Making it in the catering industry takes more than culinary skills and ambition. Here’s what you need to know about how to start a catering business, from the concept phase to growing the business, so you can decide whether or not it’s right for you.
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How To Start A Catering Business: Research
Like most aspiring entrepreneurs, you’re probably full of enthusiasm to get started right away, but take it slow. Perhaps the most important thing we can emphasize to readers wondering how to start a catering business is that proper planning can make or break your business.
It might help to apply a culinary metaphor: The steps you take during this phase (below) are like inventorying your pantry and fridge to see what ingredients you have on hand and developing a delicious recipe for success.
Investigate The Market
Starting a catering business, like planning any other type of business, means you have to consider your potential customers and competitors.
Try getting in touch directly with potential clients — like event planners or the management of conference centers and wedding venues — to see what they look for when hiring caterers.
Get as much information as you can from other catering firms in the area to see what type of menu options they offer and how they’re priced.
Pick Your Niche
The research you conduct will help you figure out where your catering company can profitably fit into the local market.
For example, perhaps your area has many popular wedding venues and the established catering companies can’t keep up with the demand. Or maybe businesses in your area are having more lunch meetings but aren’t satisfied with making carryout orders from restaurants.
Make A Business Plan
If you still think that you can make a go of it in the catering business after completing your research, apply what you’ve learned to develop a written business plan.
Your business plan should include:
- The basic culinary concept (a full detailed menu isn’t necessary)
- The type of clientele you want to target
- Analysis of your competitors and what you think you can do better or bring to the table that they don’t
- What you think your staffing needs will be
- Ideas on marketing the business
- A financial summary, including your expected costs, expenses, and projected profits
Writing a business plan not only helps you translate your dream into realistic action, but it’s also essential if you need to win over investors (something we’ll talk about in the next section).
How To Start A Catering Business: Preparation
In this phase, you’ll translate your research into real action. To put things in cooking terms, think of these steps as your mise en place: getting all of the ingredients for success in place before you fire up the oven.
Secure Startup Capital
It takes money to make money, as they say, and starting a catering business is no exception to that axiom.
Compared to some food industry endeavors, a catering business requires a relatively lower amount of startup capital. However, you’ll still probably need tens of thousands of dollars to get your company up and running.
If you have that much saved up, congratulations! Even the most passionate aspiring entrepreneurs may not feel comfortable plunging their life savings into a new venture, though.
You may need to look at getting a loan or soliciting investment from friends or business partners.
Get Licenses And Permits
Whatever type of business you’re in, you’ll want to make sure that you’re operating in accordance with all applicable laws and regulations.
Besides requirements that apply to any type of business, like a general business license and an Employer Identification Number, Some states also require a specific license for caterers.
You’ll also need to get a food handler permit and a health permit. If your company provides bar services at events you cater as well as food, you’ll need to get a liquor license as well.
As with any type of business, it’s a good idea to consult a professional, such as a specialty lawyer, to help you sort out the more bureaucratic aspects of getting your company up and running. Your local Chamber of Commerce might also be able to offer information.
Plan Your Menu
You probably included general ideas about the type of cuisine your catering business will focus on in your business plan. Now you need to get more specific about the dishes you’ll offer.
Consider what dishes are likely to be most popular with clients, as well as the cost of ingredients, the amount of time and effort involved in preparation, and the kitchen equipment that you’ll need to use.
At least for the startup phase of your business, it’s usually best to keep your menu relatively limited. In addition to preventing indecisive clients from being paralyzed by options, you’ll be more confident in the kitchen if you stick to a few dishes you know you can nail every time.
Set Up Your Space
For anything but the smallest catering jobs, the average home kitchen probably isn’t going to cut it. Furthermore, some states actually have regulations that prohibit running a catering business from a residential kitchen.
For newly established catering businesses that probably aren’t going to be working every day of the week, renting a commercial kitchen space (sometimes called a commissary kitchen) is often the best solution.
These usually come outfitted with commercial food preparation equipment and ample storage for your new company to get by until you grow to the point that you need your own, permanent space.
How To Start A Catering Business: Launch
Now we’re finally at the fun (and scary) part: the part where you actually start operating your catering business.
Of course, if you intend to take on catering contracts of any size at all, you’re probably not going to be able to get the job done as a one-person show. You’re going to need help, and that means staffing up.
You want to avoid the costs of bringing on too many employees too soon, so it might be best to hire one by one. You can use your own network to find candidates or use food service-oriented job websites. Temp agencies are also an option that might be worth exploring.
Don’t neglect the importance (and costs) of training and equipping your staff. Your employees need to be taught to follow proper food safety protocols. If they’re going to be helping at events in view of clients, it might also be wise to purchase uniforms.
Sort Out Scheduling
As your business expands and you take on more jobs and bring on more staff to handle the higher workload, it’s almost inevitable that scheduling will start to become a headache, especially if your business grows enough that you have staff working at multiple locations.
The best way to solve these issues is by using specialized scheduling software like Inch. Inch makes it quick and easy to generate schedules for all of your employees, assign tasks, and communicate with your entire team.
Promote Your Company
Unlike with a restaurant, you can’t get business for your catering company from people simply walking by. That means it’s all the more important to get the word out about your company!
Whole books can be written (and have been) on marketing small businesses, but one of the best ways to get new customers in any type of business is by leveraging your existing customers.
Be (politely) proactive in asking for referrals and positive reviews from your satisfied clients, and have business cards to give out at events you cater. Good word of mouth is more credible than any ad, and it costs your business nothing.
Take Your Catering Business Further With Inch
If you love food, like the idea of helping to make special occasions special, and have an entrepreneurial spirit, you might have given some thought to the question of how to start a catering business.
Hopefully, we’ve provided useful food for thought on how to make your dreams a reality! And if we helped you in some small way get your company off the ground, keep Inch in mind for when your burgeoning business needs to save time on scheduling and task management.
To find out more, visit TryInch.com today.