Are you interested in starting a catering service ? Do you want to learn what it takes to run a catering successfully from home? If YES, here is a complete checklist for starting a catering business from home with NO money and no experience.
Okay, so we have provided you an in-depth sample catering business plan template. We also took it further by analyzing and drafting a sample catering service marketing plan backed up by actionable guerrilla marketing ideas for catering businesses. In this article, we will be considering all the requirements for starting a catering business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Catering Industry Overview
- Market Research and Feasibility
- Catering Business Plan
- Catering Service Marketing Plan
- Catering Name ideas
- Catering Licenses and Permits
- Cost of Starting a Catering Business
- Catering Marketing ideas
If you have a penchant for whipping up great meals, then you may have also tinkered with wanting to commercialize the business. If you have cooked for family and friends, and they have told you how much of a good cook you are, then chances are that you need to take the business to another level.
One of the skills that you have got to bring to the table is the talent to make great meals. After you are able to establish that, then you can begin to look at cooking for a large crowd, because then there will always be an available market. However; truth be told, being a professional caterer might not just come easy.
Why Start a Catering Business?
- Catering is a service that provides you a chance to showcase your talent and creativity in the aspect of cooking and service delivery
- It is not capital intensive. In fact, you can start a catering business from home absolutely with no money and you don’t even need an office. Your client’s advance payment is enough to jumpstart the business and rent all the equipment you need
- You can run your catering business part time, while still keeping your day’s job or business
- There is no entry barrier to opening a catering business. In fact, even a student can do this business without any hitch
- As a caterer, there are a lot of niches to target and you can never be short of clients. You can choose to provide services to specific organizations such as restaurants, fast foods, etc or you can work independently and offer your services at events, weddings, parties, business meetings, private clubs, etc
- As a caterer, you are either self employed or a business owner and you decide your income
- As a catering business owner, you will add to the development of your community and country at large, with respect to job creation. Event catering is definitely not something you can carry out alone; you will need to employ helping hands.
- Catering is one of those businesses that don’t need much marketing or advertising. In fact, you rarely see caterers advertise their services. This is because they always have a steady flow of clients through referrals and word of mouth marketing done by satisfied customers.
There are so many things that has to be considered when you are looking to start a catering business in America. Just as it is all over the world, there is always the need to count costs so as to arrive at the type of catering business you want to start. There are also equipment that are needed when you look to cater for a crowd of people. All of these and more are what needs to be dealt with foundationally.
Starting a Catering Business from Home With NO Money – A Complete Guide
- Industry Overview
This trade has to do with providing individual event-based food services. Catering companies generally have equipment and vehicles to transport meals and snacks to events or prepare food off-site. Some of the events catered by catering establishments include; graduation parties, wedding receptions, business luncheons and trade shows.
- Interesting Statistics About the Catering Industry
The catering industry in the United States of America is a big one. As a matter of fact, it takes in about $7billion a year. A considerable amount of the sales in the industry is generated through weddings, birthday parties, corporate functions, funerals, holiday parties, and what have you.
Spending on catering services typically depends on the dispensable income of businesses and consumers. While there is always a demand for catering services, customers typically spend less during slow economic times. There is hardly any country in the world where one may not find caterers who are into full – time catering businesses.
Professional caterers do not only cater for big organizations, government agencies, institutions and parties, but they can also be contacted to handle home catering services for people who can the luxury. This means that people who host a huge number of visitors per time in their houses can relax and allow the burden of cooking to be taken off them.
In the United States of America alone, there are well over 10,000 registered catering businesses that employ about 150,000 people (both contract and full time employees), and most of them are thriving pretty well in the business because there are loads of business opportunities available to caterers in the United States of America, as well as l in other parts of the world.
Catering business is considered to be amongst the delicate industries, this is because they are involved in cooking food for consumption for a large number of guests per time. It is the reason why this business is subjected to regular inspection by relevant health officials from different local health departments. As one who runs a catering business in the United States of America, you are expected by law to comply with the laid down rules and regulations for the industry.
What Opportunities Exist in the Catering Industry?
There is ample room for any entrepreneur who is interested in running a catering business in the United States of America to start in any capacity and still maximize profit in the business. You can start by catering for 20 people or less, conversely, you can as well start your catering business by catering for a large crowd. The bottom line is that catering business is known to be a very lucrative business in all parts of the world, and not just in the United States of America.
In the past years, the Caterers industry have continued to witness a boom as consumers and businesses have walked up spending on industry services. It is for this reason that experts have forecasted that in the coming years, the industry will continue to experience continued improvement as both consumer spending and corporate profit reach all-time highs. The basic skills required to become a successful caterer include:
- Problem solving
- Good hospitality skills and having a flair for presentation
There is the need to have good food service skills to ensure that meals are served on time. Some research experts have found that the average company in the Caterers industry spends $0.07 on capital for every $1.00 spent on labor; this represents an extremely low level of capital intensity. Despite all that, the catering industry in America and other parts of the world is a very profitable one.
One of the things that encourages one to start this trade is the fact that one could start a catering business on a part-time basis, whilst even still trying to grapple with building the business, expertise and a supply of equipment. In other words it can be said to be a creative, fun and challenging job.
Starting a Catering Business from Home – Market Feasibility Research
One of the very important steps that must be taken when starting a catering business is analyzing the Trading Area. What this means is that you have got to be conversant with the age bracket of those you are targeting. When you analyze your area’s demographics, pay special attention to the following factors:
- Income levels
- Education and job types
- Marital status
- Size of household
- Housing and renting prices
- Local businesses
It is very vital that in running a catering business in America, that the spending and eating habits of people who live in your trade area be established. For example, knowing how many corporate organizations in the area you plan to start a business may help you in knowing the type that might be able to want to employ the services of a caterer when a corporate event is being thought of.
It is also very important that you arrive at knowing the behavior of the individuals or organizations that might be in need of catering services. The behavior, values, opinions, cultures, interests and lifestyles of a demographic group is worth knowing and it is very important that you do all you can to see that you learn this so that you can determine those that will be your clients. For instance; the general psychographic statistics on catering include the following:
- 18 to 24-year-olds may likely want a caterer to handle their events and parties.
- Organizations and corporations with more employees usually look for a caterer to man their restaurant and events. Smaller households eat out more often than bigger households.
- People with more income who plan big events may want some catering services.
- Wedding planners like to work with caterers
- People who work long hours eat out more than people who have enough free time to cook their own meals.
- Working wives tend to prefer caterers supplying their foods
The catering trade in the United States of America will continue to be on the rise. This is because of the huge demand for the services. It is no wonder that those who are already in the trade will do all things possible to see that they continue to be at the best. Hence; if you’re looking to set yourself apart in the catering industry, then it becomes expedient that you create a niche.
What does this entail, you just might ask? Well, it involves carving out special services and menus. This menu and services should be such that you are versed in. Better yet, it could be services, such that you want to spend and build a skill around in. Thus, here are a list of niches;
- Corporate Catering
- Wedding Catering
- Holiday Catering
- Breakfast Catering
- Picnic Catering
- Box Lunch Catering
- Mobile Catering
- Welfare Catering
- Transport Catering
- Hotel/Restaurant Catering
- Special Event Catering
- Industrial Catering
- Social Event Catering
- Gourmet Catering
- Food Delivery Services
- Airline Catering
- Cocktail Party Catering
- Pig Roast Catering
- BBQ Catering
- Canteen Management
- Event Management
- Sales of Cakes
- Equipment Rental Services
- Consultancy Services
- Catering School and Trainings
It is very pertinent that you specialize in the style of food you want to offer. One of the marks of a professional caterer is the signature trade you are known for. It is for this reason that you have got to consider using special events like holidays or family parties. Why is this important?
This is so that you can concentrate more, as well as add your special touches when you narrow your offerings to functions, such as including themed decorations in your garnishes or having staff dressed for the occasion. However, this does not mean that you should steer clear other areas of catering; but the idea is so that you are known for your specialty.
A little extra service here and there can indeed help build your catering brand. This is because of the level of competition that abound and the level of success that you can record when you offer some few specialty services. What does this specialty entail?
It means that you have got to enlarge your services to benefit a certain customer. Offer services like having ushers and bartenders who can offer free services to your clients will be an added advantage. You may also want to double as an event planner, so that you can exclude the chances of your clients hiring one.
- The Level of Competition in the Catering Industry
Catering companies in America, provide single-event food services at client -owned and company-owned facilities. These catering companies essentially function as local businesses. It is a true phenomenon that as the stats of the consumers increase, there will be likelihood for them to organize catered special events like; corporate events, wedding receptions, graduation dinners, holiday parties, amongst many other functions.
This have continued to happen in America, and in other parts of the world like the United Kingdom, Australia, Canada, Asia/Pacific region, Africa, Latin America, and the Middle East.
The catering industry in the US can be said to have about 10,000 companies, with combined annual revenue of about $8 billion. Demand can be said to be driven by corporate profits and consumer income to a large extent. As such, it would be fine to say that the profitability of individual companies depends on cost controls and effective marketing.
Large companies are more on the advantageous side when they offer expanded services such as facilities management, room rental, and entertainment.
Furthermore, Small companies can compete successfully by serving small groups and offering personalized service. The industry is highly fragmented: the top 50 US companies account for less than 15 percent of industry revenue.
List of Well Known Brands in the Catering Industry
Some of these well-known catering companies for instance are;
- Abigail Kirsch catering company in New York city
- Behind the Scenes Catering company in San Diego
- Blue Plate catering company in Chicago
- Legendary Events catering company in Atlanta.
In starting any business, it is very expedient to know how to cut costs and make more profit. This also applies in the catering industry. This is because if the dynamics of economics isn’t applied, then going by what is on ground, making profits might be a challenge. And the truth is that no one wants to go into business without making profit.
In the catering industry, it is therefore important to only use those things and manpower that only helps to rake in more money, against having to pay more without a tangible result for it. As such, when you are starting out in the trade, it is important to consider based of the capacity of funds that you have , and then operating in a way that will keep costs to the barest minimum.
When caterers operate from their own facilities, it can be said that cost of accommodation would be less, however the cost of maintenance have got to be factored in too.
Labor is yet another economic factor to be considered. For instance; the average company in the Caterers industry in America spends $0.07 on capital for every $1.00 spent on labor; this represents an extremely low level of capital intensity. Caterers need to have access to a large pool of temporary staff and to rent equipment when required so as to cut costs.
Buying a Catering Franchise Vs Starting a Catering Business from Scratch
It is true that we all want to sleep in an already made bed because of the comfort we get, as well as the difficulty that would have been averted. Where the idea of starting a catering business from the scratch, versus buying a franchise, comes to play, this also comes to play. This is one of the reasons why you have got to sit down and do some calculated thinking, so that you do not fall prey to failure.
It is a very wonderful idea to want to start a business like catering from the very start; however, it comes with its own fair share of teething problems. The challenges that your nascent business might have to face include; not being recognized in the market, as such working tirelessly to see that your new catering brand is accepted in the market.
Also, there is the problem of manpower and majorly acceptability. Of all that have been stated, acceptability seems the top on the row. Why is this so? This is so because once your catering services is accepted, then this acceptance can translate to having loyal customers.
On the other hand, buying a franchise can be likened to buying a meal that has been cooked by another person. That person must have done all the ground work, of making the catering brand known by all and sundry. Furthermore, such a business must have recorded great level of acceptability and success. And now, you can ride on that great advantage to commence your own business.
Whatever option you decide to opt for, it is important that you note that buying an existing franchise just might cost more to run, than if you had to start from the very bottom.
- Possible Threats and Challenges in the Catering Industry
It is a great thing to want to start the catering trade, but truth is that there are challenges that abound in the business. Just as it is with other trades, so it is with this. However, that is not to say that they are insurmountable ones. They are the type that needs calculated efforts to surmount. There are a couple of first class catering services companies they are a huge threat to you.
They pose a threat because they are already established, and their brand is well accepted. Also, most of them can boast of a have huge clientele base. Your competitors are able to develop expensive new marketing and sales campaigns and that will mean that you will have to struggle to catch – up. Some other challenges include:
- Perfectionism-: There are times when your clients pays a huge amount of money and expects that you come to deliver perfectly. More often than not, this can be a challenge because your clients expects way too much from you because of the great deal of money that has been paid
- Being Up and About Always-: Even when you have got the best managers or supervisors to help you man things; there would still always be the need for you to be about and busy. This can be a challenge because there are times when you need to take a rest but just cannot because of the fear of failing your clients.
- Maintaining Quality-: No matter the type of training you spend your hard earned cash on in seeing to it that quality is maintained, there will also be the need to maintain quality through the right attitude. This means that you have to work at several aspects to see that quality is maintained and this can be a challenging task.
- Catering is a very stressful business; as you have to move from place to place in the cause of cooking and serving.
- It is management intensive
- Getting hardworking and competent employees is quite a challenge; as you wouldn’t want to employ people that will tarnish your reputation. Also, retaining good staff is another challenge you might encounter
- Finding good clients that won’t make you go mad
- Constant change in the market price of food stuffs
- Ensuring the Safety of food
- Another challenge you will face is client’s indecisiveness and ever changing demand.
- Event Logistics
- Client’s complaint and lawsuits
- Loss and damage of utensils and equipment that may happen as you discharge your services
- Building your brand reputation and winning client’s confidence enough to earn you a referral
- Economic Downturns
- Change in Government’s economic and fiscal policy
- Getting Licenses and permits
- Taxes and levies
Catering Business Name Ideas & Suggestions
Look around you and you will notice diverse names for the catering business in America. From Tasty Delight, To Round The clock meals and what have you. If you do not have an inkling about the type of name to choose, then you may want to consider the following catchy names for your business.
- Food Gurus
- Stomach Masters
- Taste Buds
Writing a Business Plan for your Catering Business
Writing a business plan is one essential step that must be scaled. There are several things that just must be contained in this. They include; the vision and mission statement of your business, sales projection, succession plans, the overall aim of your business as well as other things that must be contained in it. Here is a sample catering business plan template you can use to get started.
You will only be able to write a business when you do a thorough and exhaustive research. On the other hand, you may consider hiring a business consultant who will be able to help you pull this part of your preparation process of starting your business.
- Finding a Good Location for your Catering Business
In case you didn’t know, one of the things that could possibly make your business standout is hinged on the type of structure, as well as location of your catering business. It is especially important that you get this part of the preparation plans. This is so that you can attract the right kind of clients. It is for these reasons that you need to first of all target a location that is highly populated with those who make up your target audience.
For instance; those who might be in need of catering services include; corporate organizations, working class individuals, students, housewives, churches and what have you. As such; first consider locating your business in a neighborhood that has some or all of the target markets. As such, it could be around a school, neighborhood, offices, etc.
If you are able to locate such a locality, then you will need to build the right structures, so as to get a head start. If you do intend to run a restaurant in a part of your office, then you will also need, then you will need to have the following structures built;
- A hall or room that serves as the restaurant.
- A kitchen. That is where all the menus will be whipped up.
- A Parking lot where those who come with cars can park
- A store or ware house where all the outdoor and some indoor cooking equipment and utensils are kept.
- Offices for the team.
- A reception where visitors can converge.
Technical & Manpower Details for Starting a Catering Business
In catering business, it is very important to have the best equipment that would help bring the best out. This is why it becomes needful to acquire good equipment. They could be new or the fairly used types. There is no hard and fast rules about what sort of equipment to procure, so far as the equipment and tools are in shape, then it is okay to use fairly used or the brand new types of tools. Here are some of the tools or equipment you will need for your catering business;
- Standard commercial oven
- Industrial Gas Cooker
- Baking Sheets
- Work Tables,
- Cake decorating Tools
- Ingredient Bins
- Kitchen utensils.
There are also cases where you may not have enough funds to procure all of these. In that case, you may need to lease form those who have commercialized renting these equipment. In the long run, you will still need to acquire yours, since it is cost effective.
Coming to the area of manpower, catering business isn’t something you could possibly do on your own. This is because of the fact that there might be too many people to attend to and you may not be in the position to do all that. As such; here is a list of the manpower you might need to start out with;
- Chief Executive Officer
- Chief Cook
- Cooking Assistants
- Admin and Personnel Manager
- Front Desk Officer
- Sales and Marketing Officer
- Servers (Contract Staff)
- Cleaners / Dish Washers
The Production Processes Involved
There isn’t a clear cut rule as to how to prepare the menus that are listed or that a client demands. This is because there are different processes involved in producing each, meals. However, here is a typical system in servicing a client.
Once a client has demanded a service, the next thing would be to pay some money in advance. This is so that the job can be started in earnest since there have been an advance payment. After that, the ingredients needed to make all the foods are acquired by the procurement officer.
Once that is done, he or she then hands over to the manager who tells the cooks and chefs what they must do. Once the meals are ready and packed, then the dispatch riders/ drivers takes them to the venue of the occasion where the food is needed.
Starting a Catering Business With No Money – The Marketing Plan
Marketing ideas and strategies for your catering business include:
- Direct Marketing
- Marketing via Our Sponsored TV Programs and Community Based Events-: This will involve sponsoring a community based program, by catering for the guests for free or at a discounted rate. You may decide to sponsor a TV program too.
- Erect Our Billboards in Strategic locations around the city-: This might involve huge cash, but in the long run it pays. One of the things erecting a billboard around a community does, or the city is that it make your catering business be in the faces of people.
- Sales Reps-: You many also consider roads show, where your sales representatives go around with fliers to sensitize the people of the need to employ your catering services.
- Online Marketing (via our official website, social media platforms and blog et al)-: Having a working website and social media platforms, is also a great way to make your brand known. You will consider being on Facebook- through a facebook page, twitter, badoo, instagram, and what have you.
- Referral Marketing-: This might be through the good old word of mouth mode of advertisement. Here, then people get to learn of your business, once someone else has tasted it and attested to the fact that it is good.
- Promotion of our products during our training sessions in our catering school-: You can also make your business known when you engage in training people on cooking skills. Once they acquire these skills, they can then tell others about the great thing you are doing.
Factors That Will Help you Get the Right Product Pricing for your Catering Business
You have got to be careful when setting the price of your services. This is so that you do not overly price or under price. As such; you will need to look at the following factors when thinking to price.
- Testing the services of others
One of the ways to set pricing is by testing the services of other brands. So, look at the other people who offer the service you do and then ask them to provide such a service for you. Whatever you are being charged, should then determine what you should.
- Undertake Research-: You do not have to be static when you want to set a price for your business; as such, you need to be all out running a research. Go to as many catering businesses as you can, and ask them about their pricing
- Location-: This is also an essential factor when looking to set a price. This means that if you are in a high brow area, then service price might be relatively higher and vice versa.
Possible Competitive Strategies for Winning your Competitors in the Catering industry
There are some factors that could cause you to have competitive advantages. They include the following things;
- Offering Variety of services
If you really want to stand out amongst the pack, then you may consider offering a wide variety of services. You should not only be a wedding reception caterer for instance. You can do breakfast catering, cooperate catering, amongst many others.
- Good Physical Structure
Whether you are starting out with a rented facility or with your own property, the fact remains that People love excellence and so would love to deal with those who are. That is why in putting together your structure and decor you have got to make it well established.
Possible Ways to Increase Customer Retention for a Catering Business
One of the ways to increase customer retention is by doing a couple of things. What are these things you may wonder? Well, they include:
- Offering Discounts-: Everyone loves it when some form of concession is given in business. That is why it becomes needful that you offer some discounts on your services so that you can have some loyal customers
- Excellent services-: The type of services you offer and how you offer it goes a long way in determining your customer retention. Once you strive for the best through this, then great customer retention is yours.
Strategies to Boost your Catering Brand Awareness and Create a Corporate Identity
- Place adverts on both print and electronic media platforms
- Sponsor relevant community programs
- Sponsor relevant TV shows
- Leverage on the internet and social media platforms like; Instagram, Facebook ,Twitter, LinkedIn, Badoo, Google+ et al
- Install our Bill Boards on strategic locations.
- Engage in road shows from time to time
- Distribute our fliers and handbills in targeted areas from time to time
Creating your Catering Suppliers/Distribution Network
In Catering trade, there are several ways through which you can source for the raw materials needed to make the meals/ foods that people love. One of the ways is through purchasing form the open market. Purchasing in the open market just might be cheaper than when you have to procure them from a mall or store.
However be reminded that prices here varies. You may also consider buying directly for the farmers. Things like vegetables, fruits, and food crops can be got straight from the farmers. Whilst things like meat can be got from the abattoir. This is so that you buy directly and eliminate any expenses cost that might be incurred by a middle man/ retailer.
Tips for Running your Catering Business Successfully
It is the wish of every catering business owner to see that the business is well run, so that it can thrive and attain a big level of profitability. It is for this reason that those who are already in the trade know that certain management tips on how to run the business must not be toyed with. What are these management tips you just might ask? Here below are few tips to help you run your catering business without a hitch every day;
- Inventories Must Be Kept
One of the things that is not being properly done in some catering business is the inability to keep inventories. This has to do with the products and services on a daily basis. For instance; if you are into fast foods and meals, then care must be taken in seeing to it that all that is produced and sold is well calculated and the figures kept. This is so that you know the exact amount of what goes out and what comes in per time.
- Time Consciousness
It is very expedient that you and your team are time conscious. One of the things that could repel customers from you is when you do not keep to time as planned. For instance; if you have to be at an event that has been paid for at a stipulated time, and you eventually fail to do so. Others include; Having an excellent employees, good customers service amongst many others.
Finally, running a catering business can be a lot of hard work. However, in the end you will be able to boast of good returns on your investment. Your mantra should therefore be working smart and hard.