2023 Cloud Kitchen Project Report

CLOUD KITCHEN
[DOOR-STEP FOOD & BEVERAGE DELIVERY SERVICE]
PROJECT REPORT/BUSINESS PLAN

SUBMITTED BY
Cloud Kitchen Project Report
PROJECT AT A GLANCE
Sl. Particulars Description

No.
1. Name of the Entrepreneur
2. Constitution (Legal Status)
3. Father‟s/ Spouse‟s Name
4. Unit Address
Taluk/ Block: __________________________________
District: __________________________________
PIN: __________________________________
E-Mail: __________________________________
Mobile: __________________________________
5. Name of the Project/
Business activity proposed
Product and By Product
6. Cost of Project
Work-Shed
Machinery & Equipment‟s
Miscellaneous Fixed Assets
Preliminary & Pre-operative
Expenses
Contingency & Escalation
Total Capital Expenditure
Working Capital
7. Means of Finance
Term Loan
Margin Money Subsidy
Own Capital
8. Debt Service Coverage Ratio
9. Pay Back Period
10. Project Implementation

Period
11. Break Even Point
12. Employment
13. Power Requirement
14. Major Raw Materials
15. Estimated Annual Sales
Turnover
I hereby certify that the above statements are true and correct to the best of my knowledge.
Date: Signature of the Applicant

CONTENTS Page
No.
PROJECT REPORT 1-22
ANNEXURES CONTENT Page

No.
ANNEXURE-I STATUTORY PERMITS AND BUSINESS LICENSES 23-24

REQUIRED FOR CLOUD KITCHEN BUSINESS
ANNEXURE-II BASICS OF CLOUD KITCHEN BUSINESS 25-30
ANNEXURE-III BEGINNER’S GUIDE TO START CLOUD KITCHEN 31-35

BUSINESS
ANNEXURE-IV SMART TIPS TO FOLLOW FOR SUCCESSFUL CLOUD 36-39

KITCHEN BUSINESS
ANNEXURE-V PROVEN TIPS TO BOOST THE SALE OF CLOUD 40-41

KITCHEN BUSINESS
ANNEXURE-VI CLOUD KITCHEN PROMOTIONAL IDEAS DURING 42-43

COVID TIMES
HIGHLIGHTS OF THE PROJECT
Sl. Particulars Description

No.
A. Nature of the Project
1. Name of the Project/ Business CLOUD KITCHEN PROJECT
activity proposed (DOOR-STEP FOOD & BEVERAGE DELIVERY
SERVICE)
2. Year-wise Capacity Utilisation Yr 01 Yr 02 Yr 03 Yr 04 Yr 05
50% 60% 70% 70% 70%
B. Cost of Project
1. Land/Commercial Space Own Space/ On Lease
2. Civil Works & Buildings Rs. 35,000.00
3. Equipment's & Fixture's Rs. 2,38,000.00
4. Fixed Assets Rs. 82,000.00
5. Preliminary & Pre-operative Rs. 1,02,000.00
Expenses
6. Contingencies & Escalation @ 5% Rs. 18,000.00
Total Capital Expenditure Rs. 4,75,000.00
7. Working Capital Margin @25% Rs. 25,000.00
Total Rs. 5,00,000.00
C. Means of Finance
1. Term Loan from Bank @ 75% Rs.3,75,000.00
2. Own Capital including Margin Rs.1,25,000.00
Money Subsidy @ 25%
Total Rs. 5,00,000.00
D. Working Capital Loan/ Cash Credit (CC)
1. WCL/CC on First Year Rs. 75,000.00

2. WCL/CC on Second Year Rs. 86,000.00
3. WCL/CC from Third Year Onwards Rs. 96,000.00
Page | 1
1. GENERAL INFORMATION AND LOCATION :
Name of the Unit/

Firm
Address of the
Project/Proposed
Location
Size of the Space

Available
Own/ Under
Lease Rent
Agreement
2. PROMOTER’S BACKGROUND :
Name of the
Promoter
Age
Communication
Address
Educational
Qualification
Work Experience
Special Training
Attended, If Any
Page | 2
3. PROJECT INTRODUCTION :
Cloud kitchens which are also known as Dark kitchens, Ghost kitchens, Shared
kitchens, Shadow kitchens or Restaurant-as-a-Service (RAAS) are kitchens refers
to a place where food is prepared and delivered at door steps by taking orders
through website, via calls or via third-party food delivery aggregator apps such
as Uber Eats, Swiggy and Zomato. Cloud Kitchen acts like a virtual kitchen
premises that has no physical existence for dining but offers the same services as a
regular kitchen would do. This service is of massive help especially for the elders
and the ones unable to cook in times of such global pandemic like the COVID 19.
Cloud kitchens involve low costs and high profit. Cloud kitchens are much cheaper to
set up than brick-and-mortar restaurants as there‟s no need for them to be in prime
locations, no need for attractive designs, no need for seating space and no need for
staffs such as servers, cashiers, attendants and bartenders since the cloud kitchen
provider typically offers shared labour support such as cleaning and security
personnel only.
The concept of cloud kitchens has boomed in the recent past and is expected to be a
multi-billion dollar industry in the near future.Cloud Kitchens seem like a smarter way
to manage high rentals and reduced margins. Due to this reason, many restaurants
are trying to venture into the online delivery-only space. Therefore, setting up of
cloud kitchens would be a safer choice for new entrepreneurs looking to set foot in
this industry.
4. THE PROJECT PROPOSAL :
The proposed project is that of setting up of a Cloud Kitchen at the proposed

location. The business will be operated on order and delivery-only model having an
online presence that would work through own website or apps and through food
aggregator apps such as Swiggy, Zomato, Foodpanda and Ubereats etc. or through
both. A Point of Sale (POS) system will be in place that would accept orders from
various channels, such as delivery aggregators and online ordering platforms since a
cloud kitchen requires an integrated technology system for accepting online orders,
processing payments and efficient kitchen management. In view of the potential
market opportunity of such food delivery services, the present Project Report has
been developed with the main objective to enable convenience and supply of quality
food items to customers throughout the year. The key features of the Proposed
Project are as follows;
 Preparation of Food Items and

 Delivery Service through Online Platforms.
The Project envisages arranging Cloud Kitchen Services as per market demand
and the envisioned percentage of proposed product mix is as follows;
Products Percentage
Fat-food Items 40%
Vegetarian Dishes 30%
Non-Vegetarian Dishes 30%
Page | 3
5. THE PRODUCTS :
The Products (Food & Beverage Items) offerings will be finalised and updated from
time to time based on the prevailing market-demand in the surrounding areas of the
proposed location.
6. PROSPECT FOR INVESTMENT :
The Food & Beverage retailing pattern has changed drastically over the past
decade especially with the emergence of the online delivery model. It provides
consumers with immense choice and convenience. Nowadays, people seem to have
shied away from the traditional dining out experience. The customers now prefer to
stay at home and enjoy their food rather than venturing into long hours in traffic or
spending time eating in restaurants with long waiting periods. Especially due to onset
of the COVID 19 pandemic, the trend has witnessed a spike with the growing
preference for home delivered food with best safety standards. Since, the restaurant
industry is one of those most devastated business sector by COVID-19, which led to
the rise of a viable concept that helped masses enjoy restaurant -like food at
home and made it less-stressful for food-entrepreneurs. The concept is called
Cloud Kitchen and are becoming more relevant to survive in the F&B industry.
The concept of cloud kitchens is not new today as an idea, but it has developed in
multitude of varied models that complement the growth of e-commerce and the new
age idea of a restaurant. Supported by the growth of internet, myriad of applications
and the emergence of online food aggregators online food ordering has become the
new normal with a never-ending demand for quick, hygienic and good quality food
wherein the customers can order food with the push of a button from the comforts of
their home. Such a growth in the industry has led to innovative and new models of
restaurants that act as catalysts in this rapid increase in demand for online food. The
sudden increase in demand for restaurant home delivery services has created a
massive opportunity for food delivery startups to increase market share. With food
aggregators coming into the picture, more restaurants have entered the food delivery
segment.
Online ordering is a convenient and quick option for many people, the most cost-
saving and safest way to offer food in present times. Since the cloud kitchen
business still has a huge untapped potential, this might be the best time for one to
invest in a cloud kitchen business model. With minimum risks involved, it is one of
the safest bids, if somebody is planning to invest in the food industry. And even if
someone is running a profitable restaurant, investing in a cloud kitchen would require
less investment compared to the classic dine-in restaurant and would add more
profits at a lower cost.
7. POTENTIAL TARGET CUSTOMERS/MARKET :
The primary target market for the proposed Cloud Kitchen would be the entire
neighbourhood of the proposed location and the online customers of neighbouring
area within five to ten kilometres of reach.
Page | 4
8. MARKET ENTRY AND MARKETING STRATEGY :
8.1. Market Entry : India has over a billion mouths to feed and this means
that food & beverage business has a less or no chance of having a bad time
because unlike everything else, people will not stop eating. Therefore, the proposed
business can be started at any time of the year.
8.2. Marketing Strategy : Since Cloud Kitchens have no such physical

outlet, the marketing needs of a cloud kitchen are very different from those of a
regular restaurant. Since there is no outlet where the customers can just walk-in, a
cloud kitchen permanently loses out on visibility. To compensate for this, following
powerful marketing and branding strategy has been planned. Marketing plan of the
proposed project would include the following measures;
 Online Presence : This will give the business a virtual address and enable
customers to find with ease. Having a website and different social media
pages will not be enough. Steps will be taken to update them regularly and
make them as interactive as possible, as that is the only medium through
which customers can reach out to the business facility. Arrangement will be
made in order to listen to customers, talk, participate in comments and
address any negative feedback then and there.
 Third-Party Integrations : Most people today order using online apps like
Zomato, Swiggy, Ubereats and Foodpanda etc. Integration with them is a
must. Being on these platforms will get more orders for door-step delivery and
because they have their delivery mechanism, the cost of delivery will not be
out of our pocket. Apart from that, being on these platforms will also make the
business discoverable to our potential customers. Most people who order
through these apps do not know whether they are ordering food from a
restaurant, a delivery-only kitchen, a ghost kitchen or a cloud kitchen. What
they do know is that if the food looks good, they can try a new place, so
getting integrated with all the delivery platforms out there would help enjoy
large-scale discoverability.
 Promotion : A considerable amount of orders come to a cloud kitchen

through regular calls. To promote this channel of ordering and creating an
identity among people who do not belong to the internet generation, flyer and
pamphlet marketing is the way to go. Accordingly, flyer and pamphlet would
be distributed as Families mostly preserve these flyers and use them when
they plan to place order next time.
 Influencer Marketing : Under this, the project would get in contact with
influential personalities like chefs, food bloggers to market our Cloud Kitchen.
 Reward & Loyalty Programs : The project proposes to reward the loyal
customers through loyalty programs and give them an extra bonus when they
place an order next time. This is also called customer relationship
management. From the moment a customer has ordered their first meal,
information like their email address and/or phone number etc. will be in the
record. These channels would be utilised to let the customers know about a
new menu, a holiday offer or any other news that will be of interest to them.
Page | 5
9. CRITICAL SUCCESS FACTORS :
Successful and sustainable operation of this Cloud Kitchen business would depend
on the following main critical factors:
 Saving on Infrastructure Cost.

 Reduction in Service Time.
 More Contextual Customer Data.
 Flexibility in Menu.
 Healthy Food and Suitable Packaging
 Competitive Pricing.
 Better Expansion Opportunities.
The Promoter is technically well-informed to undertake the proposed venture and

expected to run the business unit efficiently.
10. PROCESS DETAILS AND TECHNICAL SOLUTIONS :
10.1. PROCESS DETAILS : Orders collected in a cloud kitchen are processed like
standard orders. The only difference lies in the fact that each order can belong to a
different brand and so the unique taste of each one needs to be maintained. To
solve this, there would be different chefs catering to various brands or different
kitchen areas designated to the team of different brands under the same chef. POS
with a Kitchen Display System will be helpful as it will display orders directly in the
kitchen on a screen. As soon as the order is accepted, it lands on the Kitchen
Display System in the kitchen, allowing staffs to view the order details. Once the
order is prepared by the chef, he can mark it as „done‟ on the Kitchen Display
System and send it for packaging. The packaging staff then packs the order and
sends it to the Delivery Station. Each stage of order acceptance, preparation,
packaging and delivery is recorded by the POS. This would help in analyzing and
optimizing the order-preparation time too. One can track any delays that happen at
any given stage and take steps to reduce the lags.
The process flowchart of a Cloud Kitchen is as follows;
Step 1. Orders are received from the Customers.
Step 2. Kitchen-In-Charge notes down the Order details.
Step 3. Food is prepared as per the Orders and Instructions.
Step 4. Effective and accurate Packaging is done for the Food prepared.
Step 5. Finally, Packed Food Parcel is delivered to the doorstep of Customers.
Page | 6
10.2. TECHNICAL SOLUTIONS : Some of the technical solutions for Cloud Kitchen
are as follows;
10.2.1. Managing Inventory : Managing the inventory in a Cloud Kitchen

is thought to be the most complicated task of running a cloud kitchen. That is not
entirely true. Yes, having multiple brands under the same roof can make managing
inventory a little tedious, but by developing a system of checks and numbers, one
can handle it without much problem.While finalizing suppliers for a cloud kitchen, it is
not too different from a regular commercial restaurant kitchen. One must still look for
a combination that appears the best solution. If the brands have the same base
ingredient but some different ingredients, one can order the base ingredient from the
same supplier and the various ingredients from different suppliers. The project would
make a list of all the ingredients those would be required across brands and try to
order as many as possible from the same supplier. It will make it easier to keep track
of inventory and will be able to hold a single person accountable, in case of changes
it would be far easier to coordinate.
10.2.2. POS Solution : A POS solution with the bar-coding system will
help to improve stock management, control and financial reporting. Some hardware
would be required to manage the operations faster and give a better customer
satisfaction. A smart POS system allows to manage the stock and inventory
requirements of multiple brands with ease. One will be able to view and manage the
daily stock consumption and requirements of each brand from a single dashboard.
Based on the requirements, one can raise Purchase Orders for the stock items for
each brand and manage the purchase with ease.
10.2.3. Fresh Quality/Timely Delivery : Delivery system needs to be quick,

since primarily the business would be dealing with online customers who prefer
convenience & quickness over price. To attract more customers, it is essential to
ensure the freshness & quality of the food products, which can only be achieved by
implementing an efficient delivery network in all target markets.
11. INSTALLED AND OPERATIONAL CAPACITY :
The operational capacity of the proposed Cloud Kitchen Business at 100% capacity
utilisation is as follows;
Sale of Packed Food Parcel - 50 Customers Per Day
For the purpose of carrying out this economic viability of the proposed project, it is
assumed that the proposed Cloud Kitchen will operate at following efficiencies
(Capacity Utilisation) during the first 5 (Five) Years.
Year Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Capacity 50% 60% 70% 70% 70%
Utilization
Page | 7
12. QUALITY AND STANDARDS :
12.1. FSSAI LICENSE: Food Safety and Standards Association of India (FSSAI) is
the authority that grants license for food related businesses in India and an
FSSAI license is mandatory for the effective operation of a Cloud Kitchen.
The FSSAI is responsible for protecting and promoting public health through
the regulation and supervision of food safety and is a mandatory registration/
licence for business entities that engage in food and related activities. The
license can be obtained for a period of one to five years depending on the
necessity and is subject to renewal post expiration. The FSSAI
registration/certification has to be mentioned on the packaging and the invoice
generated. In this emerging market, a mindful customer will definitely
appreciate this certification as it will help in building the confidence of the
customer in the brand.
12.2. DELIGHTFUL CUSTOMER SERVICE: Cloud kitchen can deliver exceptional

service by taking care of basic essentials while delivering orders. It is
expected to Implement proper packaging procedures and seal the containers
properly while delivering orders in order to maintain the temperature of food
items. Delivery executives would be equipped with insulated food bags that
maintain the temperature of hot and cold food items while controlling the
moisture. It is also recommended to give due attention to minute customer
order-related requests. If any customer has added a note to prepare the dish
with less salt or spices or requested extra tableware, condiments, add-ons,
etc., ensure to address the special order requests of the customers. Taking
these measures will create a positive impression of the brand on customers‟
minds and elevate their entire food delivery experience.
12.3. ENERGY CONSERVATION: Proper care should be taken in running the

equipment to avoid over run and high electricity consumption. Natural
ventilation in Kitchen premises may be considered to avoid use of electrical
power during day hours.
13. RAW MATERIALS AND CONSUMABLES :
13.1. The major consumables required are as follows;
1. Inventory Stock (Food & Beverages) and

2. Containers, Parcel Wrappers and Packaging Materials
Above Consumables are easily available locally.
14. POWER AND UTILITY :
14.1. POWER: The total connected load requirement of power is 5.92 KW for the
Project. The total Power supply would be distributed in the following way;
Kitchen Equipment‟s - 5.22 KW
General Lighting - 0.70 KW
Page | 8
14.2. UTILITY: Water would be necessary for washing, cooking and drinking
purpose. Other utilities include Gas Cylinder, Fuel etc. for delivery vehicles
(Two Wheelers) which is locally available.
15. TENTATIVE IMPLEMENTATION SCHEDULE :
The period of implementation of the Business will depend on the time taken for the
sanction of financial assistance if applicable and the subsequent period of delivery of
the Kitchen equipment‟s from the respective suppliers. The delivery period of the
equipment‟s would be 15 days to 30 days from the date of placement of firm order.
Some of the project activities shall be carried out concurrently. Based on the above
assumptions, the major activities under the tentative implementation schedule are as
follows:
ACTIVITIES TIME PERIOD
Repairing Work/ Arrangement of Finance

Statutory Permits and Business Licenses Half Month – One Month
Placement of Order for Equipment‟s,

Procurement, Inspection, Equipment Layout,
Utilities and Specifications, Expediting Services Half Month – One Month
And Other Basic Information
Recruitment of Manpower and One Month
Training of Workers
Inauguration and Commercial Operation 2nd Month
st nd
Sl. Activities/Time 1 Month 2 Month
No. (In Months)
1. Selection of Location and Acquisition
of Premises
2. Civil Work/ Repairing Work, Power
Connection and Electrification
3. Application and Arrangement of
Finance, Application and Obtain
Statutory Permits and Business
Licenses
4. Placement of Order for Equipment‟s
and Fixture‟s
5. Inspection, Procurement, Lay out &
Expediting Services of Equipment‟s
6. Recruitment of Manpower and
Training
7. Inauguration and Commercial
Operation
Page | 9
16. BASIS & PRESUMPTIONS :
While deriving figures and projections in this Project Report, following Basis and
Presumptions have been made.
16.1. The project is based on 365 days of operational schedule in a year and would
remain open for 10 hours a day.
16.2. The project cost and other projections etc. have been made on present
market conditions and the sources available within our sources only and
therefore it may vary on account of market fluctuations and with different
suppliers and qualities.
16.3. Commercial space is assumed to be owned or occupied on lease hold basis.
16.4. The cost of Furniture‟s and Fixture‟s, Equipment/Materials indicated refer to a
particular make and the prices are approximate to these prevailing at the time
of preparation of this report.
16.5. Contingencies and Escalation has been considered on Civil Work, Furniture‟s
& Fixture‟s and Fixed Assets to provide safeguard against escalation of prices
or any other unforeseen expenditure.
16.6. Power rate is assumed at Rs. 8.00/- per unit and monthly fixed rental charges.
Water would be available
16.7. Manpower requirement for the project has been planned considering the size
of the unit. The Salaries/Wages are taken as per prevailing rates in this type
of industry.
16.8. Interest rates on Term loan and Working capital loan have been considered at
an average rate of 12.00% per annum. For repayment, a period of 5 years is
planned after moratorium period of Six months.
16.9. Insurance charges have been considered Lump Sum.
16.10. Repair and maintenance expenses have been calculated reasonably.
16.11. Depreciation shown has been calculated on Straight Line Method.

16.12. Non-refundable deposits, Fees for Preparation of Detailed Project Report,
Professional Consultancy fees, Traveling & Convenience amount, Know-how
& Engineering fees, Application processing fees, trial production fees etc. are
considered under pre-operative expenses.
16.13. Break Even Point is calculated on optimum year of operation.
16.14. For the Project, availability of manpower is not a problem. Skilled and
unskilled manpower can be recruited for operating the business. Initial training
will be required for smooth and efficient running of the unit. It is felt that the
skilled manpower available locally having some experience in similar business
can be recruited to satisfy the manpower need.
16.15. Project would be set up at a premise that is well connected by road and there
will be uninterrupted supply of power and adequate availability of water
without any difficulty.
Page | 10
17. CAPITAL INVESTMENT ESTIMATES :
17.1. FIXED CAPITAL
17.1.1. LAND AND SITE DEVELOPMENT
Total Area Available: _______ Square Feet; Covered Area: _______ Square Feet
Particulars Area
Rate (Rs.) Amount (Rs.)
(Sq. Ft)
Site Development, Approach Road, Nil
-- --
Boundary etc. (Own Space/ On Lease)
Say (Rs. in Lacs) 0.00
17.1.2. BUILDING AND CIVIL WORKS
Details of Building and Civil Works are given below;
Particulars Area Rate (Rs.)

Amount (Rs.)
(Sq. Ft) Per Sq. Ft
Minor Repairing of Kitchen Space _______ LS 28000
Sub total 28000
Add: Electrification and Painting @ 25% 7000
TOTAL 35000
17.1.3. EQUIPMENT’S AND FIXTURE’S
Details of Equipment‟s and Fixture‟s are given below;
Particulars Qty. Rate (Rs.) Amount (Rs.)

Water Purifier 1 15000 15000
4 Burner Commercial Gas Stove 1 38500 38500
Microwave Oven 1 7000 7000
Slicer/Blender/Mixer/Grinder/Juicer 1 4000 4000

Kitchen Grill, Deep Fryer and Tandoori Oven 1 17000 17000
Refrigerator and Deep Freezer 1 40000 40000
Inventory Software (Sales, Stock and Purchase 1 22000 22000
Management)
Food Packaging and Tray Sealing Machine 1 28000 28000
Entire Kitchen Equipments and Cooking Range -- LS 25000
Kitchen Utensils Set and Miscellaneous Items -- LS 20000
Sub total 216500
Add: Taxes, Transportation and Installation etc. @ 10% 21650
TOTAL 238150
Page | 11
17.1.4. MISCELLANEOUS FIXED ASSETS
Details of Miscellaneous Fixed Assets are given below;
Particulars Qty. Rate (Rs.) Amount (Rs.)

Electrical Meter Installation, Exhaust -- LS 29400
Fans, CC TV Camera and Fire Fighting
Equipment‟s
Billing Machine, Printer and Misc. Items -- LS 25000
Two-wheeler for Home Delivery 1 20000 20000

(Second-Hand)
Sub total 74400
Add: Taxes, Transportation and Installation etc. @ 10% 7440
TOTAL 81840
17.1.5. CONTINGENCIES AND ESCALATION
Contingencies and Escalation has been assumed @ 5% of the Building & Civil
Works, Furniture‟s and Fixture‟s and Miscellaneous Fixed Assets expenses.
17.1.6. PRELIMINARY AND PRE-OPERATIVE EXPENSES
Details of Preliminary & Pre-operative Expenses are given below;
Particulars Amount (Rs.)

Travelling Expenses 5000
Franchisee Fee (If Any), Registration with Online Aggregators, 73000
Non- Refundable Deposits and Professional Fees
Interest during Implementation/Moratorium 18844
Miscellaneous expenses including Insurance 5000
TOTAL 101844
Page | 12
17.2. WORKING CAPITAL
17.2.1. RAW MATERIALS INCLUDING CONSUMABLES/ PACKAGING
Total expenses on Raw materials and Consumables at 100% capacity utilization are
estimated as below;
Monthly
No. Of Inventory Amount
Particulars Months (Rs.) (Rs.)
Inventory and Consumables (Initial Stock 12 80000 960000
on Monthly Basis)
Containers, Parcel Wrappers, Delivery -- LS 36000
Packaging Items and Adhesive Tapes
Expenses on Raw Materials at 100% Capacity (Rs.) 996000
17.2.2. MANPOWER
Total expenses on Manpower Salary in the 1st year are estimated as given below. It
is assumed that salary expenses will increase @ 0.5% every subsequent year;
Salary/ Cost/
Particulars of Employee Numbers Month Annum
(Rs.) (Rs.)
Cloud Kitchen Manager 1 8000 96000
Chef (Shift-wise Duty) 2 15000 360000
Delivery Boys/Unskilled Worker 2 6000 144000
Expenses on Salary on FirstYear (Rs.) 600000
17.2.3. POWER AND UTILITY
Total expenses on Power and Utility at 100% Capacity Utilization is estimated as

below;
A. Expenses on Power
Power Total
Particulars Quantity (KW) (KW)
Base Kitchen Power 1 5.22 5.22
General Lighting 7 0.10 0.70
Total Power requirement/ day (Kw) 5.92
No. of hrs/ day 10

Nos. of days/annum 365
Annual power requirement (kwh) 21615
Rate per unit (Rs) 8
Expenses on Power (Rs) 172922
B: Estimate of Utility
Expenses on Water/Fuel/ Other Utilities (Rs.) 72000
Expenses on Power & Utility at 100% Capacity (Rs.) 244922
Page | 13
17.2.4. REPAIR AND MAINTENANCE
A total expense on Repair and Maintenance in the First year is estimated as given
below. It is assumed that expenses on Repair & Maintenance will increase @ 2%
every subsequent year.
(Rs. in Lacs)
Particulars Cost (Rs.) Contingencies Total Rate Amount (Rs.)
Building & Civil Works 0.35 0.02 0.37 2.00% 0.01
Equipments &
Fixture‟s 2.38 0.12 2.50 5.00% 0.12
Misc. Fixed Assets 0.82 0.04 0.86 2.50% 0.02
Expenses on Repair and
Maintenance on First
Year. 3.55 0.18 3.73 -- 0.15
17.2.5. ADMINISTRATIVE EXPENSES
Administrative Expenses has been calculated @ 5% of Annual Sales Turnover for

each year of operation which is reflected in the Projected Profitability Statement.
Sl.
Particulars
No.
Administrative Expenses has been estimated to meet the expenditures under

following heads:
1. Lease Rent
2. Stationeries, Printing, Courier, Telephone, Mobile and Consumable Stores etc.
3. Professional Fees, Taxes and Insurance
4. Travelling, Transportation and Freight
5. Publicity, Advertisement and Sale Promotion
6. Bad Debt Expenses
7. Miscellaneous Logistic and Overhead Expenses
18. COMPUTATION OF WORKING CAPITAL REQUIREMENT :
Details of Working Capital Requirement are given below.

(Rs. in Lacs)
Period Total Current Assets
(Days) Year 1 Year 2 Year 3
Raw Material Inventory 30 0.41 0.49 0.57
Power & Utility 30 0.10 0.12 0.14
Salary 30 0.49 0.50 0.50
Total -- 1.00 1.11 1.21
Working Capital Margin on First Year (25%) 0.25
Page | 14
19. ESTIMATED COST OF THE PROJECT :
The estimated Project Cost is given below;
Particulars Amount (Rs. Lacs)

Land & Site development Own Space/ On Lease
Building & Civil Works 0.35
Equipment's & Fixture's 2.38
Misc. Fixed Assets 0.82
Preliminary & Pre-operative Expenses 1.02
Contingencies & Escalation @ 5% 0.18
Total Capital Expenditure 4.75
Working Capital Margin @ 25% 0.25
TOTAL 5.00
Total Project Cost: Rs. 5, 00, 000.00
(Rupees Five Lacs Only).
20. PROPOSED MEANS OF FINANCING :
The Proposed Means of Finance for the project is estimated as below;
Particulars Percent Amount (Rs. Lacs)
EQUITY
Equity from Promoters including Subsidy
from Central/ State Govt. 25% 1.25
DEBT
Term Loan from Banks/ FIs 75% 3.75
TOTAL 100% 5.00
Total Project Cost: Rs. 5, 00, 000.00
(Rupees Five Lacs Only).
Page | 15
21. ESTIMATED ANNUAL SALES TURNOVER :
Total Annual Sales Turnover at 100% Capacity Utilization is estimated as below;
Average
Sale Per
No. Of Customers Customer
Particulars Per Annum (Rs.) Amount (Rs.)
Sale of Packed Food Parcel (50 18250 Nos. 150.00 2737500
Customers Per Day)
Total Sales Per Annum at 100% -- -- 2737500
Capacity (Rs.)
Year-wise No. of Customers Per Annum is as follows;
Year Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Capacity 50% 60% 70% 70% 70%

Utilization
No. Of 9125 10950 12775 12775 12775
Customers/ Nos. Nos. Nos. Nos. Nos.
Annum
Page | 16
22. PROJECTED PROFITABILITY STATEMENT :

(Rs. in Lacs)
Particulars Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6
A. INCOME
Sales Realisation @ 100%
27.375 27.375 27.375 27.375 27.375 27.375
Capacity
Capacity Utilisation 50% 60% 70% 70% 70% 70%
Customers/ Annum at
Capacity 9125 10950 12775 12775 12775 12775
Utilisation(Customers/Annum)
Total Income/ Annum 13.69 16.43 19.16 19.16 19.16 19.16
B. OPERATING
EXPENSES
Raw Materials 4.98 5.98 6.97 6.97 6.97 6.97
Power & Utility 1.22 1.47 1.71 1.71 1.71 1.71
Salary (0.5% increase every
6.00 6.03 6.06 6.09 6.12 6.15
subsequent year)
Repair & Maintenance (2%
increase every subsequent 0.15 0.16 0.16 0.16 0.17 0.17
year)
Administrative Expenses
0.68 0.82 0.96 0.96 0.96 0.96
(5% of Sales)
Total Operating Expenses 13.04 14.45 15.86 15.90 15.93 15.97
Operating Profit 0.64 1.97 3.30 3.26 3.23 3.20
C. FINANCIAL EXPENSES
Depreciation 0.25 0.25 0.25 0.25 0.25 0.25
Interest on Term Loan 0.44 0.36 0.27 0.18 0.09 0.01
Interest on Working Capital
0.11 0.12 0.13 0.13 0.13 0.13
Loan
Gross Profit -0.15 1.24 2.65 2.70 2.76 2.80
Taxation -- -- -- -- -- --
Net Profit -0.15 1.24 2.65 2.70 2.76 2.80
Net Cash Accruals 0.10 1.49 2.90 2.95 3.01 3.06
Principal Repayment 0.37 0.75 0.75 0.75 0.75 0.37
Page | 17
23. CALCULATION OF INTEREST AMOUNT :
Interest rates on Term loan and Working capital loan have been considered at an
average rate of 12.00% per annum.
(Rs. in Lacs)
Particulars Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr6
Interest On Term Loan @12% 0.44 0.36 0.27 0.18 0.09 0.01
Interest on Working Capital Loan
0.11 0.12 0.13 0.13 0.13 0.13
@12%
Total Interest Expenses 0.55 0.48 0.40 0.31 0.22 0.14
24. DEPRECIATION SCHEDULE :
Depreciation has been calculated by straight line method. The details of calculation
are given below.
(Rs. in Lacs)
Amount/
Description Cost (Rs.) Contingencies Total Rate annum
(Rs.)
Building & Civil Works 0.35 0.02 0.37 3.17% 0.01
Equipment's & Fixture's 2.38 0.12 2.50 6.33% 0.16
Misc. Fixed Assets 0.82 0.04 0.86 9.50% 0.08
TOTAL 3.55 0.18 3.73 -- 0.25
25. TERM LOAN REPAYMENT SCHEDULE :
Duration of Term Loan repayment has been considered for a period of 5 (Five) Years
excluding moratorium period of 6 (Six) Months with equal monthly instalments. The
details of calculation are given below.
(Rs. in Lacs)
Particulars Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr6
Opening Balance 3.75 3.37 2.62 1.87 1.12 0.37
Principal Repayment Amount 0.37 0.75 0.75 0.75 0.75 0.37
Closing Balance 3.37 2.62 1.87 1.12 0.37 --
Page | 18
26. DEBT SERVICE COVERAGE RATIO :
(Rs. in Lacs)
Particulars Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Profit After Tax (Net Profit) -0.15 1.24 2.65 2.70 2.76
Depreciation 0.25 0.25 0.25 0.25 0.25
Interest 0.44 0.36 0.27 0.18 0.09
Total 0.54 1.86 3.17 3.14 3.10
Interest 0.44 0.36 0.27 0.18 0.09
Loan Repayment 0.37 0.75 0.75 0.75 0.75
Total 0.81 1.11 1.02 0.93 0.84
DSCR 0.66 1.67 3.10 3.36 3.68
Average DSCR = 1.91:1
27. BREAK-EVEN ANALYSIS :
(Rs. in Lacs)
Particulars Yr 1 Yr 2 Yr 3
A. Net Sales (Rs. Lacs) 13.69 16.43 19.16

B. Variable Cost
Raw Materials 4.98 5.98 6.97
Power & Utility 1.22 1.47 1.71
Other Expenses 0.68 0.82 0.96
Interest on Working Capital Loan 0.11 0.12 0.13
Total Variable Cost 6.99 8.38 9.77
C. Contribution (A-B) 6.69 8.04 9.39
D. Fixed & Semi-fixed Costs
Salary 6.00 6.03 6.06
Repair & Maintenance 0.15 0.16 0.16
Interest on Term Loan 0.44 0.36 0.27
Depreciation 0.25 0.25 0.25
Total Fixed Cost 6.85 6.80 6.75
E. BREAKEVEN POINT 102.27% 84.58% 71.83%
F. BEP at Operating Capacity 51.14% 50.75% 50.28%
G. Cash BEP 49.26% 48.87% 48.40%
Page | 19
28. PROJECTED CASH FLOW STATEMENT :
(Rs. in Lacs)
Particulars Implementation
Period Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
SOURCES OF FUND
Profit after Tax with

Depreciation & Interest added
back 0.64 1.97 3.30 3.26 3.23
Increase in Promoters Capital 1.25
Increase in un-secured loan
Increase in Term Loan 3.75
Increase in Bank borrowing
(WC) 0.75 0.08 0.08
Prelim. Exp.W/off 0.10 0.10 0.10 0.10 0.10
Decrease in WIP(Inventory)
Decrease in Other Current
Assets
Sub Total 5.00 1.50 2.15 3.48 3.37 3.33
USES OF FUND
Preliminary Expenses 1.02
Capital Expenditure 3.73
Increase in WIP
Repayment of Term Loan 0.37 0.75 0.75 0.75 0.75
Decrease in unsecured loan
Interest Payment
Term Loan 0.44 0.36 0.27 0.18 0.09
Other bank(W.C) 0.11 0.12 0.13 0.13 0.13
Increase in Working Capital 1.00 0.10 0.10
Decrease in Other Current
Liabilities
Sub Total 4.75 1.92 1.33 1.25 1.06 0.97
Opening Cash/Bank Balance 0.00 0.25 -0.17 0.64 2.87 5.17

Surplus/Deficit 0.25 -0.42 0.82 2.22 2.31 2.36
Closing Cash/Bank Balance 0.25 -0.17 0.64 2.87 5.17 7.54
Page | 20
29. PROJECTED BALANCE SHEET :
(Rs. in Lacs)
Particulars Implementation
Period Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
LIABILITIES
Promoters Capital
Promoters capital 1.25 1.25 1.25 1.25 1.25 1.25
Profit from P&L -0.15 1.09 3.73 6.44 9.19
Sub Total 1.25 1.10 2.34 4.98 7.68 10.44
Secured Loan
Term loan 3.75 3.37 2.62 1.87 1.12 0.37
CC limit from Banks 0.75 0.83 0.91 0.91 0.91
Sub Total 3.75 4.12 3.45 2.78 2.03 1.28
Unsecured Loan
Current Liabilities
Total of Liabilities 5.00 5.22 5.79 7.76 9.72 11.73
ASSETS
Gross Fixed Block 3.73 3.73 3.73 3.73 3.73 3.73

Sub Total (a) 3.73 3.73 3.73 3.73 3.73 3.73
Depreciation
Cum. Depreciation 0.25 0.50 0.75 1.01 1.26
SubTotal (b) 0.00 0.25 0.50 0.75 1.01 1.26
Net Fixed Asset Block (a-b) 3.73 3.47 3.22 2.97 2.72 2.47
Current Asset Block
W.I.P.(Inventories)
Cash & Bank Balance 0.25 -0.17 0.64 2.87 5.17 7.54
Other Current Assets 1.00 1.11 1.21 1.21 1.21
Sub-Total 0.25 0.83 1.75 4.08 6.39 8.75
Preliminary Expenses not
written off 1.02 0.92 0.81 0.71 0.61 0.51
Total of Assets 5.00 5.22 5.79 7.76 9.72 11.73
Page | 21
30. INTERNAL RATE OF RETURN :

(Rs. in Lacs)
Particulars Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
CASH OUTFLOW
Capital Expenditure 3.73 0.00 0.00 0.00 0.00 0.00

Working Capital 0.00 1.00 0.10 0.10 0.00 0.00
Total (A) 3.73 1.00 0.10 0.10 0.00 0.00
CASH INFLOW
Profit After Tax -0.15 1.24 2.65 2.70 2.76
Add: Depreciation 0.25 0.25 0.25 0.25 0.25
Add: Interest 0.44 0.36 0.27 0.18 0.09
Add: Salvage Value
Total (B) 0.00 0.54 1.86 3.17 3.14 3.10
NET FLOW (B-A) -3.73 -0.46 1.75 3.07 3.14 3.10
IRR =24%
31. PAY BACK PERIOD :
(Rs. in Lacs)
Cumulative
YEAR Cash Outflow Cash Inflow Cash Inflow
-------------------------- --------------------
00 5.75
01 ------------------------------
0.10 0.10
02 ------------------------------
1.49 1.59
03 ------------------------------
2.90 4.49
04 ------------------------------
2.95 7.44
05 ------------------------------
3.01 10.45
06 ------------------------------
3.06 13.51
Hence Simple Pay Back Period = 3 Years and 6 Months (Approx.)
Page | 22
ANNEXURE- I
STATUTORY PERMITS AND BUSINESS LICENSES REQUIRED

FOR CLOUD KITCHEN BUSINESS
While starting a Cloud kitchen business, one may need to obtain certain permissions
and licenses from different authorities. The various statutory permits/clearances and
business licenses required for compliance is mentioned below: –
 First of all, determine the ownership pattern/form of your business

structure. There are 6 options available namely- Sole proprietorship,
Partnership, One person company, Limited liability partnership, Private limited
company and Public limited company. Choose the most suited business
structure as per your scale of business and resources. Accordingly, register
the business.
 Decide a Name to the Business Farm.
 Contract of Lease- Since, one of the reasons for starting up a cloud kitchen
is to avoid the costs for a dine-in restaurant. To overcome this problem, cloud
kitchens opt for using a property on rent or lease. Most of the cloud kitchens
nowadays enter into a lease agreement with the owner of a property wherein
its kitchen can be set up. Commercial properties like warehouses have now
started operating exclusively for the purpose of leasing out cloud kitchens.
Therefore, a lease agreement has to be entered into that clearly states the
lease term, terms and usage of the space and use of premises by third
parties. Proceeding without entering into this contract is like inviting legal
trouble. This contract is governed by the Rent Control Act enacted by the
states. A lease contract for a commercial space is essentially different from
that for a residential house. Hence, it must contain clauses such as:
o Base rent, deposit, maintenance charges

o Alteration of structures
o Right to sublease
o Working hours on the property
o Consequences of breach of contract
o Terms and conditions of renewal
o Code compliance
o Name and Address of both tenant and landlord
o Amount of payment
 Open a Current Account with any recognised/government registered Bank.
 Obtain Pan Card.
 Obtain the GST Registration. Every business is required to pay tax and
register itself under GST, as it deals with the sale of goods. On registration,
the project will get a GSTIN, a 15 digit code which is a unique GST
identification number.
Page | 23
 It is mandatory for all the businesses including cloud kitchens to obtain a trade
license. Apply for the Trade License from the Municipal Authority/ Local
Authority. Documents required for obtaining trade license;
 Pan Card.
 A bank statement of the establishment of the trade.
 Certificate of establishment.
 Premises proof in the form of either electricity bill, water bill or sale
deed.
 Colour photograph, ID proof and Address Proof of the
owner/partners.
 Front facing photograph of the trading business with goods that are
traded in proper display.
 Obtain FSSAI License- Food Safety and Standards Association of India

(FSSAI) is the authority that grants license for food related businesses in India
and an FSSAI license is mandatory for the effective operation of a Cloud
Kitchen. The FSSAI is responsible for protecting and promoting public health
through the regulation and supervision of food safety and is a mandatory
registration/ licence for business entities that engage in food and related
activities. The license can be obtained for a period of one to five years
depending on the necessity and is subject to renewal post expiration. The
FSSAI registration/certification has to be mentioned on the packaging and the
invoice generated. In this emerging market, a mindful customer will definitely
appreciate this certification as it will help in building the confidence of the
customer in the brand.
 Every store or shop and retail counter requires registration under ‘The Shops
and Establishment Act, 1953’.The license is a mandatory and is designed to
regulate payment of wages, hours of work, leave, holidays, terms of service
and other work conditions of people employed.
 Trade Mark Registration –One of the key registrations for a cloud kitchen is to
obtain a trademark registration. As the market for cloud kitchen grows further,
the competition will also grow. Obtaining a trademark registration will not only
help the business of a cloud kitchen to create its unique identity in the market
but will also aid in the protection of its brand. The owner of the business must
file an application for registration of the name, style or logo as its intellectual
property with which its brand could be identified and which could not be used
by any other brand.
 Fire Safety Permit/NOC from the State Fire Department – There will be
certain types of equipment‟s which may catch fire easily, therefore Fire and
Safety license is a must to ensure that the premises is compliant with all the
safety norms. This No Objection Certificate can be obtained from the local
office of the Fire department.
An important aspect of running a tension-free business is to obtain requisite licenses

that are required as per the laws of the local administration. Therefore, approach the
local competent authorities to get those permits and licenses.
Page | 24
ANNEXURE-II
BASICS OF CLOUD KITCHEN BUSINESS
A. What is Cloud Kitchen?
A Cloud Kitchen is primarily a restaurant kitchen that refers to a place where food is
prepared and delivered at door steps by taking orders via calls or online ordering
platforms and offers no dine-in facility. These are mostly base kitchens, started in
small setups that aim to provide food at customers‟ doorstep.
B. How Does a Cloud Kitchen Model Work?
The working process of the Cloud Kitchen is quite simple. A Cloud Kitchen is a
concept of delivery only restaurant with no physical space, no dine-in space or
takeaway counter. Just an operational kitchen for the preparation of food that
functions as a production unit. No fancy infrastructure, no waiters, no tables, no
furniture, nothing at all. Customers can place their orders online through the online
food aggregator apps or the restaurant app, hence, the name cloud kitchen. These
kitchens are sometimes also known as ghost kitchens, dark kitchens or virtual
kitchens.
C. What makes it different from restaurants?
Primarily, they do not cater dine-in services. They are mainly into food preparation
and delivery or tie up with food ordering portals such as Swiggy, Zomato etc.
D. What Are Different Cloud Kitchen Business Models?
Following are some of the most widely accepted and prevalent cloud kitchen
business models;
(i) Standalone/Single Brand Cloud Kitchens:
This is the most pristine cloud kitchen business model. A standalone/single brand
Cloud Kitchen operates under a single theme and concept. It typically offers 1-2
cuisines and has a small menu with 10-15 menu items. An average standalone cloud
kitchen is around 300 Sq. Ft. in size.
(ii) Multi-brand Cloud Kitchens:
This Cloud Kitchen business model enables the restaurant operators the flexibility to
launch multiple brands and provides easy avenues for business expansion. A multi-
brand Cloud Kitchen is a large kitchen infrastructure where multiple brands of the
same company can operate, using the same equipment and resources. These
brands are cuisine specific, each satiating a different customer need and catering to
different Target Groups. The multi-brand cloud kitchen model enables companies to
cater to a wider audience and sell more to existing customers. The huge size and the
diversification give them an added advantage as they have multiple listings on the
aggregators, which boosts their audience reach.
Page | 25
(iii) Virtual Restaurants:
This essentially operates within the existing restaurants. These brands capitalize on
the physical infrastructure and resources of the existing restaurant as they operate
under a different brand name via getting listed on online food aggregators. The
virtual brand offers a different menu from the main restaurant and can be a great
way to experiment with a new cuisine that may be very different from what the
established restaurant is known for.
(iv) Aggregator Managed Cloud Kitchens:
Aggregator Cloud Kitchens are large co-working kitchen spaces managed by the
online food aggregators. The online food aggregators like Swiggy, Zomatoetc invite
their restaurant partners to prepare food for delivery-only from these kitchen spaces.
Leveraging on the robust online delivery market, many delivery aggregators have
kicked off their own cloud kitchen models, offering empty kitchen space and minimal
infrastructure that restaurant businesses can rent. Restaurants can use these fully
stacked or a shell kitchen depending upon their requirement on a shared basis. So
basically, many small kitchens can operate within one larger kitchen space, with
multiple restaurant brands cooking at any given moment.
(v) Operator Managed Cloud Kitchens:
Operator-managed Cloud Kitchens are like virtual franchising models and one of the
best ways of expanding the cloud kitchen business. This is one of the easiest ways
to increase the cloud kitchen business‟s size where the kitchen operator runs and
manages the brand‟s operations. The brands receive orders from the operator‟s
website or other resources, but they also can get listed on other online food
aggregators. The restaurants can outsource everything from manual operations to
kitchen and delivery. All operations, right from accepting the order online and
preparing it, to getting it delivered through third-party logistics is taken care of by the
operator.
(vi) Outsourced Cloud Kitchens:
In this type of model, all the operations of a Cloud Kitchen are outsourced to different
players. From menu to placing an order and from preparation of food to its delivery is
outsourced to third-party players/entities. The orders can be placed through online
food aggregator apps or on the central website/app or call centre. This type of model
is the least popular one. Since, restaurant startups and even existing restaurants
have already started to penetrate the cloud kitchen space; it becomes all the more
important for these businesses to be legally compliant owing to the fact that this
concept is still relatively new in India.
(vii) Co-working Cloud Kitchens:
A Co-working Cloud Kitchensalso known as shared kitchen space, commissary

kitchen, etc. are multiple restaurants operating in a large space. These are separate
restaurants with separate owners which are set up under a co-working space. Small
kitchen spaces are leased/rented to the restaurants according to their preference.
Page | 26
This type of model is one of the best models for start-up restaurants wherein they
can save on costs for establishing a kitchen space while focusing on brand building
and developing its customer base. In these types of models, the compliance relating
to fire and safety licenses is taken care of by the owner of the property where these
kitchens are situated.
E. Advantages and Disadvantages of Cloud Kitchen Business:
Advantages of Cloud Kitchen: Cloud kitchens offer the following advantages over
traditional restaurants;
1. Low Infrastructure/Operational Cost: A Cloud Kitchen is much more cost-

efficient than a dine-in restaurant in so many ways. Firstly, there‟s no need to invest
in real estate or pay high rents or overspend on interior design, furniture or
equipment. Shared facilities allow restaurateurs to produce and deliver food in a
much more affordable way. Secondly, a cloud kitchen‟s manpower force consists of
chefs, dishwashers and delivery drivers. In this concept, the front of house staff is no
longer necessary. So, in this way, cloud kitchens reduce operational and manpower
costs. Lastly, it is also possible to save on inventory with cloud kitchens. By tracking
data and removing ingredients that are not as popular, it becomes easier to save on
overhead expenses.
2. Scalability: Cloud Kitchen concept is full of growth prospects.A Cloud Kitchen

concept can be expanded easily geographically without investing in expensive real
estate. Cloud kitchens opened with low investment amounts can help franchise
companies grow their business.Once the base is set, branches under the same
brand can be opened in another States. Anytime if it becomes necessitated and to
encash an opportunity Front Face restaurant may be opened with the same brand
because customer base is ready.
3. Increased Efficiency: Cloud Kitchens run more efficiently than traditional dine-in
restaurants. For obvious reasons, busy eating hours and wait times make the
delivery process much more difficult in traditional restaurants. And in cloud kitchens,
as the only focus is to prepare and deliver high-quality food, the whole process gets
faster and easier.
4. Competitive Menu Prices: On one hand restaurants are struggling to make any
income whereas on the other hand, customers find the food to be extremely
expensive. If the food were fairly priced and prepared in a homely manner, many
customers would prefer to order on regular basis. Once again, this is because of the
rise of working spouses who have no time for cooking. Cloud kitchens can use their
resources to invest in new menu ingredients easily. Observing real-time customer
data, restaurant operators can update their menu ingredients, set competitive prices
and run their business much more effectively. This is because since customers
never visit these kitchens, they do not need to be at prime locations. This allows the
restaurants to cut costs. They can provide good quality food to the customers for a
fraction of the costs.
Page | 27
5. Flexibility: It‟s easier to make changes and experiment with the menu when it
comes to a Cloud Kitchen. Since the entire menu is always online, one can introduce
an item and take it off at their will depending on the demand. Luring the modern-day
connoisseurs with experimental fusion food is a great way of gaining popularity and
attention.
Disadvantages of Cloud Kitchen: Cloud Kitchens have their share of following

disadvantages as well;
1. Low Barrier to Entry: Low barrier of entry reduces the cost of starting a food
business for anyone and the entire world. The food business is visible and perceived
to be lucrative and so everyone wants a piece of the action. As such, this category
will see an increased intensity of competition. People see the success or the
perceived success of other restaurants and believe they can do it too.
2. Dependence on Food Aggregators: Unless a restaurant has its own delivery

app, the access to the customers is through third party food aggregators like Zomato
and Swiggy. These aggregators charge between 15% and 35% to restaurants as
commission. Ideally, the restaurant doesn‟t mind the commission due to the order
volumes generated by these services. But is worried about the impact high
commissions can have on their business in the long term.
3. Technological Expenses: The biggest problem with cloud kitchen model is that it
has replaced real estate costs with technological costs. Cloud kitchens have
astronomical technical costs. This is because these kitchens have to communicate
with a lot of food delivery apps. The orders have to be received and communicated
to the kitchen which is the nearest to the customer‟s location. There are cloud-based
solutions available which allow restaurants to go high tech without any major upfront
costs. However, the monthly subscriber fee also burns a hole through the wallets of
many start-up kitchens. Hence, the costs end up being very similar to traditional
restaurants. However, the number of the users is severely restricted since these
outlets do not provide the dine-in facility.
4. Building Brand: Since it‟s an online-only venture with limited customer

interaction, Cloud Kitchens might find it difficult to build their brand at first. With no
physical location, Cloud Kitchens are competing exclusively in a crowded online
marketplace. Customers are less likely to become regular and won‟t be able to
connect with a particular restaurant brand because they are ordering from a third-
party app with various restaurants listed.
5. Masked Customer Data: Dealing with third party food aggregators would leave
the restaurant with no customer data of their own. The restaurant would be provided
masked customer data, which means they would not know who their customers are.
This impacts sales in the longer run, as there would be minimal customer retention.
Masked customer data substantially limits the chance for marketing and bringing
about improvement in the operations.
Page | 28
F. What Makes Cloud Kitchen Popular Food Startup Business idea?
With the rising competition and ever-growing technology, the food industry has
always been under multiple technological innovations. Cloud Kitchen is one such
concept that has sneaked in the food industry recently and the recent pandemic in
2020 has accelerated this shift in choices for the world population. Reports suggest
that the Cloud kitchen concept is marching ahead at the highest CAGR (Compound
Annual Growth Rate) among the other segment in the restaurant industry and is
considered as the smarter way to run the restaurant business.
As per a 2018 survey, around 67% of India‟s restaurant owners wish to open a Cloud
Kitchen as a new revenue source. The popularity of Cloud Kitchen has soared
immensely in the last few years, mainly because of low infrastructure costs and high
margins. Since orders are only accepted via online medium and in some cases via
calls, there are no additional overheads to maintain dining space, employ serving
staff and pay steep rentals. All one need is a kitchen and expert cooks to make food.
In most cases, delivery is handled by a third party, thereby saving a tremendous
amount of money for the restaurant owners. Even if the kitchen owner decides to
deliver the orders on their own-self, the cost is much less than paying rent for the
dining space and employing staff members to serve the food.
The changing lifestyles and demographics of the world focus on high disposable
incomes and busy schedules, which elevates the demand for cloud kitchens. People
are so busy that they don‟t find adequate time to prepare their food and don‟t have
any option left other than ordering food. Cloud kitchen is preferred for fresh, home-
cooked food at a lower cost. Cloud kitchens are more economically profitable than
the traditional dine-outs as they can save on real estate costs like interior design and
outer decorations. They also need not provide comfortable seating arrangements to
attract customers. A single person can manage the entire business when efficient
staff are available. Though the concept of cloud kitchens is still at the very embryonic
stage, the scenario changes every day. This does pave the way for the budding
popularity of cloud kitchens as a business model, shifting away from retail-driven
brands.
G. How Cloud Kitchen Is the Future Of the Food Industry?
The food industry has suffered significantly with the initial 120-daysof COVID-19
pandemic lock-down and followed by demand failure as patrons continue to stay
home. It‟s a grim reality that many restaurants will go out of business. Every
restaurant is currently on survival mode. In the short term, it will become critical for
traditional restaurants to pivot to delivery for survival. Even if they do make the pivot,
many still will not make it. Another reason that cloud kitchens are gaining popularity
is the convenience it offers to restaurateurs who are struggling in the rise of
competition. Considering the harsh conditions after COVID-19, the restaurant
industry is in a worse position than ever. Especially for fine dining restaurants and
franchises, the Cloud Kitchen concept enables restaurant operators to stay afloat
with online ordering solutions and cost-saving options.
Page | 29
In the current environment and with the continued uncertainty of the COVID-19
pandemic, Cloud Kitchens or food and beverages outlets backed by a Cloud Kitchen
network have a better chance of survival and are likely the future of the food
industry.
Online ordering is a convenient and quick option for many people and the most cost-
saving and safest way to offer food in present times. And with a cloud kitchen
integration, restaurateurs can offer the best food, as they must only focus on the
quality of food. Cloud Kitchens offer a plethora of benefits ranging from lower costs
to dynamic customer engagement. As technology evolves towards drone deliveries,
voice ordering and personalized recommendations in the coming years, cloud
kitchens are expected to witness increased adoption and demand. With the model of
low risk, high margins and endless opportunities, Cloud Kitchens are becoming one
of the safest food business formats that has just started to spread its wings.
XXXXXXXX
Page | 30
ANNEXURE-III
BEGINNER’S GUIDE TO
START CLOUD KITCHEN BUSINESS
Cloud Kitchen today has the potential of fulfilling the dreams of many small and
medium scale entrepreneurs. Home-cooked Tiffin services are becoming a more
viable concept. Cloud kitchen can make possible what most people could not
imagine doing because they were faced with common challenges like high rental
costs, capital investments and a robust infrastructure. As new innovations take over,
the Cloud Kitchen is the next best thing coming up. The concept is economical for
both parties. Food can be made more affordable by eliminating other overhead costs
and people have the satisfaction of ordering in without having to spend on a
commute or the extravagance of a restaurant. Here are the key points that one must
keep in mind before starting own cloud kitchen. It is worth considering that a
successful business like cloud kitchen, requires exactly the same amount of
business mindset, as it requires the passion for cooking.
STEP ONE: Market Research
The reason behind the low investment needed to open a cloud kitchen is the real
estate cost. In the cloud kitchen model, the location doesn‟t have to do anything with
footfall, parking space, and high-end site. However, it does have a lot to do with
hygiene, smaller space to operate and proper water supply. Demographics play a
major role in the success of a cloud kitchen. Before you start a cloud kitchen
business, you should know your customers and to whom you want to serve. For
example, the requirements of a family are completely different from a young, gym-
going, twenty-something. Families require a balanced meal while gym-goers prefer
protein-rich food. So, you should know your clientele before you come up with your
food concept, menu offerings, and marketing tactics.
STEP TWO: Choose a Business Model
From the types of available Business Models, you need to choose the best suitable
type of business depending on your budget. Thumb rule for a right plan is opt for a
model which involves a lower investment and high returns. Just to start a business
without evaluating your budget, makes no sense. If you‟re applying for loans, you
may need to submit a proper business model to be eligible for a business loan. On
the other hand, every penny known, is always utilized in a right direction for a right
purpose.
How do you choose the right business model for your Cloud Kitchen? The first step
is to find out what your customers are looking for. One way to do it is to go online
and google. For example, if you are targeting health-conscious people, you have to
find out what type of food they prefer. To find out about the preferred cuisine of your
target audience you can go to different forums like Facebook. You can check the
dietary preferences of different groups there.
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STEP THREE: Study your Competition
Find out the popular dishes your competitors are serving and also what they are not
serving. Also, which items have high demand and are selling well. For example, if
you see that gluten-free doughnuts are being picked up by many customers, you
know that it is a promising product.
STEP FOUR: Gain Experience
Running a cloud kitchen demands knowledge in a wide variety of fields. Apart from
the basic knowledge of cooking, it will be good to know about accounting, marketing,
and sourcing of raw materials. A degree in hotel management and some work
experience in the hospitality sector will help you immensely.
STEP FIVE: Budget Allocation
With commercial kitchens optimised for delivery, one can launch a new location in
less than a month. The cost is 40 to 50% less than the cost of a brick-and-mortar
restaurant. The real estate costs and labour expenses will be far less. You can bear
the initial start-up costs from your savings. If you don‟t have sufficient funds, you can
ask your family or friends for help. Another option is to apply to your local bank for a
business loan.
STEP SIX: Location & Property
The key factor that separates a Cloud Kitchen from a restaurant is the investment in
location. A Cloud Kitchen doesn‟t need a high footfall and prime property position.
Rather, it can easily be set up in a 250-350 Sq Ft room, as there is no House Front.
This greatly reduces the expense of opening a cloud kitchen. The cloud kitchen can
be in a fairly inaccessible area but with high customer demand, particularly for a
specific kitchen. Residential areas, market backsides, unused parking lots make a
perfect cloud kitchen spot. It just needs to be placed between customers from where
high demand comes and operationally and logistically right for you to deliver at your
best.
STEP SEVEN: Licenses
For many reasons, obtaining proper licenses and certification is important to open a
cloud kitchen. Second, getting the licenses in order will save you from legal
difficulties. Second, because consumers can not visit the outlet themselves to test for
sanitation, food safety and preparation, proper licensing gives them a sense of
satisfaction. You can promote these on your website and in your marketing
campaigns to convince your customers that you prepare high-quality food.
FSSAI: Food Safety and Standards Authority of India. FSSAI Licenses are
mandatory for food-related business in India and must be obtained on behalf of the
company and its owner. The license period can range from 1 year to 5 years and
must be renewed before expiry. It‟s also nice to mention FSSAI on the packaging
and invoice to build confidence in our customers about our offers.
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Trade License: Every business will require to possess a trade license, and so does
the cloud kitchen. This can be obtained from the local municipal office by furnishing
all necessary documents. Apart from the cost, we might need some extra money to
get the job finished. It is a one-time job and its kind of mandatory legal action.
Fire and Safety License: Now it‟s not mandatory to start with, but it is great to save
yourself from future troubles. This is part of law, and fire and human health
agreements are compulsory for any workplace.
Trademark Registration is also very relevant for the cloud kitchen company
because the idea of this company doesn‟t allow the customer to step in, so the brand
name of the business is the customer‟s HERO. To protect the brand, the business
owner must file trademark applications for the logo, name, wordmark consisting of
different colours, patterns to create their unique identity on the market.
Additional Licenses: The main licenses to start a cloud kitchen company are
FSSAI, Shop & Establishment, GST Registration, Fire Department NOC etc. Make
sure you have these before starting a food delivery company.
STEP EIGHT: Decide and appropriate Name & Logo
The one reason but why cloud kitchen fail in the first year is because the owners
tend to skip this part. No matter how small you plan to start the single-brand cloud
kitchen, you need to give it a name. Also you need a proper logo to represent your
cloud kitchen business. Naming a cloud kitchen business or for that matter any food
business can be a bit tricky. Try to limit the name to one or two words. Make sure the
name reflects your cloud kitchen theme. If your cloud kitchen items represent a
specific region, or culture, that can be added as the second word, for instance
Behrouz Biriyani. Also the name needs to be simple and easily memorable for your
target customers.
STEP NINE: Kitchen Equipment & Packaging
The kitchen equipment depends on the type of cuisine you serve. The basic
equipment required to start a cloud kitchen is – stove and oven, refrigerator, knives,
etc. The packaging is a vital part of running a food company. No matter how good
the food is, it will end up destroying the whole consumer experience and giving the
company a bad name. Packaging also depends on the food type. You‟d need plastic
containers, bottles, spoons, etc. to ensure proper food packaging.
STEP TEN: Staff
This decision would be based on the size of the business. The secret sauce behind a
successful restaurant is the team that works for it, with the Chef being the most
critical part of the team, as they not only prepare the food but also helps in designing
the menu. In an online kitchen, a minimum of five employees is required. You‟d need
at least two chefs, two helpers, and one housekeeper. The salary of the staff
depends on their experience. The average salary of the Chef at initial level is Rs
14000- Rs 15000, while that of helpers and other staff salary range between Rs
6000- Rs 8000 based on their work. Apart from the kitchen staff, two employees at
the delivery and one at the counter for receiving online and telephonic orders are
required. Here we would also like to recommend you to partner with the third-party
delivery services which work on a per order basis.
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STEP ELEVAN: Define the Menu
According to Cloud Kitchen experts it is always a good idea to keep the menu small
and simple with limited items. Most of them suggest a menu that consists of a
maximum of 15 to 20 items. Remember your cloud kitchen is not a restaurant where
you can play “the more the merrier game”. If your menu consists of a large number
of different items it might confuse the customers. Unlike a restaurant or cafe where
there is an attendant who can explain the menu and suggest the right items, you
can‟t do so in a cloud kitchen. So, if your menu is a cumbersome and confusing one,
it may prompt customers to move to some other platform.
STEP TWELVE: Point of Sale Technology
The entire online food ordering and delivery system are heavily dependent on the
proper acceptance of food orders. It is also essential to keep track of the number of
orders incoming from the various online ordering platforms. Tracking of orders and
detailed reporting is essential for the smooth functioning of restaurants. Select a
POS that is customized to suit the requirements of the online ordering website.
STEP THIRTEEN: Marketing
Cloud Kitchen does not have any physical presence and relies solely on its presence
virtually. Therefore, marketing becomes even more necessary for a cloud kitchen, as
it becomes the single source of getting orders. Customers should be able to find
ways to contact you and leave their feedback, be it positive or negative. It takes good
marketing skills and quality services to convert a potential customer base into a
loyalist for the long term.
Proper marketing and advertisement are essential to the success of a restaurant. For
a cloud kitchen, marketing becomes even more necessary as it becomes the single
source of getting orders. Since you are not spending on location and other
maintenance costs, you can keep a sum aside for marketing. Online marketing
works in favour of cloud kitchens quite well. The first thing you need to do is to get
your restaurant registered on restaurant listing and review sites such as Zomato,
Tripadvisor, Burrp etc. and encourage positive reviews from your regulars. You can
also try Facebook for advertising exclusive deals and discounts.
STEP FORTEEN: Inventory Management
The initial setup and estimate of keeping an inventory can be challenging. A well-
developed tracking system can help you once your business takes off and give you a
better idea based on the frequency of orders and the number of ingredients and raw
materials required accordingly.
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STEP FIFTEEN: Database Management & Sustainability
Database Management and record-keeping should be maintained so that you do not

have to spend hours managing vendors, orders, raw material, stocks, salaries, taxes,
revenues, and so many other costs. While it‟s quite easy to start a business,
sustaining it is the most challenging part. There are quite a few factors that impact
the sustainability of the business like an adequate amount of working capital,
marketing & promotions to increase the sales volume, experimenting with the menu
to identify what‟s performing and what‟s not.
Conclusion: Cloud kitchens are low-risk and highly beneficial business ideas. They
get set up so quickly and do not even require huge amounts of investment. It is
because of this that they have become a highly acceptable business idea. Be it
passionate chefs or a small household in need, food services have become the most
common business idea for all. While businesses are supremely expensive ideas,
cloud kitchens sort the need for you. If you‟re also a young mind looking for a new
venture, this is the right time to jump in.
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ANNEXURE- IV
SMART TIPS TO FOLLOW FOR

SUCCESSFUL CLOUD KITCHEN BUSINESS
One of the emerging sectors of business in 2021 is Cloud Kitchen Business. Cloud
Kitchen business has been on the roll for the past few years and with Covid-19
affecting the sector at large, it has seen an exponential growth. The entry barrier for
Cloud Kitchen business is quite low and so the competition is very high. In order to
succeed in cloud kitchen business, it is very important to make the business
operation very efficient.
Here are few Smart tips to follow for running a Successful Cloud Kitchen
Business;
Maximum/Optimum utilization of Space: One of the key elements of the success

of Cloud Kitchen is optimum utilization of space by having immaculate kitchen
design, keeping in mind the smooth work flow from production to packaging. When
kitchen space is optimized, you will have to pay fewer rentals and that has a direct
effect on your profitability.
Hygiene and Food Safety: Make sure to maintain hygiene and food safety while
running the cloud kitchen. After all you are running a commercial food establishment,
even if it is not visited by customers.
Consistency in Quality of Food and Service: Quality remains the primary thing
that your customer wants. So, don‟t comprise on quality and provide them quality
food and make them feel they are having home-cooked food. This will leave a good
impact on them and they will come back to have more. The food delivered by cloud
kitchens has to be prepared and packed keeping in mind that it will be in transit for
another 15-30 minutes. If your cloud kitchen provides efficient services, your
customer base will increase. Though cloud kitchen is an excellent business idea, you
need to overcome the challenges of problematic delivery locations, peak hours, late-
night deliveries, weather challenges, or festive rush. The food orders have to be
delivered on time for the unsurpassed customer experience.
Efficient Packaging Process: Next important thing is the packaging that is being
used. It is utmost important to have packaging that is tamper proof & leak proof so
that customers can have food in its right temperature. The food packaging is
carefully designed to avoid spillage and food going cold. Regardless of difficult
delivery locations, peak hours, late nights, weather challenges, or festive rush, the
food orders have to be delivered on time for the best customer experience.
Logistics Cost: While saving on the real estate costs, the model has an additional
logistics cost. The cost of last mile delivery has to be carefully managed. It becomes
further challenging since the demand tends to peak during lunch and dinner hours
only, thus further increasing delivery costs. The key to solving this challenge is to
have a good menu/brand selection so that order distribution is uniform throughout
the day, using technology extensively to make logistics efficient and to look at ways
to club orders together. It is also important to reach a high number of orders per
kitchen so that logistics become efficient.
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Efficient Delivery Process: Tying up with food aggregators has a lot of advantages.
One of them is being the prompt presence of delivery person for the orders.
Delivering orders efficiently in the stipulated time is one of the key elements of cloud
kitchen business operation.
People Driven Operations: The Cloud Kitchen business is operationally intensive

and highly dependent on humans, both on the kitchen side and the last mile delivery
side. This makes processes dependent on human decision-making, prone to errors
and inconsistency. The attrition levels are also very high, leading to further
investments in training a large new workforce over and over again. To scale
successfully, cloud kitchens have to put in immense efforts into building proprietary
technology platforms that substitute human judgement. With high-end equipment
and Ml-driven technology models, cloud kitchens can ensure seamless operations
across functions: food preparation, inventory forecast, last-mile logistics and more.
Implementing System & Process: Every function in the cloud kitchen operation
should have a process that has to be followed sincerely. Have SOPs (Standard
Operating System) for each of the operation processes like procurement, production,
inventory management, recipe management in place. And each of these processes
should be integrated with the technology. Install Recipe management system
software to automate your food preparation process which will help you to get
consistency in the quality and quantity of the food prepared and get an edge in the
competitive market. Also automate your procurement & Inventory management
system with Supply chain Management tool to understand your wastage, Food Cost
& Stock of Material. The attrition rate in F & B is very high so, it is almost essential
for a cloud kitchen business to have a system that is integrated with technology, to
remove human error and have consistency in quality.
Customer Ordering System: Having an efficient customer ordering system is also

one of the key elements of success for a cloud kitchen business. One needs to have
a POS (Point of sale) installed in the cloud kitchen through which all online orders
land up. This will help you to smoothen the customer order management. Time being
essence in cloud kitchen operation, POS is a saviour. Various food aggregators like
Zomato & Swiggy also can be integrated with the POS and thus, help to streamline
all orders at one place. Another advantage of having a POS is being able to get
analytics on customer buying behaviour that will help you to know the pulse of the
customers. These helps to have an efficient CRM, which leads to happy customers
and that result in happy cloud kitchen owners.
Manpower Planning & Training: Spend time with your team; train them not only to
perform their work efficiently but also to motivate them with the brands vision &
purpose. These help to have a strong work culture within the organization. With the
increase operation efficiency, your cloud kitchen business will be able to give a
WOW experience to your customers. By gaining happy customers, your revenue will
increase. With increase in sale, your unit fixed cost will decrease and you will get
better economy of scale. This economy of scale, in turn will help you to have
increase profitability & better ROI.
Effective Delegation: To manage your cloud kitchen operation efficiently, you have
to bring in skilled manpower, train them and delegate the urgent & important work.
As a business owner, it is very important for you to concentrate on the most
important task that is increasing revenue generation. With delegation, you can do so.
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Marketing and Promotional Tips: Since Cloud Kitchens have no such physical
outlet, the marketing needs of a Cloud Kitchen are very different from those of a
regular restaurant. Since there is no outlet where the customers can just walk-in, a
cloud kitchen permanently loses out on visibility. Here are some things that you can
do to market your cloud kitchen.
(i) Have An Online Presence - Given that the Cloud Kitchen model negates any
physical presence, you must build an online presence for yourself. This will give your
restaurants a virtual address and enable customers to find you with ease. Having a
website and different social media pages will not be enough. You will have to update
them regularly and make them as interactive as possible, as that is the only medium
through which your customers can reach out to you. Listen to them there, talk,
participate in comments and address any negative feedback there and then. Your
followers are your most loyal customers, remember that.
(ii) Third-Party Integrations - Most people today order using online apps like
Zomato, Swiggy and Foodpanda. Your integration with them is a must. Being on
these platforms will get you more orders for home delivery, and because they have
their delivery mechanism, the cost of delivery will not be out of your pocket. Apart
from that, being on these platforms will also make you discoverable to your potential
customers. Most people who order through these apps do not know whether they are
ordering food from a restaurant, a delivery-only kitchen, a ghost kitchen, or a cloud
kitchen. What they do know is that if the food looks good, they can try a new place,
so get yourself integrated with all the delivery platforms out there to enjoy large-scale
discoverability.
(iii) Tie-ups with Complimentary Restaurants - To build your brand

presence and to make people try your food, you could get into tie-ups with other
restaurants who are not your direct competitors. For example, if you run a Cloud
Kitchen with a dessert brand, you could tie-up with restaurants not having their
dessert menu with schemes like, buy a meal for two and get a choco-lava cake free.
When someone does so in the restaurant, the cake will come in your brand‟s packing
with a pamphlet of your restaurant. This can be extended to online orders as well.
Not just other restaurants, you can run such promotions within the brands in your
own cloud kitchen. If you run a Mexican restaurant in a Cloud Kitchen format and are
introducing a dessert bar under a different brand name, you could have the same
scheme tied up to your own Mexican brand.
(iv) SMS and Email Marketing - SMS and Email Marketing though not that new,
are still as valid when it comes to marketing a Cloud Kitchen. In fact, sending your
regular customers messages with exclusive offers and emails with your new menu
items or contests that you are planning to run will keep you fresh in their minds. As a
Cloud Kitchen, your more modern menu innovations may just get missed because
people order from cloud kitchens with a specific dish in mind. SMS updates
regarding new dishes that you have added to the menu, schemes that you are
running for these dishes, or codes to get complimentary recipes with the next order
will keep your customers updated, and orders will keep pouring in.
(v) Distributing Flyers and Pamphlets - Just because Cloud Kitchens are
online, it does not mean that offline marketing is not an option for Cloud Kitchens.
Remember, a considerable amount of orders come to a cloud kitchen through
regular calls.
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To promote this channel of ordering and creating an identity among people who do
not belong to the internet generation, flyer and pamphlet marketing is the way to go.
You can distribute flyers that double up as your menu and leave your website link
and phone number on it. Families mostly preserve these flyers and use them when
they are ordering next.
(vi) Newsletter- Once you‟ve obtained your customer‟s email address, you can
email them on a weekly or monthly basis to keep them updated about new offers or
meals on your menu. This can help to remind them to order again or to get them
engaged with a special offer, to name just a few of the possibilities.
(vii) Influencer Marketing - One of the important restaurant marketing ideas is

influencer marketing. In this, you get in contact with influential personalities like
chefs, food bloggers to market your restaurant You can search for relevant
influencers online to market your cloud kitchen on various social platforms.
(viii) Menu Management - Keep your menu attractive with pictures, accurate
product descriptions and unique names for meals or combo deals. Apart from the
visual aspect, aligning your menus on your website and other platforms is important.
When using multiple third-party delivery platforms, some can help you easily manage
your menus on all different platforms from one place.
(ix) Reward & Loyalty Programs - If you want to increase your online orders,
then you need to reward your existing customers. Reward your loyal customers
through loyalty programs and give them an extra bonus when they place an order.
This way, whenever they feel like ordering food, your delivery kitchen‟s name will
strike them.
(x) Customer Feedback - Keep your customers happy and provide them what
they want. Encourage your customers to share their food experience online.
Respond to their comments and re-post or share their valuable feedback.
(xi) Managing Reviews - It‟s important to keep your customers happy and
reviews can give you immediate feedback. Some of your reviews will be immediately
actionable: if a customer is unhappy because the food was cold when he got it, you
might want to do something about your packaging. If someone commented they
thought the salad had too much dressing, you may want to consider putting your
condiments in a separate compartment. What your customers say about you online
matters to your potential customers. Therefore, it‟s important to reply to your
reviews – especially if it‟s a bad one. Replying the customer, explaining what went
wrong or just letting them know you‟ll do your best to do better next time, can really
let your (potential) customers know your business really cares about its clients.
(xii) Customer Retention - When you own any kind of business, your aim is to build
a strong relationship with your customer. This is also called customer relationship
management. From the moment a customer has ordered their first meal, you are left
with information like their email address and/or phone number. You can use these
channels to let your customers know you have a new menu, a holiday offer or any
other news that will be of interest to them.
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ANNEXURE- V
PROVEN TIPS TO BOOST THE SALES OF CLOUD KITCHEN BUSINESS
Running a Cloud Kitchen business has either its opportunities or pitfalls and any
brand in this domain is bound to face both in equal measure. The key is to simply
navigate through them with clear business goals, unique value proposition, prudent
use of capital and technology and unmatched customer experience. To increase
sales, a powerful Sales Strategy is required and here are few quick tips in this
regard;
1. Offer Something Unique : Since restaurants are cropping up like swarms of

locusts everywhere, you must provide your customers with something that others in
your area are not. Select a cuisine that is new to the locals of your vicinity. For
example, if there isn‟t any place to satiate the taste buds of your customers with
some mouth-watering North-eastern cuisine, then you can try and introduce this
cuisine to the people. Unless you can offer people something out of the box, why do
you think people will choose your cloud kitchen over other restaurants?
2. Do Not Compromise On Quality : While quality remains one of the main

things that helps retain customers, it is needless to say, that its importance is even
more in a cloud kitchen. This is because, since it is a cloud kitchen, people generally
expect home-cooked food, whose quality is exceptionally high. Unless you can make
your customers feel that they are eating from their own kitchen, you can hardly
expect them to come back to you.
3. Integrate With Online Delivery Platforms : Delivery is the main thing in a cloud
kitchen; hence it is very important for you to have the right personnel in place.
Instead of just relying on your in-house delivery boys, integrate your cloud kitchen
with the various online delivery platforms. This will not only help you to get a better
online presence and make you more credible but will also help you to come right in
front of all your potential customers who might be hovering on these platforms like
Zomato, Swiggy to quench their hunger. Moreover, delegating the task of delivering
your food to the doorsteps of your customers to these delivery agencies will reduce
the wastage of a lot of your energy and resources, which you can then use to bolster
your cloud kitchen further. With the ongoing Covid outbreak and the spur of online
food delivery, the growth of the cloud kitchen has been commendable. The recent
changes in the restaurant fraternity have clearly shown that the cloud kitchen format
is on a steady rise. The model is expected to be a significant factor in augmenting
online delivery even more.
4. Advertise Well : A cloud kitchen has no physical outlet, where customers can
walk in and dine at. There are no signage or display boards that can attract the
people passing by to the restaurant. Hence, unless you advertise well enough, there
are chances that people will not even be aware that you have started this fantastic
kitchen of yours. The ways in which you can advertise your cloud kitchen
business are:
 Take Part in Events: If any food festivals happening in your city, set up a stall
there and let people taste your food, and spread the news of your arrival through
word of mouth.
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 Catering in events can help you catch the attention of many: Catering at local
organizations‟ events will help you to come into the limelight. Be these events be
anything, from Independence day celebration in your locality, a local sports event,
to school carnival, if you can provide some tantalizing food to the enthusiasts in
these events, they will surely come back to you.
 Social Media Presence is a Must: In today‟s time, if you want to get in touch with
all the potential customers out there, you must have a strong social media
presence. Create your social media pages and post tempting mouth-watering
images and videos of your food items to attract customers.
 Food Ordering App: You can either build your own food ordering app or set up
an account on delivery platforms such as Deliveroo, Uber Eats, Takeaway.com.
Your customers will order mainly through mobile devices, which have overtaken
desktop.
 Advertise on Online Food Aggregators: Online Food Aggregators such as

Swiggy and Zomato provide a marketplace of restaurants to your customers.
Therefore, aggregators are critical for generating online orders. However, the
competition is very tough; even online. You need to promote your cloud kitchen on
these apps and websites to reach out to your customers.
 Run Online Ads: Running paid campaigns on online channels is a great way to
boost your cloud kitchen sales. You can run an advertisement on Google and
social media platforms to reach out to your potential customers. Remember to
include a Call-to-Action in the advertisement banners which leads your customers
to your cloud kitchen‟s online ordering landing page or to your online food
aggregator listing.
 SEO & GoogleAds: You need to optimize your website for search engines. Good
SEO practices will fetch you more organic traffic. Also, test your Adwords and see
which keywords are being searched. Google Adwords will cost you some money,
but it will be worth to spend. Take the help of a digital marketer and run your ad as
per your budget.
 Online Referrals: Try to create as many positive referrals as possible on different

platforms. This allows your business to get found more quickly online. Google
reviews, Facebook reviews, Instagram referrals and so on. They all get your
company brand out there.
 Analyse your Online Traffic: Moving forward with your business is all about
really getting to know your customers. Analyze your customers‟ area,
demographics, likes, and dislikes. Once you have the right information about your
customers, you can create meaningful promotions and target them with the
appropriate information through the right communication channel. This will help
you retain customers and engage with new customers.
Getting your brand out there is very important. You can have the best food in the
world – if nobody knows about it, it won‟t sell. Make sure you take all of these above
aspects into account when running your Cloud Kitchen.
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ANNEXURE- VI
CLOUD KITCHEN PROMOTIONAL IDEAS DURING COVID TIMES
Famous proverbs states, “Necessity is the mother of invention.” We are seeing this
wisdom bear out in real time as Cloud Kitchens/Restaurants race to adapt to the
COVID-19 crisis. This pandemic is illustrating both the resolve and inexhaustible
ability of restaurants to innovate and find new business avenues as they shift their
entire sales models overnight. So, several cloud/dark kitchens have risen up to the
occasion and are adopting stringent food safety measures and have also modified
their menus by adding healthier options. Here are some of the most creative
promotional ideas and promos we‟ve seen marquee cloud kitchens adopting in
recent times:
Unconventional and Healthy Foods in the Menu - With nutrition issues

increasingly occupying the headlines in India, the need for innovative and multi-
sectoral action is greater than ever especially during Covid times where immunity
has become the new buzz word. So, a lot of brands are altering their menus and
adding healthier food options. If you think of momos as the forbidden fruit, post
lockdown-Momo King is here to change this belief. The Himalayan momo chain has
introduced a number of healthy items on its menu without compromising on taste.
Apart from the regular comforting Darjeeling and Nepali momos that they have
including the wide range of Thukpas, Kothey, Cholia and Laska, the new range of
healthy momos that have been introduced are definitely the need of the hour.
Creative Corona-virus Specials - Kitchens are speaking to their customers‟ current

experiences with specials and promotions tailored to the lockdown. Everyone needs
a bit of levity right now and specials like Quarantine Kits, Lockdown Lunches, Social
Distancing Desserts and Stay Home Package help distinguish the takeout. Some
restaurants have taken it a step further by including sanitizers and other essential
supplies with their orders. Not all dishes work well for takeout. Some meals can‟t be
easily packaged and certain foods will lose their heat or texture in transit. Cloud
Kitchens have adapted to the problem by creating heat-and-eat dishes. These
dishes can be frozen or refrigerated, prepared in quantity ahead of time, and sold via
delivery. They‟re a great work around for restaurants who never considered takeout
when planning their menu.
Meal Kits - Cloud kitchens have taken the heat-and-eat option a step further by
introducing meal kits. They‟re deconstructing their favourite dishes, packaging the
ingredients with instructions and delivering them as meal kits to their hungry
customers. Not only are meal kits a fun divergence from typical takeout fare, they‟re
generally more cost-effective for the average family looking to feed four to five
people.
Food Subscriptions - While meal kit services have become a fixture over the
past few years, the subscription service model represents all-new terrain for
restaurants. Prior to COVID-19, purchasing a meal subscription from your favourite
restaurant did not even exist as a concept except Eat.fit and a few other brands.
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Now, it has become the latest innovation in a yearlong shift away from tradition
restaurant sales towards takeout. Customers sign up for a plan with their favourite
restaurant, and their meals are delivered or picked up at a predetermined time.
Subscriptions provide business with steady, reliable income amidst all the
uncertainty.
Wholesale Ingredients - With mere hours to collect themselves after the closure
orders were sent out, many restaurants are reckoning with what to do with surplus
inventory. To move the inventory before it spoils, several restaurants have started
selling their ingredients in bulk, either to other business or directly to the consumers,
sometimes right from the store.
Hashtag Movements - At this point, you‟ve probably seen them on social

media: #Takeout Tuesday #Takeout Takeover #Carryout Wednesday #The
GreatIndia Takeout. Participating in national hashtag campaigns can amplify the
brands and help them reach new audiences. Over the last three weeks, companies
have created hundreds of free social media posts to help restaurants with their
messaging and promotions through the Corona-virus.
Meal Donation - Meal donations are becoming more popular as people reckon
with how to best support local communities and their favourite restaurants. Meal
donations are a great way to accomplish both. Some kitchens have switched over
completely to a donation model, where every meal purchased goes to medical first
responders, out-of-work food service employee‟s at-risk communities, and anyone
else on the frontlines fighting against COVID-19. Other restaurants have used a “Buy
two meals, we donate one” promotion to help give back while maintaining some
normal sales.
Pandemic Precautions - While safety and hygiene have always been important in
the food industry, you should now give extra importance to this, if you want your
business to thrive. You have to do a temperature check daily on all kitchen and
delivery staff. The staff should wash their hands at regular intervals, and sanitise the
kitchen frequently.
Conclusion
Regardless of how they choose to promote their brands, it‟s important to market it
across all the channels. They are catching customers where they‟re comfortable on
Facebook, Instagram, email, your website, Pinterest and any other online presence
they maintain. It will help the brands big time to promote among the right customers.
XXXXXXXX
Page | 43
PROJECT REPORT/ BUSINESS PLAN
This Detail Project Report (DPR)/ Business Plan has been developed in a well-structured PDF Format (Easy to
Download, Convert into MS WORD through www.smallpdf.com, Edit for Personalised Customisation and
Finally Printing the Report) to be presented as a Ready Project Proposal immediately under any Central/State
Govt. Self-Employment Schemes including PM-MUDRA Yojana, Mukhya Mantri Mahila Udyami Yojana, Mukhya
Mantri Yuva Udyami Yojana, CMEGP-Mukhya Mantri Yuva Swarozgar Yojana, Yuva Udyamita Protsahan
Yojana, Bangla Swanirbhar Karmasansthan Prakalpa, Stand-Up India Scheme, MSME/PSB-59 Minutes Loan
etc. as well as Business Loan Schemes under SC-STs/PSU Banks/ NBFCs/ MFIs/Private Banks thereby saving
precious time of the promoter in the process of completing requisite formalities in anticipation of setting up the
business project.
The Report so presented assumes an ideal scenario of an economy sized unit but flexible provisions are there for
editing, customising calculations, modifying estimations as per personal preferences. Accordingly, following Project
Templates has been deliberately left blank in order to facilitate customisation by the perspective entrepreneurs based
on personal requirements and furnish necessary information on actual basis.
 Project at a Glance : To be Filled Up as per Personal Requirements.

[Total Capital Expenditure, Working Capital, Estimated Cost of the Project, Amount of Bank Loan, Amount of
Equity Capital and Amount of applicable Margin Money Subsidy – (Urban/Rural /General Category/ Special
category)].
 General Information and Location : To be Furnished in the Blank Space.

[Name of the Unit/Firm, Address of the Proposed Project Location, Size of the Space Available and Occupancy
under Ownership/Lease Agreement].
 Promoter’s Background : To be Furnished in the Blank Space.

[Name of the Promoter, Age, Communication Address, Educational Qualification, Work Experience and Special
Training Attended, if Any].
This Project Report/ Business Plan covers all the important aspects of the Project containing Highlights of the Project,
General Information and Location, Promoter‟s Background, Project Introduction, The Project Proposal, The Products,
Prospect for Investment, Potential Target Customers/Market, Market Entry and Marketing Strategy, Critical Success
Factors, Process Details and Technical Solutions, Installed and Operational Capacity, Quality and Standards, Raw
Materials and Consumables, Power and Utility, Tentative Implementation Schedule and Basis & Presumptions. The
Financial Aspects contains Capital Investment Estimates with detail project economics, Computation of Working Capital
Requirement, Estimated Cost of the Project, Proposed Means of Project Financing, Estimated Annual Sales Turnover,
Projected Profitability Statement, Calculation of Interest Amount, Depreciation Schedule, Term Loan Repayment
Schedule, Debt Service Coverage Ratio, Break-Even Analysis, Projected Cash Flow Statement, Projected Balance
Sheet, Internal Rate Return and Payback Period.
The presentation supplements with useful information (In Annexure) namely Statutory Permits and Business
Licenses Required for Cloud Kitchen Business, Basics of Cloud Kitchen Business, Beginner’s Guide to
Start Cloud Kitchen Business, Smart Tips to Follow for Successful Cloud Kitchen Business, Proven Tips
to Boost the Sale of Cloud Kitchen Business and Cloud Kitchen Promotional Ideas during Covid Times.
The Report contains detail requisite information to quickly start with the various time consuming government formalities
connected with planning and commercial operation of the proposed business project. Following are some of the
indicative areas where the same may be utilised as a Project Document;
Term Loan/Cash Credit NOC from Local Body

Industrial Estate/Commercial Space NOC from Fire Service
Pollution Control Board Trade License
Water and Power Connection GST Registration
Safety and Health Certificate MSME Udyam Registration
Labour Welfare Clearances Foreign Trade License
Employee PF and Insurance Clearance for Location
BIS License/ Factory License Land Conversion
FSSAI License/Drugs and Cosmetics License Pre Construction Permission
Drugs and Cosmetics License Post Construction Clearances
This would help in identifying in advance the infrastructure/resources required for the Project and approach the
concerned government agencies accordingly. Hence, it becomes a complete document for further action towards
realising the dream of becoming an entrepreneur.

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CLOUD KITCHEN

[DOOR-STEP FOOD & BEVERAGE DELIVERY SERVICE]

PROJECT REPORT/BUSINESS PLAN

Sl. Particulars Description

2. Constitution (Legal Status)

3. Father‟s/ Spouse‟s Name

Taluk/ Block: __________________________________

Margin Money Subsidy

8. Debt Service Coverage Ratio

9. Pay Back Period

10. Project Implementation

Date: Signature of the Applicant

ANNEXURES CONTENT Page

ANNEXURE-I STATUTORY PERMITS AND BUSINESS LICENSES 23-24

ANNEXURE-II BASICS OF CLOUD KITCHEN BUSINESS 25-30

ANNEXURE-III BEGINNER’S GUIDE TO START CLOUD KITCHEN 31-35

ANNEXURE-IV SMART TIPS TO FOLLOW FOR SUCCESSFUL CLOUD 36-39

ANNEXURE-V PROVEN TIPS TO BOOST THE SALE OF CLOUD 40-41

ANNEXURE-VI CLOUD KITCHEN PROMOTIONAL IDEAS DURING 42-43

HIGHLIGHTS OF THE PROJECT

Sl. Particulars Description

1. WCL/CC on First Year Rs. 75,000.00

1. GENERAL INFORMATION AND LOCATION :

Name of the Unit/

Size of the Space

4. THE PROJECT PROPOSAL :

The proposed project is that of setting up of a Cloud Kitchen at the proposed

 Preparation of Food Items and

6. PROSPECT FOR INVESTMENT :

7. POTENTIAL TARGET CUSTOMERS/MARKET :

8. MARKET ENTRY AND MARKETING STRATEGY :

8.2. Marketing Strategy : Since Cloud Kitchens have no such physical

 Promotion : A considerable amount of orders come to a cloud kitchen

9. CRITICAL SUCCESS FACTORS :

 Saving on Infrastructure Cost.

The Promoter is technically well-informed to undertake the proposed venture and

10. PROCESS DETAILS AND TECHNICAL SOLUTIONS :

The process flowchart of a Cloud Kitchen is as follows;

Step 1. Orders are received from the Customers.

Step 2. Kitchen-In-Charge notes down the Order details.

Step 3. Food is prepared as per the Orders and Instructions.

Step 5. Finally, Packed Food Parcel is delivered to the doorstep of Customers.

10.2.1. Managing Inventory : Managing the inventory in a Cloud Kitchen

10.2.3. Fresh Quality/Timely Delivery : Delivery system needs to be quick,

11. INSTALLED AND OPERATIONAL CAPACITY :

Sale of Packed Food Parcel - 50 Customers Per Day

12. QUALITY AND STANDARDS :

12.2. DELIGHTFUL CUSTOMER SERVICE: Cloud kitchen can deliver exceptional

12.3. ENERGY CONSERVATION: Proper care should be taken in running the

13. RAW MATERIALS AND CONSUMABLES :

13.1. The major consumables required are as follows;

1. Inventory Stock (Food & Beverages) and

Above Consumables are easily available locally.

14. POWER AND UTILITY :

Kitchen Equipment‟s - 5.22 KW

General Lighting - 0.70 KW

15. TENTATIVE IMPLEMENTATION SCHEDULE :

ACTIVITIES TIME PERIOD

Repairing Work/ Arrangement of Finance

Placement of Order for Equipment‟s,

16. BASIS & PRESUMPTIONS :

16.9. Insurance charges have been considered Lump Sum.

16.10. Repair and maintenance expenses have been calculated reasonably.