Tips for Opening a Catering Business and Making it a Reality

Starting a Catering Business is a Multi-Step Process

So… You Want to Open a Catering Business

Even if your muffins are divine and your tempura chicken is to die for, it doesn’t necessarily mean you’ve got what it takes to run a successful catering company. By following a step-by-step, pre-launch plan, however, you can determine in advance how likely it is that you’ll be able to pursue your dream of starting your catering business and making it work.

Research is Your First Step

The first step in launching a catering company is to assess who else is offering catering in your area. Check out your competitors’ menus, their list of services, prices, and – if possible – their customer base. Visit their website and see if you can quickly find their unique selling points. Successful caterers sell more than just food; they also sell the reasons that customers buy food from them instead of somewhere else. To be a successful caterer, you’ll need to promote convenience, affordability, unique menus, and a specific style; food is just part of what you’ll be offering.

Find a Niche for Your Catering Business

Chances are you’re going to start your business by offering “off-premises catering”: serving food at a location away from your food production facility. There are three major markets for off-premises caterers:

Corporate clients.The main need of this market is to provide food for breakfast and lunch meetings, with some demand for cocktail parties and dinners, as well. Service can range from simply preparing platters of food that are delivered to the client’s offices, to cooking an elaborate meal and arranging it at the meeting site.

Social events. Millions of dollars are spent each year on wedding receptions — with much of that being spent on the food. Other special events that are commonly catered include anniversary dinners, birthday parties, and graduations. Today, people need almost no excuse to throw a party, and more frequently than ever, they are turning to caterers to make it work.

Cultural organizations. Museums, symphonies, houses of worship, and other cultural and community organizations frequently have catered events ranging from light hors d’oeuvres to formal dinners, sometimes for as many as several thousand people.

Choose from a wide range of catering niche options

Choose from a Wide Range of Catering Niche Options

Start with marketplace and customer research to help you determine the type of catering you should offer. Only after you’ve decided on a niche can you start thinking about the types of food you should offer that will attract enough customers to enable you to make a profit.

Of course, there’s a wide range of additional markets and specialties. You might cook for people with specific dietary restrictions, such as macrobiotic, gluten-free, or other special food preparation requirements. You might want to focus on afternoon teas, children’s parties, brunch buffets, or picnic baskets. Another popular niche market is cooking for career couples who don’t have time to cook for themselves. You can either go to their homes and prepare meals there, or cook in your own kitchen and deliver the food ready to be served. Another option is to offer several days’ or a week’s worth of meals prepared in advance that your customers can simply heat and serve.

A Beginner’s Guide to catering, which you can find online, provides valuable information on how to determine your niche, develop your product or service to target specific customers, and manage your brand once you launch.

Identify Potential Customers

If you’re going to target corporate clients, contact people in the business community to find out what their companies look for when choosing a particular caterer to help you determine what your potential customers may want. Alternatively, you can cold-call a few potential customers. Let them know that you are not selling anything but simply want to ask a few questions about what they would like caterers to offer. This will help you gather information about the services that corporate customers want in addition to food, such as set-up, take-down, staffing, a bar, etc. This information will help you launch your business with the advantage of knowing what your customers will want, instead of just thinking you know what they want.

Similarly, if you’re aiming for general event catering, contact your friends with a short survey as part of your pre-launch research. Ask if they use catering services; why they hired certain caterers; what they liked about them; and what they will look for in their next caterer. This will give you a good idea of what a typical customer is looking for in advance of your big decision.

Brush Up on Small-Business Basics

No matter what type of small business someone starts – and your catering operation, at least at first, will be considering a small business – entrepreneurs have a number of common startup tasks to perform. These include getting a business permit from your town or city, setting up a website and email address, looking into setting up a corporation, and buying liability insurance. You’ll need to check with your local authorities to see if your business will meet any zoning requirements, and check your home owners’ association rules if you plan to set up shop in your own kitchen.

In addition to these general tasks, you will need to meet a slew of regulatory requirements. These regulations will determine how you go about getting a food service license and what you need to do to ensure that your kitchen, storage, transportation, and serving equipment meet the necessary standards. Your local Chamber of Commerce or Small Business Center can help you understand what licensing is necessary.

Bookkeeping is another component that is vital to properly manage your catering-business resources. Keeping good records of operations – even before those operations are launched – will alert you to any cash flow issues before disaster happens. Consult a financial expert before you set up your business to help you with budget, tax implications, employment expenses, etc., and to make sure that you are on the right track.

Brush up on small business basics

Write a Business Plan

With your catering style and target customer in mind, it’s time to create a business plan to help guide you through each stage of business development. Business plans are usually required when a small-business operator seeks financing from banks and other lending institutions. Because there is so much to take into consideration when you start a catering business, a business plan can help you stay focused and reduce stress.

A business plan serves two purposes. It provides a snapshot of your catering company as it initially evolves, and it lays out a guided plan for growth over the next few years. The business plan defines your vision and goals, identifies potential roadblocks, and details your strategies for reaching your goals.

The Executive Summary of your business plan is actually the opening salvo: It tells investors and lenders whether it is worth reading more. It should be a simple, concise description of your catering business, a summary of the market analysis that proves your catering company meets an identified need, and a short explanation of why your business is uniquely suited to fulfill that need.

A good business plan will also include a company analysis (of how the business looks right now); industry analysis that focuses on the overall market (with financial statistics to back it up); customer analysis, which spells out exactly who your target customers will be and what your niche is; and competitive analysis, which names your direct competitors and explains why and how your catering company will stand apart. In your business plan you will also need to outline your marketing strategies and your operation/financial plan, which explains how you aim to meet all your short-term goals (booking customers, staffing, cooking, serving, etc.) and your long-term aspirations (expansion and relocation).

Start with a Dream and Turn it into a Catering Business

The key to success for a home cook who is considering opening a catering operation is to start the process slowly and methodically, and then move on from there. Launching a catering business won’t cost you anything, as the first step is all in your head. So, if you’re ready to move forward, divide your research and planning into small tasks that you can handle over the course of several months. Since no one is standing over you with a stopwatch, you can work at your own pace for a stress-free planning and pre-launch period. The steps above are just part of the process, and we will continue to outline what is further entailed in opening a catering business. Meanwhile, enjoy the excitement of starting your own business, and watch your dream turn into reality.

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