November 14, 2022

How Much Does It Cost to Open CloudKitchens® In India?

India has always had a lucrative F&B sector, but a noticeable change has been occurring over the past few years, which has been fuelled by the global pandemic. CloudKitchens® delivery kitchens have risen in prominence throughout the country and an increasing number of restaurant owners, both new and industry veterans, have embraced the revolution with open arms as they seek new and innovative ways to navigate their businesses through these unprecedented times. 

With demand rising for CloudKitchens® delivery kitchens, we, at KitchenPlus have crafted a simple guide on the costs you have to be aware of when opening one up in India. 

The main costs your CloudKitchens® delivery kitchen will incur

Just like other businesses, there are multiple costs you will have to bear when launching a CloudKitchens® delivery kitchen. It’s part of the territory and is something you need to be on top of when creating your business plan as it will give you a solid idea of how much money you will need to get started. 

  1. Kitchen size
  2. Kitchen equipment
  3. Staff salary
  4. Marketing costs
  5. POS system and other technologies
  6. Ingredients
  7. Insurance
  8. Licences and permits

1. How big do you need your kitchen to be?

Before moving into a kitchen unit, you need to assess your business’s needs and determine whether a small, medium or large space will be required to fulfil your orders. It is also necessary to decide whether you want to do this on your own or go through one of the many CloudKitchens® delivery kitchen suppliers like KitchenPlus. 

For newcomers in the industry, it is recommended that they pick the latter option as our facilities are situated in some of India’s most renowned cities, including Mumbai, Delhi and Bengaluru. With plenty of orders coming through every day, there is a great chance to tap into the lucrative market and skyrocket your profits. But, before settling on which CloudKitchens® delivery kitchen best suits your needs, it is important to do your research on the area and assess whether there is high demand for the cuisine you serve. 

When choosing the size of the CloudKitchens® delivery kitchen you want to work out of, you should factor in the costs that come with renting that space. Our kitchens in India are approximately 150 square feet in size and require an investment of INR 10 lakhs. This is significantly cheaper than traditional restaurants, which are generally 2,000 square feet in size and cost about INR 2.5 crore to open. 

2. Kitchen equipment

One of the key costs to keep in mind when opening a CloudKitchens® delivery kitchen is the equipment you will need to prepare your food. While our facilities come with the basic necessities, you will have to decide what other apparatus is needed to ensure your business can function properly. When doing this, be sure to think about pots, pans, fridges, freezers and other specialist equipment that might be needed based on the type of cuisine you specialise in. When purchasing kitchen equipment, it is advisable to have a strict budget so that you abide by it and don’t fall into the common trap of spending way too much money. 

In addition to your equipment, you will also need to keep a close eye on the utilities, such as gas, electricity, water, etc. On top of this, you will require a tablet to track all delivery orders that come in. Our app allows you to clearly view all orders, even if your business works with multiple food delivery platforms. 

3. Staff costs

You will need to hire staff to cook the food you send out to your customers. But, how many chefs are needed depends on the number of orders you get on a daily basis. In our CloudKitchens® delivery kitchens, eateries usually have 4 to 5 people, which means the staff costs will be nowhere near that of restaurants as they usually have a team consisting of 25 to 35 people. Simply put, when starting off in a CloudKitchens® delivery kitchen, you only need a couple of employees, but as your business grows, you can start expanding your workforce. 

4. Marketing costs

This is a cost many restaurateurs forget about when opening a CloudKitchens® delivery kitchen. Marketing is a crucial aspect of any business, including eateries, as people need to know who you are and why they should order from you. In order to connect to a wider audience and bring in more orders, you can consider allocating some funds to the following marketing channels. 

Logo – This is something you can opt to design on your own or through a company or freelancer. Essentially, your logo needs to capture the essence of your brand and be instantly recognisable. 

Website – All food businesses have a proper website that is easy to navigate and tells people who they are and what they’re about. When creating your website, be sure to have an online menu, a story about how your establishment started and contact information so people can get in touch with you. If you are new to the website game, consider using WordPress or Wix as they are the most beginner-friendly. We also recommend purchasing a domain name so that your URL looks professional. 

Social media accounts – It’s free to open social media accounts across the most popular platforms. However, you might want to spend some money on boosting certain posts or on ads that get your business’s name out to a wider customer base. 

Photography – You may think that you can do this on your own, but it’s recommended that you seek the help of a professional photographer. Since your photos can influence people’s decision to order from your restaurant, it’s worth paying someone who knows what they’re doing. 

Digital advertising – Whether you advertise through search engines like Google or on India’s top food delivery apps, such as Zomato or Swiggy, you will need to add this cost to the list when opening a CloudKitchens® delivery kitchen.

5. POS system and other technology

It is imperative to have a proper POS system and food technology in your CloudKitchens® delivery kitchen, so when it comes to the costs associated with this, you really don’t want to be a penny-pincher. At KitchenPlus, our kitchens come with top-quality food technology software that gives you all the information you need to know about your business. From managing orders to creating in-depth reports and learning about the top-selling dishes, our technology can do it all. 

6. What ingredients are necessary?

Top-notch ingredients are needed to create food that will win your customers over and keep them coming back for more. Since it’s easy to go overboard when spending on ingredients, you should have a budget in order to know your costs and make as much profit as possible from every dish. It’s also useful to have an idea of your customers’ habits to ensure you don’t order an excessive quantity of any ingredient. 

7. Insurance requirements

All businesses need insurance to comply with the law, so this is a cost your CloudKitchens® delivery kitchen cannot avoid. You will likely need employer insurance and public liability insurance, which will cover you in instances such as employee mishaps, workplace accidents and legal action taken against you by customers who get sick after eating your food. At KitchenPlus, the pricing of spaces in all our facilities includes insurance, so that restaurants don’t have to be concerned about being uninsured in the event that the unexpected happens. 

8. Licences and permits

Like insurance, your CloudKitchens® delivery kitchen needs to have the necessary licences to operate, meaning this is another unavoidable cost. Make sure you research which permits you need so that you don’t get into any legal trouble or have your kitchen shut down. If you still have questions, our blog will provide you with the answers you need. 

Additional expenses

1. A solid marketing strategy

When your restaurant begins to grow in stature, you will need to have a marketing plan ready to ensure you can keep reaching out to a larger audience. To accomplish this, it is recommended that you do the following: 

  • Have a social media plan in place
  • Join forces with influencers
  • Develop a loyalty program
  • Reward customers for referrals
  • Launch promotions and discounts
  • Targeted ads

2. Data analysis

Using data analysis can help you develop a deeper understanding of your customers as you can identify their pain points and ascertain why they are choosing other eateries instead of yours. The process to achieve this can cost a lot, but it will be beneficial to your CloudKitchens® delivery kitchen in the long run. That being said, you need to decide how big of a priority it is for your business, especially if you are just in the infancy stages. 

With data analysis, you can gain a lot of valuable information, including:

  • The ordering habits of your patrons 
  • What type of ad campaigns deliver the most successful results
  • Which items on your menu are proving to be a hit with the customers

Begin your CloudKitchens® delivery kitchen journey today

kitchenplus-cloud-kitchen-facility--order-collection-staff-locker-pick-up

One of the key takeaways from this guide is the fact that the costs attributed to opening a CloudKitchens® delivery kitchen are much less than brick-and-mortar establishments. In addition to this, you can break even in around 6 weeks, while regular restaurants in India will usually hit that mark in 48 weeks. Given all this, it’s clear to see why CloudKitchens® delivery kitchens are becoming one of the new go-to business models for eateries all over India. 

Want to open your very own CloudKitchens® delivery kitchen? Fill in the form below to get it touch!


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