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.
As you begin this process, you will soon find how much you need a consultant to assist you, with professional analysis and observation. Though it may seem that putting it all together should be easy, in reality, you will find how hard it is. You face a choice, to work hard and risk everything on the hope that you made the right decisions or to seek professional guidance and help. You realize the costs of help may be high on the front end, but you must also ask whether the cost will be even higher if you fail on your own.
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?
Ultimately, you must ask where your talents and skills lay… in the creative production of events and food or in the development of a new business. If you feel confident that your skill set covers both, then you should proceed promptly towards opening the business and forget consultants. But if you are not looking forward to the requirements of setting up a small business, it may be best to call a consultant.
Let’s take a different path… you are opening a large hotel and want to build a catering and events business as part of your operation. How do you do this? In the same way. You must determine your resources, timeline and the skills of your immediate team in guiding the development of this key profit center.
In either the case of a small business or a large company, special events are big business. Being able to manage, coordinate and profit from them is no easy trick.
More than a decade ago, a client hired us because of an event they held. The owners of the establishment had divided their roles in two areas… Sales and Operations. However, coordination and organization were not the strengths of either owner. As the one in charge of sales brought the sale to contract at a very low price, he did not communicate the details of the event clearly to the owner in charge of Operations. When the latter planned the event (the wrong person to do this to begin with), he did not schedule anything correctly. The client’s guest arrived at 5:30, but the food and beverage wasn’t ready until 7:30 for an event scheduled for 6PM.
The events company lost the remaining balance of the deposit, and had to absorb all the costs of food, beverage and labor. Such situations are common. As Epicurus started the consultation, we delivered new systems, pricing and organization to the company, affording them to make a profit on their next event, only a week later. As we progressed, Epicurus placed a special events director in charge, taking all the work away from both owners, and placing it in professional hands.
That company has survived the past decade, making significant profit from event management and now hosts events for major companies.
From wedding planners to hotels and social organizations, event and catering business can be a successful, profitable enterprise. But as with all things, the flipside is that if not properly organized and managed, a catering business can fail quickly. External factors, such as weather, food costs, beverage and labor costs, and a myriad of other possibilities can affect your enterprise. How you are prepared to handle it will determine your success.