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.
23 Steps on How to Start a Catering Business from home
Table of Content
- 1. Understand the Industry
- 2. Conduct Market Research and Feasibility Studies
- 3. Acquire the necessary skills and Certification
- 4. Decide What Type of Services to offer
- 5. Choose a Catchy Business Name from the ideas Below
- 6. Know the Major Competitors in the Industry
- 7. Create your Catering Menu
- 8. Test your dishes
- 9. Write a Business Plan
- 10. Start-up Investment for a Catering Business
- 11. Choose a Suitable Location for your Business
- 12. Get your Permits and Operating License
- 13. Purchase the Necessary Equipment
- List of Equipment/Tools You Need
- 14. Hire Employees for your Technical and Manpower Needs
- 15. Know the Possible Threats and Challenges You Will Face
- 16. The Production Processes Involved in the Catering Business
- 17. Write a Marketing Plan Packed With ideas & Strategies
- 18. Work Out a Reasonable Pricing for your Services & Products
- 19. Develop an Iron-clad Competitive Strategies to Help You Win
- 20. Brainstorm Possible Ways to Retain Clients & Customers
- 21. Develop Strategies to Boost Brand Awareness
- 22. Create your Suppliers/Distribution Network
- 23. Tips for Running your Business Successfully
1. Understand the Industry
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.
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.
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.
Interesting Statistics About the Catering Industry
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.
2. Conduct Market Research and Feasibility Studies
To get started in the catering business, you need to first decide if this business is for you. As expected of all business, offering catering services is a business that requires passion; you need to love the job in other to reap the profits. I advice you read the article “10 Characteristics of Successful Caterers” to know what it takes to succeed in the catering industry.
Another factor you must think through carefully is the model of startup. Will you buy a catering business franchise or start one from scratch? If you decide to go the franchise route, here is a list of profitable catering franchise opportunities you may want to consider.
3. Acquire the necessary skills and Certification
Before starting a catering business, it is important you know not just the intricacies of running a catering business but also the technical details of catering. Mind you that running a profitable catering business entails being an exceptional cook / chef, with a strict hygienic standard and exceptional delivery / customer service
Okay, so you want to become a professional caterer? A good way to start building up your knowledge is to attend to a catering school. Another advantage of attending a catering school is that you will be issued a certificate, which will add a feather to your cap; thus separating you from those caterers without certification.
After getting the necessary qualifications and certification, you need to develop your entrepreneurial skills if you really want to succeed as a caterer. Some business skills you cannot do without in this industry include:
- Sales skill
- Persuasion and negotiation skill
- Accounting skill
- Marketing skill
- People management skill
- Self confidence
- Good sense of humor and neatness, etc.
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.
This is a very important step in the process of becoming a professional caterer. Will you be an indoor or outdoor caterer? Will you offer your services to specific companies, hotels, restaurants, fast foods, etc? Or you would rather be your own boss?
Will you strictly focus on providing catering services or you will provide full scale event planning services? You must think this through thoroughly because whatever decision you arrive at will break or make your business.
- Corporate catering
- Community affairs
- Kosher catering
- Wine and bar services
- Full event management services
- Corporate Catering
- Wedding Catering
- Holiday Catering
- Breakfast Catering
- Picnic Catering
- Box Lunch Catering
- Mobile Catering
- Welfare Catering
- Transport Catering
- Hotel/Restaurant Catering
- Dessert 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
If you are interested in catering for weddings and events, you may decide to contact florists, department store heads, musicians, and people in charge of places that book weddings; and form strategic alliance with them. If corporate catering and entertainment is something that catches your fancy, then you may decide to contact the corporations in your area (the chambers of commerce should be able to supply you with area names).
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.
5. Choose a Catchy Business Name from the ideas Below
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
6. Know the Major Competitors in the 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.
This is another important factor you must decide on before even writing a business plan. Also, the decision you arrive at here will determine the type or course you will take at the catering school and the type of clients you will serve. Will you specialize on African dishes, local dishes, intercontinental dishes or continental dishes. That’s left for you to decide.
A food menu is a very important component of your catering career. In fact, it is one of the first things a client would like to see before engaging you in a negotiation. So try having many items to suit different tastes and demand, even if you specialize in one type of meal.
Also, you should consider offering vegetarian and vegan meals for clients who don’t eat meat or other animal products. Keep your menu to a manageable size, with foods you are comfortable cooking and can be prepared with ingredients you know you can source locally.
8. Test your dishes
Once you are done creating your menu, organize small scale parties with family and friends and have them to taste your dishes. Ask them for honest feedback concerning their experience on both the food and service. Keep on adjusting your dishes until you are told that they are delicious and crowd friendly. Once you get a positive feedback, then you can proceed to prepare a business plan.
To successfully launch a catering company, you need a business plan that will serve as a blueprint for the business and its team. If you start a catering business without a business plan, then you might end up just like every other self employed caterer.
Having a business plan clearly distinguishes you from the average Mom & Pop caterers, as it is helps you forge a mission, vision, goals and objectives; and also help keep you on track. Even if you are starting a catering business from home, write a business plan because it can become an important tool tomorrow as you try to expand and source for funding.
Describe the functions of your company and indicate if it is a sole proprietorship business or an incorporated business. You need to state too in your business plan what catering services you are offering to people. Try as much as possible and be specific. You may clearly state that you are preparing and delivering foods for wedding celebrations or in all kinds of events.
- Research Information about Your Business
Try to find information about your competitors. You need to know how many businesses are offering catering services in your area or how many are catering exclusively for weddings. You must assess the needs of your business environment and how you can help people address those needs.
It is important that you know what people want or what is in demand in the industry you are in. You should also analyze your personal and business strengths, weaknesses, oppositions and threats; then list all of it in your business plan.
- State How You Want to Use Your Funds or Earnings
Carefully think just how much capital you need, how you intend to raise funds and how you will use your funds or earnings. Will you buy new equipments that you think are necessary for your business? How much you are willing to invest to improve your catering services?
It is important to organize the usage of funds. List down all the things you may need to render a good service. By stating how you want to use the funds you have, you can have your business plan implemented smoothly.
- List Down All the People Involved in Your Business
List down all your catering business staffs with their full names as well as experience assessed in years. Ensure that your staffs have sufficient catering experience.
- State How You Are Planning to Cope with Possible Challenges and Issues
Summarize in your catering business plan by explaining how you intend to cope with the challenges and problems that could possibly arise during your operation. Make sure to list some examples or scenarios and what you can do about it. These issues will include customer complaints, marketing, advertising and promotion, etc.
10. Start-up Investment for a Catering Business
- Low – $1,000 (working from your own kitchen using client’s down payment as startup)
- High – $75,000 (outfitting a professional kitchen)
- Revenue: $200,000 – $2 million
- Profit (Pre-tax) – $50,000 – $1 million
11. Choose a Suitable Location for your Business
If it is going to be your full time business, you will need a more permanent storage and cooking equipments. Look for an adequate place so that you will be able to set up your cooking and catering equipments. Check your local zoning office to make sure you can install proper equipment like ventilation hoods and grease traps. However, if you are starting on a small scale from home, then you don’t need to rent a space as you will be operating from home.
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. 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.
There are a lot of legal requirement needed to run a catering business. As a new catering service business owner, certification is not enough to run a catering business; you will need to find out what license is required and acquire it immediately. Before you apply for a catering business license, you must meet the criteria that will qualify your permit.
You must be the owner of the food business and the business must already be registered as a legal entity. The license for this business is overseen by the Food and Health Authority. It is required you pay a certain amount of fee before your license will be processed. The Food and Health Authority will access your catering facilities all the equipments must be in good shape, else they will not approve your license.
The equipment you will use in your catering business is different from the one you will use at your home kitchen. This is because catering entails cooking on a large scale so it requires industrial equipments that is quite expensive. If you plan to bake also, you will need baking equipment.
The equipment you will use depend on the type of service you will offer and the size of your catering outfit but at minimum, you will need serving platters and serving utensils.
You must also make sure you have the proper equipment to keep the food hot or cold. Buy linens, napkins, table decorations and centerpieces. Some catering businesses also offer tent canopies for outdoor events. You may also need to buy a van and other equipment for transporting food. You should also make sure the van has enough space for storage of foods, linens, tableware and other things.
However, if you are starting from home, you can rent or lease the catering equipment you need; though this may decrease your profit margin but it is a good way to go especially when you are trying to keep cost down.
- Renting Vs. Buying Catering Equipment: Which is the Best
- 10 Crucial Tips for Hiring Catering Equipment on Rental
You should not forget to get a catering system management software for your business, as this will help improve your effectiveness and efficiency.
List of Equipment/Tools You Need
- Chopping boards
- Food storage containers
- Pans spoons
- Cooling van
- Micro waves
- Table top
- rolling carts
- Garbage bags for dirty linen
- Extra bus tubs for dirty dishes
- Tin foil
14. Hire Employees for your Technical and Manpower Needs
Catering is a venture you can’t handle alone as there is a lot of tedious tasks to be done; ranging from cooking, serving, cleaning, etc. So you will definitely need helping hands.
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
However, it is important that you train your employees so that they can provide the type of service you want and preserve your brand image. You should also hire an accountant to keep track of your expenses, invoices and income; or better still, you can do your own bookkeeping if you are good at it.
15. Know the Possible Threats and Challenges You Will Face
It is a great thing to want to start the catering trade, but truth is that there are challenges that abound in the catering 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
16. The Production Processes Involved in the Catering Business
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 sign a catering contract and 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. However, it is important that not just your catering van is insured but your entire catering business is covered with business liability insurance.
17. Write a Marketing Plan Packed With ideas & Strategies
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 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
When it comes to running a catering service business from home, the most important marketing tool you will need to cultivate is word of mouth. Most brides, corporations, etc are not going to risk embarrassment by trying an unknown or untested caterer.
If you are fortunate enough to have a solid reputation when entering the catering business, you will have a good head start. If you are starting entirely from scratch, you need to be really creative in order to get contracts for your catering business. To successfully market your services, you need to write a marketing plan for your catering business. Your marketing plan will help you:
- Define your niche
- Know how much to charge clients
- You must have a marketing plan
- Learn how to get referrals and repeat business
- Learn how to talk persuasively to clients
- Learn how to write agreements, contracts and proposals
- You must know how to advertise your services cost effectively
- Maintain a client’s portfolio
- You must know how to track your success and scale-up
A good way to go about marketing your catering business is to invest some capital in throwing a party of your own and invite the decision-makers from various corporations in your area, or the aforementioned florists, department store heads, etc; and give out your business cards to them.
These people are not going to risk their perceived reputation by recommending an unknown entity like you; so give them something to remember and to endorse. Other 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.
18. Work Out a Reasonable Pricing for your Services & Products
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.
19. Develop an Iron-clad Competitive Strategies to Help You Win
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.
20. Brainstorm Possible Ways to Retain Clients & Customers
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.
21. Develop Strategies to Boost Brand Awareness
- 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
22. Create your 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.
23. Tips for Running your 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 catering 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 not just good returns on your investment but you can also sell your catering business for a huge sum . Your mantra should therefore be working smart and hard.
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