Last Updated on May 1, 2022
How to Start a Catering Business
If you are a food service entrepreneurs who doesn’t like being tied down to regular hours and predictable business, then catering may be just the business for you!
Caterers only have to take on what they can handle. In fact, a catering business can be operated part-time, or even from home, and the start-up costs are flexible. For little more than $10,000, you can get a small catering business up and running.
In fact, it is recommended that you start small. Large events like weddings and conferences are a lot to take on, and it’s good to learn to crawl before you run.
Why Catering Is So Profitable
Most catering services provide food in bulk, often in a buffet setting. Let’s examine the advantages of a catering buffet business model compared to a restaurant a la carte model:
|Catering Buffet Service||A La Carte Restaurant|
|Preparation & Purchasing||Buffets are cost-effective and a cinch to plan. Get the guest count and get a guaranteed payment amount. Buffets also help reduce wasted food cost as you can purchase only what you need for your confirmed number of guests.||On any given night at a restaurant, twenty people could come, or a hundred, but you have to be prepared for a hundred, just in case.|
|Equipment & Supplies||Caterers who are starting small only need their most expensive equipment and supplies a few days a week, at most, so they can lease most of their equipment.||A restaurant usually has to keep its doors open on a daily basis. So usually it is more cost-effective to buy equipment instead of leasing, and most small dining and kitchen supplies is not even available through lease.|
|Food Production Costs||Making food in bulk reduces the amount of labor and types of ingredients required. Producing 10 platters of food in bulk is easier than producing 100 individual plates.||There are often twenty or more menu items at a restaurant, and there is no fool-proof way to predict which items customers will order. Menu items usually have to be prepared and plated individually.|
|Service||Guests serve themselves at a buffet. In a catering operation, you will only need one waiter for every 50 people, if you need a waiter at all. In fact, at many events 2 people are enough to run an entire buffet line, which generally can accommodate up to 100 people.||In a typical restaurant, you need one waiter or more for about every 15 people to provide quality service. You also need a hostess and people to bus the tables.|
Although at first a small-scale catering business model may seem like the perfect opportunity for an entrepreneur, success is not guaranteed. While operating part-time may seem splendid, it limits your profits.
Still, many home-based and part-time catering operations have developed into successful and highly profitable companies.
Whether you are starting small or founding a large-scale catering operation, you will need all of the following to prepare yourself for the challenges you face:
If you’ve never worked in the catering business, you should think twice before leaping in too quickly. You may have a solid concept and menu, but if you have never seen these things take shape at an event, your first few contracts could easily end in disaster.
If you are set on starting your own catering company but have no experience, do whatever it takes to get your foot in the door, such as the following:
- Work for a caterer. Find a caterer that you respect, and ask if you can become their apprentice. Direct experience in the catering business will give you invaluable knowledge for running your own.
- Play the spy. You laughed when you saw Wedding Crashers, but you would be surprised what you could learn from this past-time. You don’t have to do anything illegal, but always carefully watch the caterers at events you attend. Look not only for what they are doing well, but for their mistakes, too.
- Help plan events. If you know anyone that is holding a wedding reception, birthday party or even a funeral, offer to assist in any way possible. You will help a friend in need and gain valuable insight at the same time.
- Work as a personal chef. Many caterers begin their careers as personal chefs. Becoming a personal chef will help you make connections with clients’ friends and family and learn how to cater parties for your clients.
Getting experience in the field will not only teach you how to run your catering business smoothly, it will also give you an idea of what kind of competition there is out there. After you have learned what is involved in running a catering operation or planning an event, if you are still interested, you are ready to develop some ideas for your own professional catering career.
The Three C’s: Cuisine, Chef & Concept
The cuisine, chef and concept for your catering business will ultimately determine the marketability and quality of your food services.
These three C’s are the foundation of any successful catering business:
The food remains the most important aspect of any catering business. If the food is not up to par, clients will not be happy. Every dish should be delicious, not just when you have finished cooking it, but also after sitting in a food carrier, banquet cabinet or chafing dish for several hours. Stick with the food you know how to produce well. >>Learn more about how to develop a catering menu
You can’t have delicious food without a superb chef. Perhaps you yourself have great cooking skills. But keep in mind that only small, exclusive catering operations can get by with the owner being the chef, since the owner also has to run all other aspects of the business.
If you want your business to grow big, consider hiring another chef to either execute your dishes or help you come up with new menu ideas. Wolfgang Puck doesn’t cook for all of the events catered by his business. He uses chefs and kitchen staff that he trusts will produce his cuisine up to his standards.
You won’t be able to master everything, so choose one business concept that you are knowledgeable about and become the best at it. Popular successful catering concepts include the following:
- Gourmet catering
- Comfort foods
- BBQ catering
- Ethnic catering (tacos, Italian, Cajun, etc.)
- Wedding catering
- Sandwich and lunch catering
By specializing in a specific type of food or event where there is a demand, you will be able to develop a clearer marketing plan for targeting that specific kind of clientele.
For example, gourmet caterers target well-off clients or corporations holding holiday parties, wedding receptions or other special events.
Sandwich caterers, on the other hand, often target corporate meetings or office lunch parties. >>Learn more about developing a catering concept
Also, putting your logo on staff shirts or vests is a great way to market a catering business.
Marketing & Clientele
Once you have decided on a concept and cuisine, you should have a pretty good idea who your customers might be. There are many ways you can market your catering business to these customers. Develop a detailed marketing plan, which might include some of the following:
- Designing menus or brochures to hand out
- Creating a website
- Partnering with event planners & venue owners
- Advertising in wedding and event journals
- Establishing contacts through friends and family
Brainstorm a list of contacts who may be able to help you find clients. The best way to market a catering business is through word of mouth. If you have any corporate contacts, see if you can cater their next event.
If you know someone who is getting married, assure her that you will make her wedding reception and rehearsal dinner memorable for all the right reasons. It will take a while to build up a loyal clientele and a good reputation, but the more contacts you already have, the faster your business will become profitable. >>Learn more about marketing a catering business
Venue or Off-Site Catering Capabilities
You cannot cater an event if you don’t have any way to transport food to the venue. Consider partnering with a local venue like one of the following:
- Convention center
- Art center
- Reception hall
Offer to refer your clients to them if they do the same for you and make you their preferred caterer. You can even try to find a commercial kitchen that is built into a venue, so you do not have to transport your food off-site for every event.
Whether or not your kitchen is located at a popular venue, you will probably need special materials and menus for off-site catering. Not all food transports well. Consider setting up temporary kitchens for cooking on-site and invest in enough food transport supplies to make your operation portable.
>>Learn more about transporting food for off-site catering
When asked what the most challenging aspect of their business is, many food service operators say “personnel.” It’s a challenge to find employees who can keep up with the fast pace and high stress levels of a catering business. If employees stray off-course on their timing, work pace or attitude, it can ruin an event.
Look for servers, cooks, buffet runners and event coordinators who have experience in food service. When hiring, always check references, and look for recommendations from people you trust. This will reduce the risk of employees not showing up at a key event, or quitting after only a few days on the job.
Event Planning Skills
Events come in many forms, from celebratory events like weddings and birthdays, to corporate or educational events, such as business meetings or conferences, to promotional events like the opening of an art gallery, new store or museum.
Event planning is the coordination of the following factors, which must come together to form a successful event:
- Finding a venue
- Arranging for entertainment, guest speakers or photography
- Planning the food and drink
- Mailing invitations
- Coordinating parking and transportation
- Decorating for the event, speaking with florists, etc.
- Setting up for the event
- Making sure the event runs smoothly
While only one of these aspects of event planning involves actual catering of food and drink, caterers often perform the other roles as well. The more services you can offer in addition to catering, the less work your client has to do.
For example, if you partner with a hotel or event center, you have the venue covered. If you have contacts or partnerships with DJs, musicians, florists and photographers, you know all the right professionals that can make the event happen.
Determining ahead of time exactly how involved you will be with event planning will give you a better understanding of the marketing tactics and capital you will need to get your business going.
On the other hand, even if you begin as a catering-only business, you may eventually find that clients want you to help plan other aspects of their events, so you should be thoroughly prepared for this.
Once you have gained knowledge in all of the above aspects of catering, you are ready to formulate your business plan. When writing your business plan, provide details that explain how you will handle all of these features of your business.
A detailed business plan will legitimize your business prospects for investors and lenders. But even more importantly, it will provide you with a comprehensive plan for success.
The more fleshed out your business plan, the more solutions and ideas you have at your fingertips to ensure survival in the competitive world of catering.