February 08, 2023

How to Start a Cloud Kitchen in Singapore: All You Need to Know

CloudKitchen® delivery kitchens have risen to prominence across the world as they offer a more affordable alternative to traditional restaurants. They are also being utilised by newcomers to the F&B industry that don’t want to fork out a substantial investment right off the bat, or veteran restaurateurs that want to test the waters in a new market. 

If you are seriously thinking of venturing down this path, here are a few things you need to know in regard to how to start a cloud kitchen in Singapore.  

What is the concept behind cloud kitchens?

Many traditional restaurant owners may be confused about the meaning and idea behind cloud kitchens, as they are a distinct concept from conventional dine-in restaurants. Also known as virtual kitchens or dark kitchens, cloud kitchens are specifically designed to be optimised for delivery or takeaway orders. The concept of a cloud kitchen eliminates the high costs associated with rent and labour, allowing for increased profitability. 

Learning the following traits can help you identify a cloud kitchen and gain a better understanding of its meaning:

Operating without a physical storefront

Cloud kitchens primarily focus on delivery services as their main offering. As a result, these kitchens do not provide a physical dining space or a storefront. Their purpose is to cater to the growing demand for convenient and efficient food delivery, which is at the core of their meaning.

Ability to run multiple brands

Using a single shared kitchen space and facilities, the cloud kitchen is able to run multiple brands and menus. This unique concept and approach increases efficiency and flexibility in meeting diverse customer preferences. 

Reduced Overhead Expenses

Restaurants running on cloud kitchens generally benefit from lower investment and overhead costs when compared to traditional dining establishments. This is because they eliminate the need for expensive rental spaces, significant capital investments, and front-of-house staff.

How do cloud kitchens work?

Cloud kitchens operate with a delivery-focused approach, meaning they eliminate the need for a physical dine-in area and storefront. Through leveraging online platforms, delivery apps, and order management technology, they receive orders and deliver food to customers directly in a streamlined manner, adapting to ever-changing consumer behaviour. Their streamlined operations and flexible model meet the increasing demand for food delivery, making it a cost-effective solution and innovative concept in the F&B industry.

Why opening a cloud kitchen is a good idea

There are plenty of benefits associated with launching a CloudKitchen® delivery kitchen. Here are a few of the major advantages: 

Reduced costs

From employees to rent and equipment, the costs of opening and running a CloudKitchen® delivery kitchen don’t come close to that of brick-and-mortar restaurants. In Singapore, the approximate investment needed to launch a cloud kitchen is approximately S$10,000. For normal eateries, it’s around the S$200,000 mark. 

Get started almost immediately 

Since most CloudKitchen® delivery kitchens providers have kitchen spaces that are virtually ready, all the restaurants moving in need to do is get their equipment in place and implement any small changes that need to be made. Due to this, they are able to open their doors in 2-4 weeks, while normal dine-in restaurants require approximately 24 weeks before they can start serving customers. 

Everything revolves around food

Businesses running from a cloud kitchen can focus all their attention on making sure their food is of the highest standards. While traditional eateries also pay attention to this, there are many other areas that require their attention, including the well-being of their customers and ensuring their staff are doing a good job. 

Key Steps for Opening a Cloud Kitchen Business

If you do decide to embark on a cloud kitchen venture, there are a few important steps you must follow to ensure a successful launch. 

1. Craft a captivating and distinctive concept

Every business venture starts with a thought or a unique and compelling concept that gives your cloud kitchen a distinct meaning. Consider what available resources and investment capabilities you possess, and your target audience to decide on your unique cloud kitchen model. 

2. Choose the ideal kitchen partner

Next, you have to choose a cloud kitchen provider that aligns with your goals and concept. Assess their track record, range of services, technological capabilities, and geographic coverage, as these aspects significantly impact your operations. In Singapore, renowned commercial kitchen partners like Smart City Kitchens, TiffinLabs, and Deliveroo can help pave the way for future success with your restaurant business.

3. Select the best strategic location 

Location is everything when it comes to opening a delivery-only kitchen, as you have to conduct a lot of research prior to pinpointing the area in which you feel your business would be most profitable. Take a look at what kind of food is lacking in that particular district and ask yourself if your restaurant will offer something unique that is on people’s wish lists instead of just being another name in a sea of similar eateries. Based on this, you can decide the best location for you. 

4. Meet the legal obligations

Prior to your launch, invest time and effort into completing all necessary preliminary tasks to avoid potential legal issues. This includes obtaining relevant certifications, registering your business, securing appropriate insurance coverage, and ensuring compliance with local health and safety regulations.

5. Establish a robust technological framework

Invest in a dependable technological infrastructure to support smooth online ordering and efficient order management systems. Give priority to in-house delivery services to maintain control over customer experience, data, and profits.

6. Create a menu and build a kitchen staff team with delivery in mind

Craft a delivery-oriented menu that reflects customer preferences and showcases your unique culinary concept and specialties. It’s essential to recruit a talented kitchen team experienced in effective food preparation and delivery processes to consistently provide excellent food and ensure timely, satisfying service for your customers.

Things to consider when starting a cloud kitchen

Upon familiarising yourself with the concept of cloud kitchens and the basic steps of launching it, it’s time to delve into the more detailed aspects that require careful consideration. Key factors such as brand image, online presence, and staying on top of operations can impact the success and profitability of your cloud kitchen business.

It’s all about brand image

With CloudKitchen® delivery kitchens being completely online-driven, restaurants have to ensure their brand image and online personas are nothing short of perfect. How exactly is this done when you are just at the starting point of your journey to opening a CloudKitchen® delivery kitchen? Well, it comes down to two major factors: 

  • Logo – This is the defining image of your restaurant. People may start to know you simply based on this, so it is vital that your logo sticks with people and is easily recognisable. Think of KFC or McDonald’s, for example; the minute you hear the name, you can picture the logo in your head. This is exactly what you want to achieve for your restaurant, as it will be used across a wide spectrum – from your packaging to social media and delivery apps. 
  • Packaging – Your packaging also needs to be attention-grabbing as you want customers to take photos of it and post it to their social media accounts. This way, more people will get to know about your restaurant and want to try out what food you’re serving up. 

Spread the good word

Since CloudKitchen® delivery kitchens have a business model that fully revolves around the online world, they need to find various ways to connect to people across multiple avenues. To do this effectively, they need to pay close attention to the following: 

  • Social media – Virtually everybody uses some form of social media in the world today, so restaurants utilising this to their advantage should come as no surprise. It is recommended that they be active across multiple platforms, such as Facebook, Instagram, TikTok, etc. When posting content, don’t just focus on the same thing over and over again. Instead, inject some diversity and provide a deeper look into your backstory, the employees you hire, the food you make, and any special events or promotions that are going to be held. If you sprinkle some creativity into your content, expect to see a consistent stream of people checking out what you post and ordering from your restaurant. 
  • Partner with influencers – Given the massive fan following these guys have, it’s a no-brainer for restaurants to reach out and partner with them. One of the best ways to get people to know about you and your business is to have influencers share what they ordered from your eatery and do a food review. Furthermore, you can centre a promotion or discount around them in order to get a boost in orders.  
  • Well-maintained website – Having a website that delves into all aspects of your business is incredibly important as it allows you to connect with your customers on a more personal level. Make sure there is a dedicated section for an online menu so people can see what type of cuisine you specialise in, an about us page that touches on the history of the restaurant, and a blog section that offers captivating content about the F&B world. 
  • Weekly/Bi-weekly/Monthly newsletters – You may be wondering whether people still read newsletters in this day and age. Many still do, which is why it is worth investing some marketing effort into this avenue. Be sure to include anything and everything that you want to make some noise about. Whether it’s new menu items or promotions, all of them should take centre stage in your newsletter. 
  • Reviews – So many people look at the online reviews left by other customers before they decide to order food from a restaurant. Regardless of whether it’s on Yelp or social media, having positive reviews about your food is a guaranteed recipe for success. One bit of advice to heed is that you should always reply back to any review left, even if it’s negative, as it shows people that you care about your customers. 

Stay on top of everything

Since your business’s reputation is everything, you have to ensure it is well protected. In order to achieve this, there are a couple of steps that need to be taken, such as: 

  • Keeping your menu up to date – If you add new items, make sure this change is implemented across all platforms where people can view your menu. Furthermore, if a specific dish is out of stock or no longer available, you should provide an update so that your customers know about it. 
  • Providing proper waiting times – Customers do want their food as soon as possible when placing their orders. However, the last thing you, as a restaurant, want to do is lie about how long it will take to deliver their grub to them. If you ever venture down this path, you’re headed for absolute disaster! 
  • Using the latest technology – If you want to know how to keep track of all orders coming through when starting a CloudKitchen® delivery kitchen, many providers like Smart City Kitchens offer up-to-date technology that allows restaurants to see all orders on one tablet, even if they have partnered up with numerous food delivery companies. 

The number of staff

When you start a CloudKitchen® delivery kitchen venture, one of the outstanding questions many restaurateurs have is knowing how many employees are needed to fulfil all the orders that may potentially come through. You can start small and grow your team accordingly. What can be said is that your staff costs will be nowhere near that of a traditional restaurant as you won’t have any need for waiters, bartenders, general managers, etc. 

Interested in opening a cloud kitchen?

Now that you are armed with all the information needed to start a CloudKitchen® delivery kitchen, you can weigh up the pros and cons before deciding if this is the right venture for your F&B business. 

If you are intrigued by the prospect of launching your very own cloud kitchen in Singapore, please complete the form or reach out to us.  

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