ERP Systems: Understanding Implementation Cost Factors
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It is hard to deny the fact that the food delivery market has seen an all-time surge in recent years.
An increasing number of people order food online rather than cook at home.
According to a recent study, the food delivery market will be worth $370 billion by the end of this decade and the UAE will be one of the major contributors to this market.
This has increased the popularity of cloud kitchen POS system in Dubai.
It is believed that the annual growth rate of the food delivery segment in the country is about 6%. And this pace will remain steady for the next few years.
Contrary to what we see in many other countries, the cloud kitchen will be the most popular food delivery model that UAE will see growing at an exponential rate in the coming year.
Cloud kitchen/restaurant is a virtual entity that works with minimal infrastructure. It means there is no physical restaurant by that name where people can go and dine in.
Instead, they can order food from these virtual restaurants and get them delivered to their doorstep. Cloud restaurants extensively use POS restaurant software.
Cloud kitchens usually have a website, smartphone application, or hotline number through which prospective customers can place their orders.
Many cloud kitchens also collaborate with online food delivery services such as Uber Eats, Deliveroo, Doordash, and more.
Using a third-party food vendor service is found easier by many as it helps them start doing the business even before investing money in creating their presence and building their brand value.
If you want to start a restaurant business in Dubai or any other part of the UAE, you will be required to chip in a huge amount of money to rent out the space, furnish the building, and many other things.
Moreover, with a conventional type of restaurant, you will have access only to the people who happen to visit your restaurant. This is not the case with a cloud kitchen.
Cloud Kitchen guarantees a high-profit margin while requiring very low investment from you.
The cost of running a cloud kitchen is much less compared to a traditional restaurant setup.
Also, the risk factor is very low with cloud kitchens. For instance, you can’t expect the same amount of footfall to your physical restaurant throughout the year.
You may experience a spike during certain days or seasons or experience an unprecedented dip in sales when a new restaurant is launched in a nearby area.
With setting up Cloud Kitchens in UAE, such risks are minimal.
Another great beneficial side of starting a cloud kitchen is that it enables you to run multiple brands or virtual kitchens simultaneously.
For instance, one for Indian cuisine, another for Chinese cuisine, or another for Lebanese cuisine. This will help you build a larger customer base in the long run.
Multi-brand kitchen models are adopted by many these days as they save them from unexpected financial losses in case one of the brands underperforms.
Given the relatively low installation expenditure, many entrepreneurs are attracted to this business format.
Still, there is a huge demand and scope for this business in many parts of the UAE. One of the best sides of cloud kitchens that many investors find extremely captivating is the possibility of scaling up the business with practically zero additional investment.
If you compare the total investment you will need for a cloud kitchen in comparison with a conventional restaurant format, the difference is about one-third.
What are the things one must consider for starting a cloud kitchen in Dubai or anywhere else in the UAE? Here is the checklist for your consideration.
While starting a Cloud kitchen, It is important that you go by the book when you do business in UAE.
It is important that you go by the book when you want to start a cloud kitchen business in UAE.
In order to start your cloud kitchen, you first need to obtain a license for it from the concerned government authority.
There are two different types of licenses you are required to hold – a food license and a trade license.
Make sure you have all the documents required for Cloud Kitchen before taking any further actions to save yourself from any kind of legal repercussions.
If you want to start a restaurant, you will look for a location that is accessible to your prospective clients.
If your restaurant is located in a less noticeable or closed space, you will not be able to generate much footfall.
And renting out a space in a highly accessible location will cost you a lot of money.
Cloud kitchen comes pretty handy and pocket-friendly at this point. You can set up your cloud kitchen anywhere you like.
In fact, if you want to start on a small scale at first, you can even think of setting it up close to your residence. If you have 300 to 400 sq. feet of space, that is enough to set up your cloud kitchen.
Similarly, you can think of renting out shared commercial kitchen spaces as you start.
Once you have established your name and have had enough hold in the market, you can scale up your operation.
You don’t have to recruit a lot of employees initially to work in your cloud kitchen.
In the beginning, you can start the operation with a minimal number of staff by hiring people who can multitask.
Once you have established a stronghold, begin hiring more employees gradually.
Also, you can people the same employees across multiple brands, if you are running your cloud kitchen business under two or more separate brands.
Having multiple different brands is a good way to maximize your sales.
You will be requiring two different types of equipment for your ghost restaurant – cooking equipment and packaging equipment.
In addition to that, you will need a few basic pieces of equipment such as a refrigerator, vessels, storage facilities, etc.
When it comes to cooking equipment, it is important to have a basic study about the type of food items you are going to sell.
For instance, South Indian, North Indian, Arabic, Philippine, Chinese, and more.
People will identify your brand by the way you pack and serve the food. So, it is important to invest in standard, superior quality, and attractive packing containers or boxes.
Do not go with cheap quality and sub-standard plastic containers in order to cut down the cost.
It will not only distance your customers from your brand but also will put you in legal hassles.
Also, make sure that you choose the right type of packaging as per the cuisine and provide additional supplies such as spoons, tissue paper, etc.
By prioritizing improving the customer experience, you can quickly win their approval and have them as your reliable advocates.
If your customers enjoy high-quality food at a reasonable rate through your service, they will certainly encourage their friends or family to order food from your brands.
Cloud kitchen runs on technology. So, it is imperative to integrate the right technology such as POS Restaurant Software with your business.
From order management to delivery management, you will be depending on modern technology. Here is a list of modern technologies you will be needing in place.
While running a cloud kitchen, you can’t prepare the food in advance, store them and serve it when you receive orders from your customers. You may be required to prepare some of the dishes in real time and serve them.
Unless there is an integrated kitchen display system that shows the orders by category, delivery time, and location, you can have the entire operation run smoothly.
People will order your food via different terminals -via your website or app, through the app or hotline of online food aggregators etc.
All these orders must be processed into a centralized system so that you can get them ready and hand them over on time.
An integrated restaurant POS software in Dubai will make this both simpler and more organized.
People are more likely to trust your brand if you have created an online presence.
So, invest in developing a website and mobile app. This can be done even in the later stage of your scaling up.
If you want to continue your cloud kitchen business for the long term, a dedicated website and a mobile app for both Android and iOS operating systems are mandatory.
While running a ghost kitchen, it is possible to have your orders delivered either by your in-house delivery agent or have it done by using the delivery capacities of third-party food aggregators.
In either scenario, it is necessary to coordinate the deliveries. Manually doing it can be both time-consuming and lead to human errors at times.
In this context, it is recommended to use an advanced delivery system. If you are using the right type of restaurant software in Dubai, you will not have to worry about this.
Have a dedicated hotline number to which your customers can ring up and order food.
Make sure that you can attend the calls without delay and process the orders straight away.
Once you start your business operation, you can’t afford your stock to run out.
To avoid that, an effective inventory management system is needed in place.
By using a reliable inventory management system, you can keep real-time track of your stocks and have them refilled on time.
The advantage of starting a Cloud kitchen is opportunities for growth, simplicity to handle, a sizable audience, and infrastructural savings.
Understanding how Cloud Kitchen works is another crucial element in managing a cloud kitchen.
As one of the fastest evolving and developing countries in the world, UAE is the first to experiment with innovative ideas.
Cloud kitchen has been well-received in the country. So, it is one of the best venues for your investment.
The information and checklist shared through this blog should help you do the right preparation and pick up the most effective restaurant software in UAE before starting your cloud kitchen.
If you need further help you can you can contact EBR Software, one of the leading ERP systems solutions company in Dubai, on your journey to implement software for your cloud kitchen.
Feel free to explore our comprehensive blogs for detailed insights on setting up a cloud kitchen in Dubai. We’ve covered all the essential aspects you need to know about!
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