In the midst of the pandemic, restaurant industry is hitting slammed. Restaurants are closing left, right and center, which is why a lot of people are looking for alternative solutions such as virtual kitchen. Now, what is a virtual kitchen, Wilson? Virtual kitchen is basically delivery only kitchen. There's no need for a dining room. There's no need for front of the house, which means you save a lot of money. And that's why this concept is so in demand right now. Today, we're going to be shooting a video on how you can start up a virtual kitchen concept from the ground up. Let's go check it out. First step in building a thriving virtual kitchen is to know your customer. This is no different than running a traditional restaurant. Actually, this is even more important right now because we lack a stream of revenue, which is the walk-in traffic. Now, why is knowing your customer super important? It is because if you create a concept that has no demand, then it doesn't matter how great your items are. People are just not going to order from you, which is the reason why it's so, so important for you to identify who is it that will be buying from you within this demographic and within this area. Now, how do you define your customer demographic? It is by knowing exactly how their spending habits are. What is their disposable income? What is a job that they do? Where is it that they hang out online? Is it TikTok, LinkedIn, Facebook, Instagram? Knowing these will allow you to target them and to market to them with the same language, so then that way that builds trust and in turn people will buy from you. For example, if your virtual kitchen operation is located around this area, where it's highly dense population, not a lot of grocery shop around, and people are just office people that just don't want to buy food, they get home around 7pm and they're just tired. All they're wanting is to order some comfort food. Comfort, easy to eat, healthy food. If this is the type of demographic that you're going after, you would not serve greasy burgers that are really messy and just doesn't make you feel good. You want to offer something that's healthy, something that's soupy, and something that actually caters to this demographic. Next up is to pick a concept. After you identified your target demographic, you need to pick a concept that fits your target market. At the end of the day, if you are to build a concept that has no demand, once again, it's not going to work. Which is the reason why you need to identify a concept that has a proven demand. How do you do that? It is by surveying around the community that you're planning to host your virtual kitchen. When you're surveying, look out for restaurants that are high in demand, that has line up out the doors, that have a lot of orders, that are just plainly busy. By you locating that and identifying it, that has a proven demand for that specific concept. For example, fried chicken. People love fried chicken and in this area, this is one of the most popular fried chicken spots out there, which gives you a cue that people are receptive to this concept. So if you were to create something similar for your ghost kitchen concept, then you can do something similar, fried donuts, or something that is deep fried, and something that is a comfort food that allows you to really tap into the same target market. As an additional point, something that you could also do is start surveying people around the area. By you eyeballing different competitors and their demands, that gives you a good insight. However, to truly validate the concept and the demand, you can actually go out in that demographic and that area to actually have surveys of giving people different items that they would order and see what they choose. And by you doing that, that also increases your chance of creating a thriving virtual kitchen. Next up is knowing your menu and setting your menu item so that way it is good for the virtual kitchen concept. This is by far the most important step for you, because a lot of restaurants and a lot of chefs and a lot of operations do not take this into their consideration. Because typically food is created and it's served to people on the plate within a few minutes. But whereas when you're running a ghost or virtual kitchen concept, food travels in enclosed container. And on top of that, it usually travels for 30, 40 minutes long, which is the reason why you need to pay true and close attention to the characteristics of your food item. So then that way, when your customers receive it, it is in good shape, it is in good quality, and that way they will order from you again and again. Something to also consider with your menu item is to create things that are high in margins because when you're working with third party delivery apps, oftentimes they take 20 to 30% cut, which cuts right into your margins. So for typical restaurants, this is a business that doesn't work. Whereas because you're running a virtual kitchen, you don't have the labor expense. You don't have the high rent expense, which allows you to account for these things into your menu item. Now that we've identified the customer we're serving, the menu and the food concept, next up is choosing the right location. Choosing the right ghost kitchen, virtual kitchen location is really crucial to your success. Like I said, again, you need to choose a location where your customers are hanging out. The density needs to be high enough so then that way you would have enough orders. At the end of the day, it is a game about supply and demand. When we're choosing this virtual kitchen location, we need to ensure that they're fully licensed, that they have all the different license to you to operate the kitchen out of. Because if you operate out of a legal kitchen, most likely your business will get in trouble and we don't want that. Which is the reason why you need to make sure they have all the license you need in order for your ghost kitchen to work. Another point that I want to make is to choose a location that has ample parking space. If you choose a location that doesn't have enough parking space, third party app drivers would not like to come as often or as promptly. And in turn, the delivery time to your customers would suffer as well. Which is why we definitely see that there is an increase in people taking the orders when the location is convenient and has parking space. Now depending on the virtual kitchen that you sign up for, there are different cost structures. Some of them would have a dedicated spot specifically for you if you need it all the time. Whereas others, you'll be using it at different times and you'll be sharing with three or four even different tenants at different times. So then that way you can really maximize the number of hours that you need to be in here. And others have a monthly hourly cost altogether. Knowing the structure and knowing the flow and what is it that you want to offer allows you to structure and budget your cost accordingly. So then that way you would be able to run a profitable virtual kitchen. Another tip to look out for whether the management is in place or not is to look at the quality of the tenants. Is the place well kept? Are the tenants respectable? Do the tenants share the same types of values as you do? If for example the tenants inside a room, things are always everywhere. People are abusing the systems and their operations. Then this shows that the management is not really well kept. And that in turn allows you to see that's a big red flag about whether to choose this virtual location or not. So there you go. You're all set for your virtual kitchen concept. Go out there, test things, keep reiterating. This is a business that is fluid. It allows you to change the concept on the go. If your concept is not working, go out there, shift it up, change it up to something that truly works. And that's the beauty of operating your business from a virtual kitchen. Is your ability and flexibility to change concepts on a time? Do not be stubborn, do not be arrogant. The market will tell you what they're receiving, what is acceptable, and what is in demand. So there you go guys. I really hope you enjoyed this video and just want to give a major shout out to a great friend of mine, actually, who without him, this video would not be possible. So major shout out. He is one of the great guys that I look up to. And if you want to follow him for more cloud kitchen news, definitely subscribe to his blog in the link below. And did I even mention we created a new Facebook group just on cloud kitchen because of how popular and how many people are asking for this concept. So definitely in the description below, join the cloud kitchen Facebook group where we talk about everything to do with the virtual kitchen concept from hiring, from concepts to actually going out there to market. Once again, I really hope you enjoyed this video. I'll see you guys in the next episode.