From Food Passion to Successful Enterprise: A Guide on How to Start a Catering Business

From Food Passion to Successful Enterprise: A Guide on How to Start a Catering Business

From Food Passion to Successful Enterprise: A Guide on How to Start a Catering Business banner

Do you have a passion for the culinary arts and enjoy taking on new challenges each day? Then a career as a catering entrepreneur may be right up your alley. Opening and running your own catering business can be a great way to expand your culinary reach beyond a single restaurant location, opening up new doors of opportunity. Operating your own catering business also allows you to create new menus and diversify your offerings based on your client’s unique tastes and requirements.

Of course, successful catering ventures don’t launch overnight. Instead, they take years of formal culinary education, training, research, and planning. If you’re ready to get the ball rolling on your catering enterprise, there are some things you should know before you get started.

WHAT IS CATERING?

Catering refers to a service where a business prepares and serves food at a third-party location. One of the most common events that require catering, for example, is that of a wedding reception. When a couple needs to feed a large group of people at the reception (sometimes hundreds of people at once), a catering company may be called in to create a personalized menu and serve food at the event.

In addition to food preparation, catering companies may offer hosting, serving, and even bartending as part of their services as well.

Catering services may also be used to feed people at major corporate events (such as industry trade shows and conferences), birthday parties, graduation parties, retirement parties, and more.

Getting into the catering business can be quite lucrative if you know what you’re doing. However, it can take some time to get your business running, established, and profitable. In general, a new catering business can expect to bring in around $30,000 during the first year of operation. However, as business becomes more established and profitable, it is not uncommon for successful catering businesses to bring in more than $80,000 per year in profits.

IDENTIFYING YOUR NICHE

So, where should you begin if you’re interested in starting your own catering business? One of the most important things you’ll need to do at the beginning is to identify your niche. After all, if you think about some of the most successful catering businesses you know of, they likely have one thing in common: they specialize in something. Whether it be Italian cuisine, decadent appetizers, or spectacular desserts, an excellent catering company will have a particular niche.

Take some time to consider where your own strengths lie when it comes to your culinary skills. If you have unique experience and proven track record with a certain type of cuisine, it may make sense to start there. Or, if you have lots of experience with cooking for a particular type of event (such as a wedding), you might make that your niche.

Market Research and Target Audience

Next, it’s time to do some extensive market research. This will help you get a better understanding of who your target audience is and what they’re looking for when it comes to catering services.

One of the best tips to keep in mind when doing market research at the early stages of the game is to pull up reports and statistics on catering businesses in your area. How well are caterers performing in your target location? How many new catering businesses have recently opened and what are their areas of expertise?

Taking the time to research your competition is also wise, as it can give you a better feel for what they’re doing right (and what strategies you may want to adopt in your own business) and where they may be lacking. From there, you can aim to fill in service gaps and set yourself apart from your competitors.

Likewise, understanding your target audience and their pain points when selecting a catering service can go a long way in better serving your future clients.

BUILDING A BUSINESS PLAN

While it may seem like a formality, drawing up a formal business plan is a must for any aspiring catering entrepreneur. Not only does a business plan give you the opportunity to put your plans in writing, but it also forces you to think about some essential aspects of your catering business that you may not have otherwise considered.

Meanwhile, if you plan on applying for any small business financing (including loans and grants), there’s a good chance your potential lenders and investors will ask for a formal business plan to review.

Define Catering Services and Menu

As part of your business plan, be sure to include some specific details about your catering services and menu. What exact services will your company offer? For example, some catering companies may set up buffets and handle clean-up, whereas others may include hosting and serving as part of their services. Will you offer bartending services? If so, then you’ll need to obtain a liquor license.

This is also a good time to narrow down your menu a bit. You don’t necessarily have to create a list of all your final dishes, but you should at least be able to home in on the type of cuisine you plan to serve, along with some examples of potential menu items.

Marketing and Promotions Plan

Having a solid marketing plan is also a must when it comes to launching a successful catering business. After all, you can’t expect your business to grow by word-of-mouth alone. While you may not have a massive budget for marketing and advertising as a small catering business in its early stages, there are some things you can keep in mind to make your marketing strategy as cost-effective as possible.

Consider, for example, setting up dedicated social media accounts on Instagram and other popular platforms. From there, you can post quality, share-worthy photos of your best menu items to help spread the word without spending a penny.

SETTING UP YOUR CATERING BUSINESS

Depending on where you live, there are also some legal hoops you’ll need to jump through before you can start operating your catering business. Take your time to research and familiarize yourself with these important steps so you can plan (and budget) accordingly.

Legal Requirements and Permits

There are a few different types of licenses and permits that you may need. Again, these can vary from one state to the next, so you’ll need to do your own research to determine what your state requires. In general, some common permits and licenses you may need to start a catering business include:

  • Zoning permits
  • A general business license
  • A health permit

Location, Equipment, and Supplies

The location of your catering business will also play a vital role in your potential for success. Many catering companies choose to rent out their own commercial kitchens rather than prepare food on-site. Doing so allows you to have consistent access to the same equipment, cookware, and space with each new job you take on. However, this setup does tend to come with some higher operational costs.

Some catering businesses instead forgo renting out their own kitchens and rely on their clients to provide kitchens and equipment for food prep. This tends to be a more affordable option, but it also prevents your business from having a set location and requires you to adapt to the equipment and space your client is able to provide.

Ultimately, it’s best to consider your own business goals (along with your menu options) to determine which setup will be best for your catering company.

TEAM BUILDING

Your catering business can only be as good as the team you hire to help carry out your services. Even if you possess excellent culinary skills, the reality is that you will have little time to prep and cook food as the owner of a catering enterprise. Instead, you’ll need to hire a team of workers that you can trust to carry out your vision and replicate your dishes to the highest level of quality possible.

Even if you can partake in a lot of the prepping and cooking in the early stages of your business, this probably isn’t as sustainable as your company grows. Regardless, you’re likely to need a few employees to help you transport food, serve food, and set up and tear down at events.

Hiring and Employee Development

As you begin the process of recruiting for your catering team, there are a few things to consider. First, you may want to consider working directly with a temp agency or other recruiting agency to help you find the right people for the job. Working with a temp agency is also a great way to free up some of your own valuable time and resources while still finding qualified candidates.

Even after you’ve found the right people for the work, you’ll need to create and implement a training program that you can carry out consistently with your catering staff. Consider, too, whether you’ll provide uniforms or have your team follow a dress code.

BRANDING AND MARKETING

One of the best ways to set your catering business apart from the competition (and set it up for long-term success) is to really home in on your branding and marketing. Here are a few things to keep in mind as you consider your own marketing strategy.

Unique Brand Identity

Work to form your own brand identity so your clients can differentiate you from other catering companies in your area. This can be easier said than done, but over time, you’ll be able to narrow down the key differentiators that your business has to offer and build on those. Perhaps you’re the only catering company in town that also specializes in desserts and sweet treats—or maybe you’re known for your catering staff showing up in formal attire to every event.

WEBSITE AND SOCIAL MEDIA PRESENCE

Your social media presence can work wonders for your marketing, especially if you’re regularly posting photos of your work. Make sure, however, that you don’t neglect your website. Oftentimes, your website will be one of the first impressions (if not the first impression) that you make on a potential client.

When building your website, make sure your design is responsive so that potential clients can browse on both mobile and desktop devices with ease. Likewise, include as much practical information as possible, ranging from your catering menu and general pricing to contact information and more.

LOGISTICS AND OPERATIONS

Optimizing your catering company’s logistics and operations can go a long way toward your success, as well. From how you inventory and store your food to your customer service approach, there are a few best practices to keep in mind as you start out.

Efficient Inventory and Food Safety Protocols

Make sure you have an efficient system in place for maintaining your inventory. This includes keeping track not just of your equipment (such as cookware and utensils) but the ingredients that you keep on hand as well. Ensure that you have the proper equipment to maintain food safety protocols, such as warming dishes for transporting food and deep freezers for storing ingredients.

Streamlined Order Management and Delivery Processes

Make it as simple as possible for clients to place orders, and you’ll be off to a better start than many other catering companies out there. Ideally, you’ll be able to set up your website for online ordering. At the very least, create a simple catering order form that your clients (and your team) can easily understand.

Take time to properly train and practice your delivery processes as well. Shorter delivery and set-up times can improve your bottom line while enhancing the client experience, so these small details matter.

Excellent Customer Service

Never lose sight of the importance of customer service in each job you take on. At the end of the day, your clients and their guests need to feel valued. If your clients have a good experience, word-of-mouth recommendations and referrals can go a long way in helping you grow your business.

FINANCE MANAGEMENT AND PROFITABILITY

If culinary arts is your passion, the idea of managing finances may not be the most exciting part of running a catering business. Still, finance management and profitability are crucial to your long-term success.

Budgeting, Revenue, and Expense Tracking

Establish a thorough and reliable bookkeeping system early on that keeps detailed records of your spending, profits, and other aspects of your budget. Quality bookkeeping software can go a long way in saving you time and hassle while making things like payroll and taxes easier.

SCALING AND GROWTH

Once your catering business has its footing, follow these tips to scale and grow even further.

  • Assess Business Performance and Customer Feedback – Take reviews and feedback seriously. Create a system for assessing performance and making improvements as needed.
  • Identify Opportunities for Expansion – Keep an eye on new opportunities for expansion. Take time to assess these opportunities and make sound decisions based on market research and other factors.
  • Maintain Quality – Never sacrifice the quality of your services or menu items for the sake of perceived growth. Without consistent quality, your business will fail.

KICKSTART YOUR CAREER WITH HELP FROM JOHNSON & WALES UNIVERSITY

If you already have your Associate of Science in Culinary Arts and are ready to take your education to the next level, JWU’s 100 percent online Bachelor of Science in Food and Beverage Entrepreneurship can prepare you to open your own business or partner in a food or beverage startup. From there, you’ll have the skills and experience needed to start your own catering business with confidence!

For more information about completing your degree online, complete the Request Info form, call 855-JWU-1881, or email [email protected].

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