Starting a Catering Business – Primer

Starting your own catering business can be both financially rewarding and fun. Whether you cater events on a full-time or a part-time basis, the opportunities are excellent. Each catered event is a new experience and challenge with a new group of people. With the rewards and fun come demanding work, for which you will need stamina and the ability to work under pressure.

Determining Your Product and Market

The development of a business plan will aid you in planning a successful business. Prior to starting a catering business, you need to determine your type of business i.e., cakes, receptions, seated dinners, box lunches, picnics, and the type of food you will serve (primarily convenience or “from scratch”). Analyze your market. Ask yourself the following questions to see if your business venture will satisfy at least one of the following fundamental elements of success. If not, you probably do not have a viable business idea.

The questions are:

  • Will the business serve a presently unserved need?
  • Will the business serve an existing market in which demand exceeds supply?
  • Can the business effectively compete with existing businesses because of some “competitive advantage?”

Decide whom you will target as customers. Who is your competition? What are their strengths and weaknesses? Where will you get supplies? Decide how you will promote your business. Will you need to employ staff to help with production, service, and cleanup? What other skills do you need to make your business successful?

Start-Up Costs

You may choose to start your catering business by renting items to keep initial costs to a minimum. You may rent the use of kitchen facilities, utensils, tables, tablecloths, serving equipment and other items. This will allow you to:

  1. Build a reputation;
  2. develop some capital for investment and expansion;
  3. evaluate how much time and money you want to invest and the impact that this business will have on your family.

Developing a Creative Menu for Special Events

Factors affecting menu planning include the type of event, time of event, number of people to be served, available equipment, number of food preparers and servers and the amount of money to be spent.

The menu needs to include a variety of foods that are acceptable to the customer and the occasion. Be able to suggest menus that show a balance in color, texture, shape, sizes, flavor, cooking methods and cost. Plan to include nutritious foods from each of the food groups, including:

  • Meat, poultry, fish, dried beans, eggs and nuts;
  • Bread, cereal, rice and pasta;
  • Vegetables;
  • Fruits;
  • Milk, yogurt and cheese.

Plan for eye appeal by using at least four colorful foods on each menu or food tray. Plan for contrast in texture and flavor. Contrast crisp foods with soft, creamy foods. Use strong and mild flavored foods together. Balance light and heavy foods. Use foods that complement each other.

As a caterer, you will need to decide whether you will make all foods “from scratch,” or purchase some convenience foods. If you make all foods, consider your skills, equipment and time as you plan menus. Also, it is important to prepare a quality product of standard consistency. Develop a quality standard for each item. Use “high-tech” equipment designed to produce a consistent product. After considering skills and equipment, compare the cost of caterer-prepared items with purchase costs. Evaluate for cost savings and quality consistency. Do this for each item offered before determining a pricing structure.

Develop an information packet that includes sample menus and prices, other services you provide, and past events you have catered. Develop a portfolio of pictures that shows how food was presented at these events.

Every caterer needs to develop a contract to operate in a professional, business manner. Write the contract in simple language that both parties can understand and state the terms of the agreement.

Include the following items in the contract, as applicable. These are:

  • Names, addresses and telephone numbers of parties involved (buyer and seller);
  • Date of the agreement and date of the event;
  • Time of event;
  • Location of event;
  • Room set-up, decorations, tablecloths, etc., to be used;
  • Type of menu;
  • Estimated and guaranteed attendance;
  • Service arrangements;
  • Duration of activity;
  • Entertainment;
  • Pricing arrangements and potential price increases;
  • Deposit required (25, 30, or 50 percent of cost when the contract is signed);
  • Discount (if any) for full payment at the time contract is signed;
  • Cancellation provisions specifying cases of cancellation because of illness, broken engagement or death. The contract needs to specify how much of the deposit will be retained due to cancellation.
  • Applicable taxes;
  • Include space for signatures at the bottom of the contract form.

Carefully consider contract terms, write them in simple language, and print them in a size that is easy-to-read. This is to insure that everyone understands the terms of the contract.

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