Do you want to start a catering business? Find in this article a detailed business plan guide on starting a food catering business with a small investment.
Starting a catering company is a perfect business opportunity for people who enjoy serving people different food recipes. It is a profitable business and ensures a lucrative margin for the owners. One can start this business part-time initially. As your business grows, you can consider giving your full effort.
It must be noted that the catering business is demanding. It requires stamina, and ability to work under pressure, and excellent interpersonal skills. And the success of this business hugely depends on personal reputation.
You do not need special education or training to become a successful caterer. However, taking some courses at culinary institutes or vocational schools can significantly help improve the quality of your food offerings.
Instead of taking classes, you can also work for an established caterer to know them inside of the business operations. Additionally, small caterers generally cater to a wide range of functions and events. The list includes birthday parties for children, breakfast in bed, candlelight dinners, holiday parties, picnics, family reunions, company dinner parties, and wedding receptions.
Here are the 10 Steps to Start a Small catering Business
1. Understand the Local Market
Before jumping to start a catering company, it is essential to gather as much information as possible about the local demand and competition. Do market research and get informed about the performance of existing catering business owners, their service quality, the food they offer, and pricing.
While researching, you will find some of them are more successful than others. Try to know why they are popular and what unique selling propositions they are offering to the customers.
Based on the information received, you will surely find some gaps. Accordingly plan your catering business so that exploit those as much as possible.
2. Select a Catering Niche
The catering industry is competitive. When you are starting a small catering business, it is advised to choose a specific target audience. Handling a big catering order may not be wise to do in the starting days. Rather, choose a niche like small wedding events, birthday parties, etc.
3. Craft a Business Plan
First of all, study the market. And try to analyze the competition. You must craft a business plan regardless of how small or big your business is. Determine the dishes you want to offer. Fix the target demographics. Accordingly, determining a marketing plan. Finally, calculate the startup budget, expected rate of return, and cash flow.
4. Prepare The Menu
In the time of talking to the clients, you will need to offer your own menu card. However, you must offer the scope of customizations. According to the taste of the local people, you will need to prepare this.
5. Registration & Licensing
It is without saying, proper registrations and licensing help to save you and your business in a time of any sort of crisis. The registrations and licensing factors hugely vary on the place. Check what registration and license you need to start and operate a catering service business of your own.
For example, if you are from the United States, forming an LLC will not only help you in protecting personal assets but also makes it easier to submit annual filing of taxes.
6. Choose a Business Name
Choose a catchy and memorable name for your catering business. It is a must. Choose a name that can relate to the local audience and your food category. After you select the business name, design a unique logo. You can use a lot of free tools on the internet to get the job done. Have the printed business cards in hand.
Learn More: How to Name Your Business
7. Fix Pricing
Fix the pricing. Generally, in this type of business, pricing depends on the type of menu and transportation expenses. Think about the discount offer for big orders.
In recent days, some caterers are offering value-added services like lighting, presentations, etc. Think of that. Moreover, the bottom line of this business is making your customers happy with your service.
8. Procure Equipment & Other Items
The purchase is an important segment in any type of food business specially catering service. First of all, you will need to procure the equipment and utensils for cooking and serving.
However, you must carefully purchase grocery items and vegetables. Because vegetables are a hugely perishable item. And grocery items have also limited shelf life. It is essential to find good suppliers and wholesalers to source fresh items at competitive prices.
Catering equipment includes a huge number of items. However, from this list, you can have an idea:
Table Settings & Other Equipment
- Dinner plates
- Bread plates
- Salad plates
- Water glasses
- Wine glasses
- Coffee cups with saucers
- Silverware settings
- Linen or paper napkins
- Table centerpieces
- Salt and pepper shakers
- Sugar holders
- Butter holders
- Serving Equipment
- Serving trays
- Bus Tubs
- Water pitchers
- Buffet Equipment
- Silverware rolls
- Bread Basket
- Chaffing Dishes
- Fuel cells for chaffing dishes
- Lighter or matches for fuel cells
- Serving spoons
- Cutting board (for chickens, hams, turkey)
- Sharp knife for cutting
- Decorations (seasonal flowers, etc.)
- Coffee/Beverage Station
- Air-pots for coffee, decaf, and hot water
- Water pitchers
- Iced tubs for soda, juice, and other cold drinks
- Drinking straws
- Drink stirrers
- Cocktail Napkins
- Coffee cups
- Water glasses
- Basket of assorted teas and or hot cocoa
- Basket of sugar packets
- Small wastebasket and much more.
9. Hire Manpower
Your staffs play an important role in this business. Look for personable, organized individuals with whom you can comfortably delegate tasks. Start small. As your business grows, plan for an overall team.
10. Promote Your Catering Service Business
Promote your business offline and online. Here are some legitimate ideas you can work with. If you are looking to generate clients online, creating a website is a must. You can add your services there and promote your site.
Make your business visible on online and offline classified directories. You can find a lot of free options.
- Establish business tie-ups with event planners and party planners.
- For institutional orders, you can go for email marketing. It is really effective.
- Create your own website. Put the contact information in detail. You can also offer online order-taking services from there.
- Create your own press release to inform the local media that you are opening your catering business. Make sure you include your contact information and list your web address.
- Participate in the bridal fairs. It will definitely help you to make people aware of your service.
Frequently Asked Questions
Is Catering Business Profitable?
The demand for the catering business is increasing rapidly. However, common driving factors are the rising number of higher-income households, the number of weddings, and increasing corporate events with companies, corporations, charities, civic groups, event organizers, and individuals calling on caterers to host on- and off-premises events.
Generally, every big and small size company used to have catering services for their in-house meetings and events for marketing and promotions. Even for small family gatherings, homemakers now prefer to ask a caterer instead of cooking on their own. In today’s busy life, they can spend some time with friends and relatives instead of spending time in the kitchen. Also, it enables them to offer good dishes to guests in the comfort of their homes.
You can start your event catering business from home, part-time or full-time depending on what suits you the most. You can earn between $30,000 to $80,000 a year. The event catering industry in the United States itself is a $12 billion enterprise and is still growing each year.
What is the Cost of Starting a Catering Business?
The home-based catering business eliminates the expenses of rent and other associated costs with the rent. However, the business demands some fixed cost and working capital cost investment. Your primary responsibility includes preparing good quality food, serving, and finally cleaning up. You will need to make investments in utensils and equipment for cooking and serving.
In addition, your major fixed capital investment will go to purchasing the ingredients for preparing the food. Furthermore, you will need to invest in manpower resources. Broadly, you can start a small catering business in two ways. One is a niche catering service provider like catering specialized for a birthday party. Otherwise, you can start a catering company addressing multiple events.
Finally, we must say the catering service business is not an easy task. A true passion for cooking, dedication to your business, and persistence are the few major criteria to get success in this business.
About the Author: 99businessideas.com led by Rupak Chakrabarty is committed to helping beginners, entrepreneurs, and small business owners in starting, managing, and growing their businesses.