you have an immense opportunity for expansion. Let’s say you have ideas for setting up more than one restaurant. You want to set up a North Indian Dhaba style restaurant as well as a pizza place. You could now launch both businesses from the same cloud kitchen. In this way, you’d be saving a ton of money on gas, utensils as well as other utilities. This is an extremely economical option.
While running a small space like a cloud kitchen, you get to save on many overhead costs. Your rent is much lower, you need a lesser number of employees, utility bills aren’t too high… the list goes on and on. When you don’t have to make these huge payments every month, it can do wonders in increasing your overall restaurant profit. This means you can spend a lot more on marketing, promotion, and expansion.
Employee safety is an integral part of running a business. In simple words, a model where there is less people and hence, minimal contact. Instead of exposing your servers, cashiers, and staff to customers from all nooks and corners of the town, you can avoid the hassle of health scares altogether. This keeps your employees happy and safe too.
When your entire business runs online, it means that customers make orders using different websites and applications. Given that they tend to use one fixed number or email address for their food orders, you can save this data and analyze it on your restaurant POS for better service. You can also send out newsletters and promotional emails from time to time. It is also easy to get a comprehensive idea about what most customers like and dislike. You can then modify your service in a way to satisfy your customers more.
Once you have a successful cloud kitchen up and running, you can choose to open more cloud kitchens in other parts of town. Given that your rental and overhead costs are lower, it is a feasible option. When you have cloud kitchens in different locations, you can also provide quick service to customers in many parts of the city. Quick and efficient service usually helps in ensuring that customers come back from time to time.
Running a Cloud Kitchen offers a plethora of benefits to restaurant owners. This business model makes operations easier and more efficient, along with ensuring high customer satisfaction. Given the current state of affairs brought about by the global pandemic, investing in a cloud kitchen is a wise decision.
Whether you’re thinking about launching your first business in the restaurant industry or have decades of experience, this is an option that has a lot to offer. Focus on marketing and promotions using social media tools to spread the word about your business and get set to see your restaurant grow successful in the near future.