Do you want to go into catering but you are skeptical? If YES, here are 19 critical challenges to expect when starting a catering business and how to handle them.
To every advantage, there is a corresponding disadvantage. To every profit, there is a corresponding risk to be taken. If you want to start and grow into a successful catering company, then there are certain challenges you should expect; i mean challenges that are unique to the catering industry.
Few weeks ago, i explained the ins and outs of starting a catering business from home; so today, i will be highlighting the challenges of starting a catering business and how to overcome them.
Let’s face it; the catering industry is already saturated. It is not uncommon these days to see an unemployed person who wakes up one day and decides ‘Whoop! Today, I become a caterer’. That’s how easy it is to start businesses these days and while it’s a good thing that more people are embracing business and shaking things up in the economy, it is also a wake up call for business owners.
It means that for any business you decide to do, you must strive to be above average. You must stand out from the crowd and be a symbol of excellence; that’s the only way to survive in the business world today. The truth is that as a beginner who is venturing into the world of catering business, you would face challenges. I am not one to tell you“oh, it would be a smooth journey. It’s easy if you try…….” While that may be true for some people, it’s mostly false.
In this catering business, you would face challenges and it’s not only in this business alone. In every business out there, there are challenges. Even if it’s just window cleaning- actually, window cleaning is not just window cleaning, it’s a serious business that pays the bills in many homes.
So, like I was saying, there are challenges in every business out there but the secret is turning those problems into opportunities and making the most out of every difficult business situation. It is always a good idea to be realistic whenever you are starting a business and to carry out what is known as a SWOT analysis. SWOT refers to -:
- Strengths– The sweet side of things i.e. profits, exposure, free time and all the sweet things that comes with starting a catering business.
- Weaknesses– Some of the clogs in the wheel of those sweet things you have planned to enjoy.
- Opportunities– These are the possible things that may come up in the future that would further enhance your business success.
- Threats–Oh! These are the little demons.The little monsters that cause you sleepless nights.Those are the ones I want to tell you about right now. You will have to figure out the first three yourself or maybe I will tell you some other time when I am in a nicer mood *grin*
When you are done reading this, I bet those monsters won’t seem like monsters anymore because I am going to show you ten challenges you will face when starting a catering business and also offer you a solution.
19 Challenges of Starting a Catering Business and How to Handle Them
Yes, competition is the arch-enemy. Almost every woman out there can cook or think that they can cook and the men are not totally left out too. Rather than sit at home writing application letters endlessly, it’s not uncommon to see people turn this skill into a business. Smart move if you ask me.
While it has worked for some and theirs eventually became a success story, for some; it was just an epic fail. My point is that your decision to start a catering business means that you are starting a business in an industry that is already choked up with people; both the successful and the wannabes. So how do you stand out from the crowd?
- The Solution to Competition Challenges
You must be a proactive caterer. Do not wait for the tide to sweep you away before you start taking actions. You need to start with pricing. Your prices must be competitive enough to push you right to the forefront of the business.
You must also never forget the very product you are offering- food. Your food must taste great enough to keep people coming back for more. The truth is that if you serve good food, your success as a caterer is guaranteed half-way. We are humans after all and we love food.
We will definitely not mind tolerating a bit of crap to get our favorite meal. But please, don’t give your customers crap. For further insight on how to promote your catering business, here are ten marketing ideas for caterers.
2. Finances-: The second little monster is finance. You would need money to start a catering business and a whole lot of it. Now how much does it cost to start a catering business? Well, depending on the scale of start-up you choose, the minimum you would need is about $2,000. Not so many people have this amount to spare.
- Solution-: You should start from somewhere. You don’t necessarily need to have all the capital at hand before you start. All you need to do is to learn how to raise funds for your business. You can also find substitutes and embrace equipment hiring for some of the necessary tools that you cannot afford at start-up. One secret successful caterers use is to ask for at least 50% upfront from clients, so that they can use that to carry out any job they have at hand.
3. Down times-: In catering business, everyday isn’t Christmas. There would be times or even periods when there would be no jobs and basically nothing to do. Catering business is sometimes seasonal. At the beginning of the year, there are usually less parties which equals less catering and less businesses for you.
- Solution-: Solution? I have only one word for you: – “Diversification.” You must know how to diversify your investments and I don’t mean you should be a caterer today and be a fashion designer tomorrow. It simply means that you should invest in other things within the catering industry (Selling catering equipment is not a bad idea) that would keep you busy and keep your bank account from going red when there is a downtime.
To be successful as a caterer, you need to get adequate training and this may cost you a lot of time and money. The food industry is continually evolving and a lot of new dishes and recipes are being introduced and you would have to learn these things so as to keep up with the pace. For instance now, some caterers now have to prepare gluten-free meals or cholesterol free meals as part of the menu for parties, so that people who are on a healthy-eating journey can also have fun at parties.
- Solution-: You must always plan your time to include training. Training can be done quarterly or monthly. Down times are also a very good time to undergo training.
5. Dealing with people-: As a caterer, you would have to deal with different individuals and no two people are the same. Your clients would have different characters and what would appeal to client A might be totally repulsive to client B and this can be really frustrating.
- Solution-: You just have to learn to get your emotions out of the way. Handle each client in the most professional way possible and most importantly, do everything with a smile on your face even when you are not really feeling like it.
6. Advertisement-: Advertising and getting clients to patronize your catering business is also not a piece of cake. This is in fact, the greatest challenge caterers’ face.
- Solution-: You need to employ serious marketing tactics to promote your catering business. One method is to use promotional materials. Another way is to incorporate a sort of referral program into your business. Form an alliance with other party vendors like decorators or event planners and offer them commission on each client they refer.
7. Personnel-: Finding capable hands to work with you in the business, people who share your vision and zeal could sometimes be difficult. And when you eventually get them, some of them take-off after few months to search for greener pastures.
- Solution-: You should strive to make your grass green enough. This means that you should offer commission, incentives or whatever you choose to call it, which is impressive enough to make employees want to remain at your service.
8. Equipment-: Equipment needed to start a catering business can be very expensive and that is not even the only challenge. This equipments also prone to damages and sometimes they can become obsolete and irrelevant within a short time.
- Solution-: Put away some money from every earning you make as savings for purchase of equipment whenever there is a need for replacement. You should also consider renting instead of buying sometimes.
9. Licensing-: You would also need to obtain and regularly renew your license to run a catering business and probably have to deal with health officials most of the time.
- Solution-: Make sure you obtain all necessary licenses and employ healthy and safe methods in preparing and presenting your dishes.
10. You-: Yes you! Are you surprised? You are one of the challenges your catering business would likely face because the success or failure of your business depends on you and how you run your business. You are your own boss. That doesn’t mean you should start running your business in a nonchalant manner.
- Solution-: Handle your business like the success that you are!
More Challenges You Will Face When Starting a Catering Business from Home
11. Catering is a very stressful business. This is because you have to move from place to place in the cause of cooking and serving.
12. It is management intensive
13. Constant change in the market price of food stuffs
14. Getting government approval and passing the test of food regulatory agencies can be a pain. You just have to deal with it as there is no shortcut. The are a lot of legal requirements needed to run a catering business smoothly. The best approach is to engage the services of an attorney that understands the food industry.
15. Safety of food
There is a challenge in keeping food safe and maintaining it in the appropriate temperature. The key to keeping food safe is to be constantly checking or monitoring it and properly supervising and training your staff. Safety of food begins when you have the required ingredients in your hands. The ingredients must be constantly refrigerated or frozen. This process has to continue when you defrost foods and begin to cook refrigerated ingredients.
16. Struggling to control the uncontrollable
In the business of catering, you have to deal with many factors that are completely beyond your control. As a business operator, you are required to be flexible and conquer the urge to handle all detail within you. Catering is not a profession where you can simply be a control freak and survive in the business. There are a number of factors which you will have to account for in all jobs, and no two jobs is expected to have the same combination of unknowns.
17. Event Logistics
You must anticipate the flow of guests and avoid human traffic jams but no matter how hard you try, there will still be some lapses. Experience have it that the bar and the food are in different areas of a room, or in different rooms. A well experienced host may want the bar and the food close to each other, with a thought that it is convenient for guests but not knowing that it is a disaster that is waiting to explode. Lines for each must move efficiently, and never meld together.
Also, estimating the quantity of food needed for a specific job or occasion is a very big challenge. The amount of food that people will consume changes with the time of the day and even the temperature of that event space. If the event is outdoors on a very hot day, for instance, people will tend to consume small and drink more. Light, cool foods such as cold soups and salads will be eaten before hot ones.
18. Client’s complaint
This is another challenge in a catering business, it may not be as a result of something lacking in your catering house, but might often be as a result of something totally unconnected. It may be a difficult access to your venue, it may be that the dishwasher is faulty and they are unable to use it for the rest of the week. Whatever the challenges/problem is, you need to manage the situation with diplomacy and care.
19. Building your brand reputation and winning client’s confidence enough to earn you a referral is quite a challenge because humans are insatiable. To overcome this challenge, you must continually ask for feedback from clients you have served.