Wednesday, July 23rd, 2014

Start a Catering Business

The catering business is a demanding business but offers excellent opportunities for both full-time and part-time caterers. As a caterer, you can use your skills to cook food on a mass scale and serve it to parties, receptions, conferences etc. However, in doing so you must ensure that both the quality of cooking and hygiene standards are high.

Skills: The catering business calls for great organization skills. You should be able to plan your menus in advance, arrange supplies and be able to cook the food on time either alone or with the help of hired cooks. The quality of the food must be outstanding otherwise you will not get any repeat orders. The best persons who are suited to start catering business are those who have worked in hotels, restaurants and canteens of large organizations. They know what it is to cook food on a large scale. However, this does not mean that others can’t do it. Anyone can get into catering business if he loves food, and can arrange to prepare food for large groups at short notice.

Get a License: You need to obtain a licence from your local Health Department before starting your catering business. The Health Department conducts regular inspections before and after issuing the licence to check if you meet the hygiene and sanitation requirements laid down by the department. The food operation area should be separate from your home kitchen as required by the law. Also, there must be separate sinks for washing food and for cleaning utensils.

Determine Your Product and Market: Before starting your catering business, you must determine the type of business you want. Your catering business may be focused on supplying bakery products or supplying lunch packs for events, conferences, picnics, etc. You also need to study the market to find out if the demand for the product exceeds supply. The other questions that you need to ask yourself are:

  • What’s the competitive advantage of your business?
  • Who are your target customers?
  • What are the strengths and weaknesses of your competitors?
  • Where will you obtain supplies at competitive rates?
  • What will be your promotion strategy?
  • Do you need to employ staff to help with production, service, and cleanup?

Start-up Costs: One advantage of catering business is that you can minimize your start up costs by taking on rent kitchen facilities, utensils, tables, tablecloths, serving equipment etc. This will allow you to start with a low capital and plough your profits back as your catering business grows. It also gives you an opportunity to evaluate your skills as a caterer and as a businessman. You can always exit the business if hyou find that you are not made for it.

Doing Business: You need to develop a simple contract that should include the following details:

  • Date, time and location of the event;
  • Room set-up, decorations, menu etc.
  • Estimated and guaranteed attendance;
  • Pricing arrangements and potential price increases;
  • Deposit required and discount offered for full down payment
  • Cancellation provisions because of illness, broken engagement or death.
  • Applicable taxes

The contract should also give in detail the food that is going to be served right from soups and starters to desserts. Each dish should be clearly defined so that the customer does not feel cheated.

Pricing: You should arrive at your price by adding the cost of materials, overhead costs, labor costs and profit margin. You may charge the same as your competition, more than your competition or less than your competition. However, much would depend on the services that you provide. If your services are rated high then you can surely charge more than your rivals.

Promotion: There is only one way to promote your business, and that is to earn a reputation of being a good caterer. You will find that the clients contact you, instead of your going to them. Of course, you will still have to print flyers and business cards and distribute them across the city. You should also list your business in the city’s yellow pages.