A Complete Guide to Starting Your Own Catering Company
January 18th, 2021
If you love cooking and entertaining, you might be a natural for the catering game. But as well as having a flair for food, you also need to be independent, organized, energetic, and able to work under pressure. This guide to starting your own catering company can help you decide if you have what it takes to turn your culinary passion into a successful business venture. Providing you tick the right boxes during preparation, you’ll give yourself the best chance of making it a success. This guide covers what you’ll need to hit the ground running as a fully-fledged caterer.
Before you start
There are a number of things to consider before you start. But most importantly you should start by writing a business plan. There are many resources just a few clicks away through a simple Google search to get you started. We suggest looking for a reputable resource, such as a Small Business Bureau or business accelerator program. Overall, you want to ensure you have the following areas written out and calculated before committing to any expenditures or catering events:
- Company description
- Market analysis
- Organization and management
- Service and product line
- Financial projections
While writing your business plan, think about what area you will operate in and what food you’re going to provide. Researching what other caterers in your area are doing can provide ideas of how to stand out and differentiate your offerings.
Do you love to make finger food, main dishes or desserts, brunches, lunches or dinners? The kind of food you choose to make will go a long way towards pinpointing your target market. For instance, lunches with sandwiches, quiches and salads have corporate written all over them, while appetizers and cocktails are popular at parties and social events.
Once you’ve narrowed down the kind of food you want to provide, you can then prepare a rough menu of potential dishes, giving you an indication of the kitchen equipment and ingredients you’re going to need.
Remember, everyone is different and you’ll want to provide options, so if you intend to feature spicy food, make sure you have a non-spicy alternative on the menu as well. Vegetarians, vegans and those with gluten and dairy intolerances will also need to be catered for, but ensure you’re calculating these dietary requirements into your financial projections, as they can get costly very quickly.
Once you have your menu, you then need to set your prices. As well as the cost of the ingredients, you’ll need to factor in the hours you and your staff (if applicable) will put into the job, the cost of catering equipment, transportation costs and the profit margin you hope to achieve. The trick is to do all this without making your prices unreasonable.
Financing, licenses and equipment
Once you’ve decided on your menu and prices, you’re going to have to spend some money. While you may have a fully stocked kitchen at home, unless it has commercial grade surfaces and appliances, you’re going to have to find a commercial premises to operate from.
Regulations vary in different countries, states and territories, but if you plan to prepare what is considered ‘high-risk’ food (basically anything other than baked goods), you’ll need a food license, and will be subject to regular health department inspections. These vary country-to-country and state-to-state, but a simple Google search should be able to point you in the right direction.
If you don’t want to use your credit card to buy kitchen equipment, you could consider crowdfunding or applying for a small business loan. If you can’t afford to rent your own commercial premises, try and find a restaurant kitchen that only operates at night and rents kitchen space by the hour during the day.
Your kitchen equipment will depend on the type of food you are preparing, but will usually include industrial grade appliances, multiple sinks, ventilation hoods, grease traps, hot and cold storage and a full range of pots, pans and cooking utensils.
For example, as an event caterer, your catering equipment may include serving platters and utensils, plates, silverware, glassware, display trays, chafing dishes, linens, napkins, table decorations and centerpieces.
You might start out using your own car to transport everything to your catering jobs, but eventually, you’re going to need a refrigerated van to streamline the process. When you do, look for one that has plenty of storage space for food, tableware, linens and other equipment you may need for a job.
You’re also going to need a supplier because once your business gets underway, you’re not going to have time to shop around at wholesale food vendors for the produce you need. Apply for an account with a supplier and have your ingredients delivered when needed.
You may also need to hire staff as your business grows. You’ll have to deal with taxation, superannuation or social security, and workers compensation. At this stage, it would benefit you to hire the services of an accountant to ensure your books stay in order, and your business remains compliant.
Growing your business
Once you launch your catering business and start to build regular clientele, you’re going to be very busy. The trick at this point is to find the time to grow your business, and that means marketing. There are lots of simple and inexpensive ways to market, including:
- Online – create a website, Facebook and Instagram page featuring mouth-watering pictures of your food and testimonials from happy clients. Write a blog that portrays you as an industry expert.
- Advertise – take out ads in the local paper and in publications relevant to your target audience (i.e. if you cater for weddings, advertise in wedding magazines and on wedding websites).
- Network – attend trade shows, join professional associations and network with other businesses to get your brand out there and recognized.
Word of mouth is one of the best forms of advertising there is, so make sure people are aware of your business and saying nothing but great things about it.
Things to keep in mind
Things to keep in mind when running your catering business include:
- Get insurance – every small business needs insurance (liability insurance at the very least).
- Be a specialist – don’t try and be all things to all people. Stick to what you are good at and don’t get out of your depth too early by taking on jobs you don’t have the resources to handle.
- Do your homework – check every venue before the job to ensure there are no nasty surprises (i.e. make sure it has seating capacity, vehicle access, running water, electricity, etc).
- Diversify – if there is a lot of competition in your area of catering, try thinking outside the box. Consider specialty markets such as gluten free, halal, vegetarian and organic foods, gourmet hampers and picnic baskets or weekly meal preparation for time-poor clients.
And finally, as your catering business grows and starts becoming profitable, consider purchasing software to improve the efficiency of processes and management of tasks. A good software solution that’s dedicated to catering can take your business to the next level with:
- Better online ordering – customized to allow for specific details such as delivery times and kitchen instructions.
- Total mobility – accessible from anywhere on any device.
- Full automation – order confirmations, quotes and invoices sent out automatically rather than manually.
- Better oversight – reports and analytics to help with business decisions and show where improvements can be made.
- Secure payment handling – a secure payment checkout that is PCI compliant.
- Full integration – compatible with a range of different systems such as Xero, MYOB, PayPal, Deputy, Square and Google Maps, for a totally integrated business solution.
Be prepared with the best software
As a cloud-based, catering-specific software solution, FoodStorm has been designed exclusively to address the challenges your catering business will face. With the features you need to slash admin time, it is designed to automate your processes, generate more sales and delight your customers. For more information or to speak to a specialist, contact our friendly team online at FoodStorm.