If you have a knack for cooking, love entertaining, enjoy working with people, have strong organisational skills, and dream of being your own boss, entering the catering industry may be the career calling you need.
From drawing up a detailed business plan for success and researching the local market to obtaining the necessary permits for operation and purchasing essential equipment, such as storage containers, cooking appliances, and a large coffee machine for business needs, you can bring your catering dream to life.
Market Research
Before starting any business in any industry, you need to know the market you are entering, competing companies in your local area, and the types of customers you will be trying to attract. This market research is crucial for establishing whether there is a demand for catering companies and helps you create a detailed business plan.
Research local caterers to understand what menus they offer, the types of events they typically serve, approximate prices for their services, and any customer reviews that can give you better insight into what they are excelling in and what may be lacking.
Determine Your Niche
Successful catering companies find a niche to fill in their local market. This may be in the wedding industry, catering for corporate events and working offices, or becoming the leading business for outdoor conferences and parties.
The largest markets for catering businesses are weddings and large-scale corporate events. However, there are plenty of opportunities outside of these options should the market already be fairly saturated. You can concentrate on clients that require catering for meetings, training sessions, or workshops. Alternatively, you can provide food for other commercial businesses, such as coffee shops, hotels, or concessions that purchase desserts, baked goods, and ready-to-eat meals.
Create a Business Plan
A detailed and well-constructed business plan is one of the most important tools for any business to be successful. This plan essentially serves as a roadmap to success and can be used to secure essential business loans and attract investors or business partners in the future.
The optimal business plan should include an executive summary and a detailed overview of the entire business, as well as a business description that lists essential facts, such as operational plans, proposed location, projected costs, and staff profiles.
It must also include your market, customer, and competitor analysis, as well as menu and service offerings, market strategies, and a detailed summary of financial projections and goals to illustrate your path to profitability.
Secure Licenses & Permits
To operate your catering business legally, you will need to obtain a range of permits and licenses to ensure compliance with industry guidelines. There are five main types of permits you will likely need, depending on where you locate your business. These permits encompass basic business, operational, zoning, health and safety, and construction requirements.
In order to ensure you obtain the necessary paperwork for operation, it may be worthwhile consulting with a lawyer whose specialty covers startup businesses. Furthermore, applying for permits is a great opportunity to secure insurance that will protect you, your staff, your clients, and your business.
Build a Menu
If you are a foodie at heart and have been dreaming of starting your own catering business for a while now, you have no doubt spent many nights staying up late thinking about the delicious meals you would serve. The beauty of catering is that it allows for a great deal of creativity in menu planning. While customization and menu expansion can be considered further down the line, it is best to offer a limited and set list of options when first starting out.
This will allow you to better plan and order any supplies you will need and establish efficient preparation processes to work quickly without lowering the quality of your dishes. The menu you build will be strongly influenced by your cooking style, the market you are catering to, your personal capacity, and what your cooking facilities can accommodate.
Find a Location
To establish a legitimate business, caterers must prepare their food in a kitchen that is licensed and authorized by the local health department. This often leaves you with three main options: rented commercial kitchen space, on-site kitchens, or home kitchens.
Renting commercial kitchen space increases operating costs, but it provides immense flexibility in how you conduct your business. It means you are always able to prepare meals for customers, regardless of the location of their event, and often allows you to prepare large quantities of dishes for bigger orders. However, you are typically responsible for delivering the food, requiring additional vehicles and equipment.
Alternatively, preparing food on-site may save you money on operating costs, but you will need to rely on the customers’ facilities to prepare the meals. This limits your customers to those who rent or own establishments with kitchens.
Furthermore, states differ in their laws and regulations regarding home kitchens for catering companies, so it is essential to consult with your local health department to determine what options are permitted in your area.
Equipment
The equipment you need may range from something as simple as new mixing bowls to an industrial food pressor, or a couple of coolers to half a dozen freezers. It primarily depends on the scale of your operation and the customers you have. While you are still establishing your company, make a list of the essential equipment you need in order to conduct business and contact a restaurant supply company to get a quote.
Initially, you can avoid purchasing specialized serving equipment, which can be rented from event companies, with the rental costs being passed on to your clients. However, as your business expands, you can accumulate standard items, such as basic dishware, glasses, and chafing dishes, that your customers can rent to use directly from you.
Additionally, consider opening accounts with food and general suppliers to stock your food inventory and disposable goods. Should you not be able to connect with a commercial supplier, discount clubs like Costco and Sam’s Club provide fantastic bulk purchasing options.
