Cloud kitchens have become increasingly popular in Malaysia over the past few years as more and more people embrace ordering food online. Sparked by the COVID-19 pandemic, the rise of these kitchen spaces has led to many restaurant owners deciding to jump on the bandwagon to cut costs and maximise profits.
With demand surging, we, at KitchenConnect, have whipped up an all-encompassing guide for the costs of opening a cloud kitchen in Malaysia.
What are the main costs of your cloud kitchen?
The main costs associated with a cloud kitchen can be split into multiple facets. But, it’s necessary to be wary of each one, especially when preparing your business plan, as it will give you a clear insight into how much capital you will need to get your business off the ground and running.
- Kitchen size
- Kitchen equipment
- Number of employees
- Marketing needs
- Technology required
- Ingredients
- Insurance
- Licences and permits
1. What size kitchen space do you want?
Prior to selecting the kitchen space you want, you need to take a step back and think about whether it will meet the needs of your business and enable you to run your operation smoothly. When searching for a cloud kitchen unit, you can choose to do this on your own or approach one of the many suppliers, such as KitchenConnect.
New business owners or restaurants in their infancy are recommended to choose the latter as our facilities are situated in some of Kuala Lumpur’s most well-known and high-traffic areas, which means there are plenty of orders to keep you busy. Be warned that even though a specific location may look enticing to you, it is imperative to do your research and ascertain whether the cuisine your restaurant specialises in will be a hit with the customers in the area.
It is also essential to pick the right cloud kitchen size as you will have to keep the cost in mind when agreeing to rent the space. Our kitchens in Malaysia are about 123 square feet on average and need a financial investment of MYR 39,000. This is a whole lot less than brick-and-mortar restaurants, which are approximately 1,800 square feet and require a cash injection of MYR 750,000.
2. Kitchen equipment
One of the main costs you will incur when launching a cloud kitchen is the equipment you will need to create the delectable delicacies your restaurant serves up. Our kitchen units come with the necessities you need, but you will have to purchase other apparatus needed, such as pots, pans, fridges and freezers. Don’t forget about specialist equipment that you might need to prepare traditional dishes for certain types of cuisine. Since it is easy to get carried away when buying kitchen equipment, it is recommended that you have a budget in mind and stick to it.
On top of your kitchen equipment, you will also need to pay for the utilities, such as electricity, gas and water. A tablet will also be required to keep track of all your orders, but our app ensures this process is streamlined as you can view everything that comes in, even when you work with numerous food delivery companies.
3. The number of employees
To make incredible food, you will need a dedicated and motivated team of employees. How many staff members you need though, depends on the number of orders you expect to fulfil on a daily basis. Cloud kitchens in Malaysia generally have a workforce of 2 to 3 people, but the cost for this is nowhere close to regular restaurants as they need around 10 to 12 employees. Put it this way, start with a small team and gradually grow it when there is increasing demand for your food.
4. Your marketing needs
Many restaurateurs completely forget about this cost during the process of opening a cloud kitchen. Since marketing can help take your business to incredible new heights, you need to determine which channels you will utilise to spread the word and get your eatery out to a wider customer base. The following should be part of your marketing strategy.
Logo – You can do this on your own or have a company or freelancer design it for you. Just remember that your logo should stand out as it can end up becoming one of the key ways your restaurant is recognised.
Website – A user-friendly website is integral for any F&B business, especially since people will want to get to know your brand. You should include an online menu, an inspiring origin story and easily accessible contact information so your patrons can reach out to you. Some of the best platforms to build a website include WordPress and Wix, especially if you aren’t particularly tech-savvy. It is advisable to purchase a domain name as it will help make your URL look professional.
Social media accounts – You will need to have accounts across all the social media platforms people are extremely active on. In addition to posting regular content, you may opt to set some finances aside to boost posts or launch ads so that more people become aware of your business.
Photography – You may be thinking that you can do this with your phone or a simple camera. But this couldn’t be further from the truth. Food photography needs to be done by professionals as they will know how to capture the essence of your dishes and encourage people to order from your eatery.
Digital advertising – Regardless of whether you choose to advertise on Google or some of Malaysia’s top food delivery apps, such as GrabFood or Foodpanda, digital advertising is a cost you will need to be aware of when setting up your cloud kitchen.
5. The technology required
When moving into a cloud kitchen, it is essential to have the right technology in place that enables you to fulfil your orders with ease. Given how important technology is to your business’s operations, this is an area where you can’t afford to cut corners when it comes to costs. At our facilities, we have state-of-the-art food technology software that provides in-depth information about different aspects of your business. Whether it’s managing orders, compiling reports or finding out which dishes are the most popular, our technology provides all the information you need.
6. Don’t forget about your ingredients
You will need top-quality ingredients to create finger-licking food that wins you a loyal fan base of customers who place orders regularly. Since it is easy to get carried away when purchasing ingredients, you should have a budget on hand and abide by it so that your costs don’t surge through the roof and adversely affect other business aspects of your cloud kitchen.
7. Insurance is a must
All businesses require some form of insurance when operating, so this is a cost you cannot forget about when launching your cloud kitchen. Most likely, you will require employer insurance and public liability insurance so that you are protected in cases of employee accidents, workplace mishaps or customers who take legal action upon getting sick after eating your food. Luckily, when renting out one of Kitchen Connect’s units, the pricing includes insurance. This will, no doubt, give you peace of mind as you know you will be insured should unforeseen circumstances arise.
8. What licences and permits do you need?
Businesses in Malaysia also require licences to operate, so it is essential that you do your research properly to ensure you have all the necessary permits. This cost should feature on your cloud kitchen business plan as it will ensure you don’t fall afoul of the law. Should you need further information, please refer to our in-depth blog.
Other expenses
1. A comprehensive marketing plan
Once your restaurant starts to gain traction and see a surge in orders, you will need to develop a marketing plan to ensure you keep reaching a wider audience. In order to accomplish this, you should do the following:
- Prepare a social media plan
- Work together with well-known influencers
- Create a loyalty program
- Give customers rewards for referrals
- Have regular promotions
- Targeted ads
2. Data analysis
Data analysis is an increasingly integral process many businesses use to attain vital information. In an F&B setting, it can help you gain a better understanding of your customers and pinpoint what their pain points are, along with why they may opt to order from your rivals. While the costs associated with data analysis can be high, it can provide a wealth of information that enables your cloud kitchen to become more profitable. That being said, you need to decide whether this is a top priority when moving into your kitchen space.
Through the use of data analysis, you can learn about the following:
- Your customers’ ordering habits
- The types of ad campaigns that are the most successful for your business
- The best-selling dishes on your menu
Ready to start your cloud kitchen adventure?
It’s clear that there are numerous costs associated with opening a cloud kitchen in Malaysia, but they don’t come close to the amount needed to operate a traditional restaurant. Furthermore, cloud kitchens break even in 6 weeks, while regular eateries only achieve this in 48 weeks. This is why these types of kitchen units are growing in popularity within Malaysia’s F&B sector.
Intrigued by the prospect of opening your own cloud kitchen? Fill in the form below to get in touch with us!