How to Start A Catering Business
What does a catering business do?
A catering business or caterer works with individuals or businesses to prepare, deliver and service food for events such as bridal showers, wedding receptions, or corporate events. Popular menu items for catering include Chicken Cordon Bleu, pasta, soups, salads, appetizers, poultry or steak, and a variety of desserts. Once the event is complete, caterers are also responsible for cleaning up their areas.
What are the steps to starting a catering business from home?
Starting a catering business requires specific steps to increase the chances of success.
- Create your menu. First, select a limited number of main entrée menu items, appetizers, salads, and desserts. Limiting your menu will enable caterers to specialize and excel in specific food options.
- Select a commissary. In most municipalities, caterers are required to prepare their foods in a commercial environment, such as a commissary. Because of this, that will meet the needs of the caterer is a critical action needed before operations begin. However, if your municipality allows it, starting a catering business from home is a great way to save money.
- Decide on how you are going to advertise your catering business. Some companies prefer to use Internet channels, such as Google ad words, websites, and blogs to promote their business. Other caterers prefer to use traditional sources, such as mailers and word-of-mouth advertising. Regardless of your advertising source, make sure to have a strategic advertising plan in place.
- Develop a network of events places. By developing a network of places to hold events, caterers will not only be able to assist clients in food preparation but also referred them to reputable event spots to ensure an excellent experience. Another benefit from this action would be that caters will also be able to receive referrals from different event places as well.
- Get your Catering business license. In just about all areas, a business license is required to start a catering business. Make sure to contact your local government agencies to determine which licenses are applicable to your business.
- Write your business plan or hire a business plan writer. When starting a catering business, caterers often have a multitude of thoughts and ideas floating through their heads related to menu items, possible customers, advertising sources, and numerous other thoughts and ideas. However, aligning your actions with those of your employees, requires everyone to be on the same page, no pun intended. From this, having a written document for your catering business is essential for organization, focus, and seamless execution.
How much money do I need to start a catering business?
Funding a catering business is no cheap endeavor. However, identifying a range of costs for a startup is definitely achievable. Listed below are some categories and cost ranges for a catering business startup.
Catering business buildout.
Some catering businesses choose to select a commercial operation from which to conduct a business. In these cases, buildout costs may range from $25,000 to $90,000 depending on the size and scope of the catering business.
Operating equipment for a catering business may include a van for transporting foods, containers to hold the food items, equipment for keeping food items warm, and supplies for preparation and cleanup. These costs may range from $5,000-$40,000.
Advertising costs may be as little as $300 a month for as much as $10,000 a month, depending on budget and area of service. For most catering businesses, our business plan writers have found that between $500-$1000 is an excellent range for advertising. Keep in mind, that this advertising strategy is also coupled with strong blogging and continually updating social media with relevant information about the company.
Do I need a business plan for a catering business?
Having a business plan for exceeding a catering business is essential. For example, as you can see from the information above, starting a catering business requires numerous steps to be taken in sequential order. Without detailed plans for each step, unnecessary delays or additional costs may be a reward. To ensure a structured startup for your catering business, work with a business plan writing professionally.
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Author: Paul Borosky, Doctoral Candidate, MBA.
Owner of: Quality Business Plan