Start & Make Cloud Kitchen Profitable – 12 Experts Steps

Are cloud kitchens genuinely more profitable than traditional dine-in restaurants? While they may require lower upfront investments and eliminate front-of-house costs, cloud kitchens come with their own set of expenses, including delivery costs, online platform fees, and marketing expenditures. For example, delivery costs, website or app for recording orders, packaging. Besides, as you don’t have a physical location, you need to spend more on cloud kitchen marketing to build trust.

However, these facts shouldn’t make you feel worried. This quick guide is specifically dedicated to helping you make your cloud kitchen not only thrive but also significantly boost its profitability. Whether you just plan to open your cloud kitchen business or look for ways to increase revenue, keep on reading!

1. Recipe Perfection for Happy Bites

Imagine making a dish so tasty that people want it again and again. That’s why having fixed recipes is like having a magic wand for your kitchen.

Why Consistency Matters?

Imagine that you use 2 middle-sized tomatoes for 1 portion, another time you use 3 tomatoes for the same recipe. Similar one-time mistakes won’t force your business to close down, but in the long run, they will negatively impact your bottomline.

Pro Tip:

It’s not just about cooking; it’s about crafting an experience. Nail down exact quantities for every ingredient, turning your kitchen into a haven of culinary precision.

2. Make Things Easy with Automation

Hiring a team to handle calls and orders? How about a more efficient solution? Enter automation – your kitchen’s unsung hero.

Why Go Automated?

Hiring staff means dedicating a substantial chunk of revenue to salaries. Instead, embrace automation through a restaurant management system. For a few dollars monthly, watch tasks get done, and profits soar by up to 20%!

Tech Talk:

A management system isn’t just for show. It handles recipes, and calculates costs, A restaurant management system isn’t just a fancy gadget. It’s your kitchen wizard. From recipes to orders to inventory, it’s like having a kitchen assistant that never sleeps.

3. Rule the Online Food World

In today’s digital age, visibility is the name of the game. Getting listed on top online ordering platforms is your ticket to culinary stardom.

Why Platforms Matter?

Platforms like Grubhub, Zomato, and Swiggy not only build trust but also attract hungry users. Yes, there are fees involved, but the exposure garnered is worth every penny.

Trial Phase:

Invest a bit in marketing at the start. Being a cloud kitchen means you need to shine on these platforms to get those orders rolling in.

4. Don’t Waste, Taste: Smart Kitchen Habits

Waste not, want not – especially in the kitchen. Combat food waste with a strategy that not only benefits your bottom line but also contributes to a healthier planet.

The Green Approach:

Donate leftovers, take advantage of tax deductions, and reuse ingredients if they’re still viable. For a systematic approach, let your restaurant management software be your guide.

Data-Driven Wisdom:

Analyze popular recipes, track spoilage patterns, and tweak portion sizes with insights from your software. Transform your kitchen into a hub of sustainability and efficiency.

5. What’s the Buzz?

86% percent of millennials try a new restaurant after seeing food-related content online. Instagram is the place to be for food enthusiasts, and your cloud kitchen should shine there. Did you know 30% of users might skip a restaurant lacking a solid Instagram presence? Partnering with food bloggers can be your secret sauce!

The Plan:

Send a mouth-watering recipe to a food blogger. Let them share genuine reactions and feedback with their followers. Some may charge a fee, fixed or commission-based, plus a taste of your delivered delights.

Choose Wisely:

Not all bloggers are a perfect match. Advertising meat with a vegan blogger or promoting fast food to a weight-loss-focused audience won’t make the cut. Be strategic in your choices.

6. Menu Mastery: Regular Reviews for Success

Adapt or Lose:

As ingredient costs fluctuate and tastes change, your menu can’t stay static. Regular monthly menu reviews are your recipe for success. Identify the winners, losers, and hidden gems to plan for maximum profitability.

Key Moves:

Don’t keep your profit puzzle a secret. Reveal your most and least profitable dishes. This insight helps decide what to promote, tweak, or bid farewell to on your menu.

7. Launch your food blog on Instagram

If you think that running a website blog and writing 1-2 articles weekly is expensive, move to Instagram! We already mentioned that food-related content is extremely popular on this platform. Besides, people are so busy now that they will prefer to read a quick and useful post on Instagram than a long-form detailed guide on a blog.

The Game Plan:

Posting regularly about your ingredients, talking about their benefits to health, and even sharing recipes will help you quickly build a loyal and targeted following. Users won’t easily follow a page that only publishes its menu and pricing, without giving anything first.

Every post is an opportunity to feature your service, but you shouldn’t do it 7 days a week. Focus on sharing knowledge and professional facts about food and then naturally talk about your services. In the long run, this will allow you to build awareness, following, show your expertise, and turn them into profits.

8. Real-Life Connections: Events and Expos

As offline life is again back, events and expos can become part of your cloud kitchen marketing strategy. Find the most popular food expos in your city and research their terms. Booking a booth will cost you money, but usually, you get discounts if you pre-order it.

Remember that the expo will combine food lovers under the same roof and it’s in your hands to stand out from your competitors. Communicate with the guests in real life, offer them to try your recipes, and make their experience memorable. Many of the expo guests will become your customers and increase your profit.

9. The Penetration Pricing Strategy

Penetration pricing is a strategy for businesses who plan to enter a competitive market. So if you are still new and your brand awareness isn’t high, you can implement this approach for a few months.

Cautious Steps:

The aim of this strategy is to offer lower prices than your competitors to attract people and increase brand awareness. For a few months, you may have very low or no profit, but you can build a base of satisfied customers and then increase your prices.

Be careful – customers might not return if prices shoot up later. Strategic planning is key to mastering penetration pricing.

10. Profit Booster: Cut Costs Without Raising Prices

If you want to make more profit without increasing the prices, you should lower your cost price. You can do it by reviewing your portion sizes or substituting the ingredients without changing the taste.

Smart Choices:

Look for new suppliers and negotiate the costs with them. Choose a supplier who offers the most competitive price for the best quality and use their services. Occasionally review your list of partners to find the best deals in the market. The same approach is applicable for ordering packaging.

Last but not least, lowering your marketing spend will also help you reduce your cost price. For example, organic marketing is typically less expensive than paid marketing. When it comes to paid advertising, Facebook ads tend to be cheaper than Google ads.

However, no organic or paid method will work if your product isn’t satisfying and customers don’t fall in love with the experience. Give your customers something to talk about, exceed their expectations and word of mouth will be the cheapest and most effective way of marketing.

11. Automate staff onboarding

Onboarding new team members is time and energy consuming. To avoid that monotone and expensive task, you can turn your policy and procedures into easy-to-understand guides and videos.

Of course, creating onboarding resources won’t be free, but once done, you can use it every time a new member joins your team. You will spend your valuable time on growing your business and researching new opportunities while new members get trained on their own.

12. Become a host kitchen

Host kitchens exploded in popularity during the pandemic when the physical locations of restaurants were closed.

The essence is inviting other cloud kitchens to your space and allowing them to prepare and sell their food.  So if you have extra space and an existing infrastructure that you don’t use, why not generate additional revenue? 

Final thoughts

Considering the changes that the pandemic brought in 2020, cloud kitchens are a safe and popular way to run your business. Buyers got used to staying at home, eating the ordered food at home and cloud kitchens have a big role to play in their lives.

Use these cloud kitchen ideas or strategies to better market your services and sustainably grow your revenue. If you need investment to expand your business more efficiently, you can connect with IndiaBiz.

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