Start a Catering Business

The ease with which one can start in the catering business is well known. All you need is a customer and a kitchen right? Wrong! All you really need is a customer. Stick with me and I'll explain.

I have made some assumptions about you:

• You know how to cook or you know about food or you have a resource that can prepare food for you.
• You are somewhat of a Type "A" personality that can sell yourself and is not afraid to get out of the house and make something happen.

Do I need to be a professionally trained chef or at least have years of food preparation experience to start a catering business?

You don’t need any of this. What you do need is the ability to supervise trained professionals that will handle the food aspect for you. It’s a purchasable skill and one that you can purchase on a job-by-job basis.

Do I need a professional kitchen to get started?

Well you certainly need a kitchen but not necessarily one that has acres of stainless steel with tons of expensive equipment. Lots of people have started out of their apartments….my first kitchen was in a vacant warehouse without a toilet!

I am going to offer the finest homemade food using only the freshest ingredients possible...

Great, but your going to go bankrupt real quick. You can make food from scratch but don’t consider going this direction unless you already have a local reputation in fine dining. Most of your customers will not be able to tell the difference between a sauce made in the classic French manner from one made by Nestle’s Minors Brands. Your key to success is to feed a lot of people on a consistent basis with food that they love!

When I started my company our classically trained chef spent lots of hours and money making the best lasagna possible…..yet, once we started serving Stouffer's Meat and Vegetable Lasagnas our sales took off and requests for the recipe went thru the roof!

I'm only going to do one type of event...

Fine, if you’re in a large cosmopolitan market (L.A., San Fransisco, N.Y., Chicago, D.C.)… but if you don’t want to starve and really want to really build a business you’re going to have to do more than just cocktail parties or tailgates or weddings.

For instance, the one consistent type of business that keeps many caterers alive is wedding receptions. Daddy is always going to find a few bucks no matter how tough the economy is to give his daughter a nice reception. Weddings are the income source to keep your business going month to month.

Consider developing a wedding reception marketing plan that offers three different type of reception packages:

• Cocktail party
• Buffet
• The "Everything"

Include in each package everything that is required for a reception…. Rentals, appetizers, bar, dinner, florals, DJ, catering staff and wedding cake….for one lump sum per guest with a minimum of say 100 guests. You’ll find that after a while your customers are selecting the reception package you want them to have….and you're getting your costs tighter and tighter. You are subsequently getting great prices from your baker, florist and DJ because you’re giving them more and more events.

I have no idea about the costs involved...

The rule of thumb in my business is 1/3 for food, 1/3 for labor and 1/3 for overhead and profit. Special advice: Your company may be rolling along and you are spending thousands of dollars with suppliers only to realize that the average housewife is getting fresher produce and lower prices at Sam’s Club. Here’s how you level the playing field. Ask your local foodservice provider to provide you with credit. Fill out the application and then once approved ask them for a discount for paying C.O.D.! When you first start out pay for everything….don’t put anything on credit until you know you can pay for it.

I could tell you numerous stories about "successful" caterers that don’t exist anymore because they took the money that they had set aside to pay regular expenses (suppliers, taxes, workmen’s comp, rent, insurance, etc) to pay their own mortgage payment and suddenly they wake up owning everybody!

I don't need to worry about the competition, right?

Not so fast. Before you start your business, contact every caterer in your market and ask for a menu packet. Carefully look at each one and analyze how they approach the business. Talk to your friends who have hired caterers and try to get a copy of the final invoice. This you need to do! You’re not going to survive if you think you can get $25.00 per guest for a cocktail party when everyone else is only charging $15.00. I don’t care how good your appetizers are! To learn even more register with them to be an ‘on-call’ server…Work a few jobs to see if you like it.

What are the keys to success?

Selling your next job. If your good at "kicking in a strangers door" and finding business they you will build a successful business. Caterers are used everywhere and all the time….safety meetings at factories, new route announcements for airlines, chamber of commerce cocktail parties, search committee breakfasts at the local college, bbq’s for the doctors offices and the list goes on. People eat three times, or more, each day. You’re the resource.

You can hire the chef, you can rent the kitchen space and everyting else you need….all that you have to do it sell and coordinate the job.

Good Luck.