The costs of setting up a cloud kitchen business in India vary depending on a variety of factors, such as the type of cuisine, the level of technological infrastructure, and the location.
It is vital to know that there are some expenses that one can expect when starting a business of this type.
These include the cost of machinery and equipment, rent and security deposit, government licences, marketing and media, raw materials, packaging materials, and a reserve surplus.
Equipment and Machinery:
It is important to note that the type of cuisine being offered will determine what equipment and machinery is needed.
However, some basic pieces of equipment are essential in any kitchen, such as an
Some appliances that you might require for your cloud kitchen setup
Indian burner, Chinese burner, and stainless steel table. : Rs. 60,000
Electric Oven : Rs. 8000- Rs. 2,00,000 depending on quality
Gas Tandoor : INR 5,000
Electricity & Gas Cylinder
Second-hand equipment can also be sourced to save money.
You can save money by buying them from second-hand platforms such as OLX, Justdial, and QuikrBazaar for about Rs 3k+.
It is advisable to make a list of required equipment and research prices on platforms like Indiamart.
Suppose you want to buy a gas tandoor, you can simply click on the following link to get in touch directly with the seller.
You can also buy your setup equipment from local markets. For example if you live in Delhi, Gaffar market has great deals on second-hand appliances at affordable prices. Before purchasing any equipment, make sure that it is in good working order and that the quality of the machine is good.
It would be best if you rented a cheap space. Renting on the top floor of a building or at the back of a complex is an option.
Benefits of Renting Rooftop : It provides proper ventilation and does not get congested. It also safeguards in case of short circuit and fire.
If you do not have a kitchen on the rooftop or top floor , it is important to ensure that your kitchen space is spacious and well-ventilated.
A well-ventilated kitchen helps to prevent the buildup of smoke, steam, and cooking odours, improving overall air quality and reducing the risk of respiratory problems.
Don't find spaces in high-rent areas since you will eventually deliver the food to your customers and that can be done from anywhere. The rent for these spaces is cheaper as compared to a frontline shop.
Rent for approx 200 sq. ft. space in tier II or III cities can range from Rs 8,000 to Rs 10,000 per month, with a security deposit of one to three months of rental.
In metropolitan cities, it is recommended to lease a space for at least five years instead of renting for 11 months to avoid issues with landlords.
Additionally, it is important to ensure that the space is legally converted to a commercial property and to obtain necessary licenses such as FSSAI, Trade License, and Commercial Electrical Connection.
It is advisable to purchase raw materials in bulk to save costs. However, it is recommended to buy only 2-3 days' worth of materials initially until the demand is understood.
An analysis can be conducted to determine the most effective strategy for purchasing the appropriate amount of raw materials.
A budget of Rs 20,000 should be set aside for buying raw materials in the beginning, with the potential for more as the business grows. It is important to find reliable suppliers and negotiate for the best prices.
The best way to purchase raw material in bulk is by finding a wholesaler in your local market, as it will be cheaper to purchase raw material in bulk.
When it comes to vegetables, you should buy them from a local mandi rather than from a supermarket.
It is advisable to consider the shelf life of the raw materials and purchase them in smaller quantities to maintain the quality of the food.
Layout of Cloud Kitchen:
When it comes to the layout of your cloud kitchen, it will be easy to save a big chunk of the amount as you don't need to buy a fancy outlet with an amazing view.
You can start your cloud kitchen business from a basic kitchen area where you can set up the cooking counters separately.
For example, Rebel Food has come a long way since its beginnings, starting with just a single kitchen facility. Now, the space has been separated into different stations, for Fassos' counters are distinct from Behroj's.
Here are some important aspects to consider when designing and laying out a commercial kitchen:
Inventory and storage
By creating an efficient kitchen setup and layout, you can make the most of your space, improve food preparation and cooking processes, enhance team performance, and ensure safety in the kitchen.
There are four best ways to layout your ghost kitchen:
Assembly Line Kitchen Layout & Design
Zoning Kitchen Layout & Design
Galley Kitchen Layout & Design
Island Kitchen Layout & Design
1) Assembly Line Kitchen Layout & Design:
Assembly line layouts are an efficient way to optimise meal assembly for high-volume production, catering, or high-demand items.
The workflow is typically divided into three distinct sections: ingredient preparation, cooking, and plating/packaging.
During the first stage, ingredients are washed, peeled, chopped, and measured, depending on the recipe requirements.
The cooking stage involves the use of various kitchen equipment, such as ovens, fryers, and grills, to prepare the food to perfection.
2) Zoning Kitchen Layout & Design:
This particular kitchen layout splits up the kitchen into different areas based on the type of food being prepared.
Each station is separated from the others and categorised according to the specific type of kitchen equipment or meal preparation required for that particular dish.
This layout enables you to concentrate on putting together a wide variety of menu items.
Moreover, the storage and sink areas are usually located near the entry door, while the service area is situated close to the exit door.
3)Galley Kitchen Layout & Design:
A galley layout is a practical choice for small kitchens. It maximises space by placing all stations and equipment along the walls.
The sink, stove, and refrigerator are usually positioned on one wall, while countertops and cabinets run along the opposite wall.
The galley layout allows for easy movement between stations, saving time and energy.
It also provides ample counter space for prep work, making it ideal for cooking and baking.
4) Island Kitchen Layout & Design:
The restaurant's kitchen has a central island area with cooking equipment, facilitating easy access and enhancing efficiency.
The food prep and dishwashing areas occupy the kitchen's perimeter, providing ample space for the chefs to move around freely.
The dishwashing area is equipped with state-of-the-art equipment for efficient cleaning.
Overall, the kitchen layout is a perfect blend of form and functionality, enhancing the dining experience and boosting the chefs' productivity.
Before deciding on the best packaging, it is important to acknowledge that food is a multi-faceted aspect of our lives. It appeals to our senses of sight, smell, and taste.
A well-designed packaging can enhance the overall presentation and positively impact the ordering experience. It can also be seen as an investment in building brand recognition.
An example of this is Dominos. Their blue packaging creates a branding consistency, promoting brand recall in the minds of customers.
In the same way, if you order garlic bread, it comes in a rectangular box, while if you order north Indian food, it comes in a box with an airtight lid.
For instance, dry dishes like snacks and starters require sturdy cardboard packaging to protect them from moisture, dust, and other external elements.
Cardboard packaging is an ideal option as it is lightweight, recyclable, and easy to store.
On the other hand, liquid dishes like gravies and curries require airtight boxes to avoid spillage, which can ruin the entire dish.
Airtight boxes are designed to keep the contents fresh and prevent any leaks, making them perfect for liquid dishes.
When it comes to bread items like sandwiches and wraps, paper or foil packaging is suitable.
Paper packaging is an eco-friendly option that is easy to use and dispose of, while foil packaging provides an extra layer of protection and maintains the temperature of the food item.
The key to success in the food industry is creating brand recall. The more memorable your brand is, the greater the likelihood of repeat customers.
When ordering a larger quantity, the cost per unit decreases. It is recommended to use a white GSM board with lamination for a more professional and hygienic appearance, although grey boards can also be used if they are laminated.
Cloud kitchen owners often make the mistake of waiting to start marketing after their business has launched.
One effective way to do this is by running ads on social media platforms such as Facebook, Instagram, and YouTube, announcing the upcoming opening of a new cloud kitchen and allowing interested users to register their interest through a form.
This form will collect their name, email, and phone number. The incentive could be a discount coupon or a freebie item.
It is recommended to market even before investing in equipment. This serves two purposes - firstly, it helps gauge the demand for the cuisine/food items being offered.
Secondly, by marketing early, the cloud kitchen can build a customer base of 100-200 individuals who are already interested in placing orders upon launch.
This can improve the business's rankings and ratings on platforms like Zomato and Swiggy, and also reduce wastage by having a clear idea of how many orders to expect.
On the day of the launch, it is recommended to personally follow up with each customer through a phone call and remind them of the offer.
Ultimately, the success of the business will depend on the ordering experience, including factors like food quality, value for money, delivery time, and packaging.
If these aspects are satisfactory, customers are likely to become repeat customers and spread the word to potential customers.
It is important to offer an attractive incentive, such as a discount coupon or freebie, to encourage customers to register.
A minimum budget of Rs. 10,000 should be allocated for initial marketing. This can be used to hire a graphic designer or utilise tools such as Canva to create attractive advertisements.
It is advisable to have a reserve surplus to cover any initial losses in the business.
Choose an online food delivery platform:
In India, Swiggy and Zomato are the most handy apps when it comes to ordering food online. As they have a huge variety in food outlets.
For beginners, who don't have too much budget to promote their cloud kitchen they can easily connect with these online food delivery platforms to sell their homemade food with love to their lovely customers.
Firstly, set the items or cuisine in your cloud kitchen that you are going to show on these platforms.
Swiggy has a program called Swiggy Partner that allows home chefs and home businesses to sell their food on the Swiggy platform.
To tie up with Swiggy from home, you will need to have the following:
A FSSAI licence
A GST number
A cancelled cheque or bank passbook
A valid email address and phone number
Once your application is approved, you will be able to create a profile and start listing your food items on the Swiggy platform. Swiggy and Zomato are not a cloud kitchen, but these platforms help the virtual and cloud kitchen ecosystem.
Swiggy and Zomato charge a commission of 20-25% per order.
Swiggy will provide you with a delivery partner network that will deliver your food to customers. You will be paid for your orders every week.
The cost of Roll Box (8X8X2.5) on average can be around Rs. 6 per unit when ordering 5,000 pieces, though prices may vary.
Local suppliers or IndiaMart can help in finding suitable packaging suppliers. This can be used to pay for expenses such as rent, salaries, and bills while the business is still establishing itself.
To Sum Up:
In conclusion, the total budget for starting a cloud kitchen business in India can range from Rs 5 to 6 lakh.
An additional Rs 1,00,000 to Rs 1,35,000 should be set aside for day to day expenses and backup. It depends on the location and size of the business.
By carefully managing expenses and finding ways to save costs, it is possible to start a successful cloud kitchen business within this budget.