How to Start Your Own Catering Business
Most of us enjoy attending parties, but I used to enjoy throwing them. Over time, the knowledge that I gained from putting together parties just for fun allowed me to start a small, home-based catering business. While it's been years since I ran my own catering (and party planning) business, the lessons I learned apply today as much as they did way back when. Here they are:
- Pick your catering niche, before you spend big bucks. Sometime in the mid-1990's, just before the coffee craze really took off in a big way, I thought I might start a tiny pushcart-based coffee/espresso business. I mistakenly dropped over two grand on a custom-made pushcart before discovering that a not-so-well-known chain of coffeehouses going by the name "Starbuck's" (heard of them?) were about to take over the world. The lesson: if you're going to start a catering business, find an underserved niche. Perhaps there are dozens of caterers in your town, but how many of them specialize in Greek food? Cajun cooking? Indian or Moroccan cuisine? You get the idea. If there are three or four barbecue-specific caterers in your area, then be the only one that offers vegetarian fare for large parties.
- It's not "location, location, location"; it's "be legal". One advantage to running a catering business out of your home is the fact that you aren't fixed to one location - your place of business changes every weekend (or evening). So, unlike many businesses that serve the public, deciding on a fixed location for your catering business won't be a concern. However, most municipalities have stringent codes that apply to any business (including caterers) that deal with offering food or beverages to the public. Obviously, adhering to these rules will keep your customers healthy and you out of trouble. These codes can also give your new business some very significant credibility. I generally don't feel that anyone starting a new business should spend too much time or money on things like expensive signage, business plans, registering a DBA name, etc.; because (sorry!) your business may not succeed. You could wind up with a lot of debt and time wasted on something that was never meant to play out. But, where starting a food-based business is concerned - then yes: follow your town's codes, get the necessary licenses; and then start finding customers.
- Plan ahead. There is always some planning and paperwork involved in advance before you start any business. Again - don't spend too much time and money on things like business cards or websites (wait until if/when your business actually starts to make money). Instead, direct your attention and funds toward things that really matter. For example, find out as much as possible about the party centers where you expect to be operating as a caterer. What time do they expect you to be packed up and off the premises? Can you offer booze, or will you need special permits? What kind of cooking equipment do they provide, and what should you bring yourself? What kind of help must you bring with you, or will the party center provide a wait staff and security? How much to rent a margarita machine? Get these things nailed down before you start your catering business.
- Do some research. One of the standard pieces of "advice" from "experts" regarding starting a business is: "get a part-time job in the field you wish to start a business in". Yeah, right. Like you have time for that. Instead, read some books, rent the movie "Wedding Crashers", then sneak into a couple of weddings or catered affairs! (Hey, can't hurt to see who you might be competing against.) Or, visit a trade show near you that "caters" (pardon the pun, couldn't resist) to caterers. Any catering business is going to take your time and patience before you make your first dollar, so keep your day job. Just do some preliminary research before you jump into the world of catering on a professional basis.
- Line up your suppliers in advance. Don't wait until you book your first catering gig to figure out where you need to buy your food and supplies in bulk. For most items, Sam's Club and/or Costco will be fine. However, not everything you'll need will be available from these outlets, so do your homework. Find the wholesalers and restaurant supply dealers in your community. Locate used commercial equipment on eBay or Amazon instead of buying brand new stuff. Fortunately, the web makes finding commercial grade food prep equipment and exotic foods a breeze. Just make sure you give yourself some lead time to line up your purchases before your first catered event.
- Go after affluent clients - skip the budget conscious. The "frugal" blogs out there tout the advantages of living a financially sensible lifestyle, but you won't do yourself any favors as a business owner by seeking out a clientele that is watching every penny. You will be forced to compete solely on price, and this isn't what you should be doing within a service-oriented industry like catering. Your stock-in-trade is service , period. Someone will always be cheaper than you, and that applies to any business, not just catering. Compete on service and quality, and charge accordingly. Realize, too, that some of your clients may be turned off by the lowest-priced caterer. They'll know that they aren't going to get the best service or food. Eventually, you can stock your website with photos of your events as well as testimonials from satisfied clients, thereby justifying your higher price over time. By the way, while we're on the subject of budgets, make sure that you accurately track all of your business income and expenses with an online budget planner. You'll need to do this for tax purposes and to figure out if your catering pursuits are worth putting more money into - or if it's time to exit the business.
- Remember: "safety first". I've worked in situations where safety got little attention. Like the time I catered an affair which featured a funnel cake stand. Located near the stand stood a large, commercial-grade propane tank. During the event, the tank sprang a leak at one of its valves, and a huge propane-fueled flame burst from the top of the tank. The flame shot up a few dozen feet. Time to think fast: I had to get the people who were helping me as far away from our work area as possible, quickly. No one was seriously hurt, though a few folks attending the event had to visit local hospitals for some quick checkups. Do not underestimate safety, and do not use questionable equipment - especially cooking equipment that requires fuel and flame.
- Small is beautiful. At some point you'll notice your competition has the latest equipment, expensive trailers and trucks, and perfectly uniformed staff members. You may have only a cute logo, some t-shirts, and plenty of help from friends and family. But this shouldn't mean that your food can't be top notch, or that your service should be second-rate. You can still do a reasonable business for your size. If you must, then go ahead and rent equipment, trucks, or tents - don't buy them. Your competition might be bigger, but it also has a lot of overhead to go with that size. Don't get into a huge hole when you start a catering business (or any business). It's not worth the grief.
- Marketing is everything. These days, you have social media - Facebook, Twitter, Pinterest - to help you market your catering business. Create a Facebook page and post lots of pictures from your events. Post photos of your decorated cakes, your helpers, your main courses, everything! Sometimes marketing is everything, especially when you are just getting started. One or two successful events may provide you with enough word of mouth marketing to keep you busy for months, or even years, to come. Beyond the word of mouth, how important will your marketing efforts be? Just ask Coca-Cola, the successful marketer of fizzy, caramel-colored sugar water for well over a century. A dash of "fluff" in your website or on your business cards won't kill anyone, at least until you get some parties under your belt. That's when you can start building a photo album which shows off your professionalism to prospective clients.
- Can you expand beyond your core catering business? What can you sell on top of your catering services? Can you cook meals for busy professionals? Do the grocery shopping for a client's elderly parents? Put together and market your own "secret sauce" or provide specialty cakes? It's your business - do whatever you want. Maybe you'll discover an underserved niche that could bring in more income than catering!
- You will work hard, but pull the plug if you must. Sorry, but the only ones who will truly be having a good time at the events that you cater will be your clients and their guests. You'll be busting your hump. Obviously this hard work should pay off in the form of future catering gigs; so it will be worthwhile. But don't go into catering because you expect to make money while having fun at the same time. You're going to be running a business - so focus on keeping your clients happy. If you want to party, then attend parties - don't cater them. You may start a catering business, then discover that your heart really isn't in it. Don't beat your head into the wall repeatedly if your sanity and/or finances are taking big hits from your business. It isn't worth it. Trying to "keep going" at all costs doesn't make you tenacious - it might just mean there isn't a sufficient market for your service in your location. It's business, not personal. You'll probably know early on if your catering business is worth continuing after your first few gigs.
A catering business will require you to be top-notch with four different aspects, in this order: 1) People, 2) Service, 3) Food, and 4) Organization (financial and otherwise). Whatever type of catering service you decide to provide - realize that even a business in a "fun" environment is still a business. Happy catering!