Whether you want to cater to small, intimate events every day or huge parties for 100,000 people once a year, the catering business has a very high-profit margin potential. Some caterers are able to keep 66 percent of their profits before taxes. It may be hard to believe that number, but when you think about all the ways caterers can keep their costs down to almost nothing, it makes more sense.
You can start a catering business from your own home by turning a spare room into an office. You can use your own kitchen, but watch out for Health Department rules. You could also rent a kitchen when you need it from a restaurant, school, or church. You don't have to hire full-time waiters, bartenders, etc., because there are a lot of people who are willing to work part-time when you need them. There aren't many things, like china, flatware, glasses, tents, etc., that you can't rent for the day if you need them for a party.
About the only thing that will cost you money right away is advertising your services. You will need to carefully consider the market you want to reach and choose the best way to advertise to that market... If you want to cater weddings, you might want to talk to florists, department store managers, musicians, and people in charge of places that book weddings. If you're more interested in corporate entertainment, you should get in touch with the companies in your area (the chambers of commerce should be able to supply you with area names).
Know which side the butter is on
Word of mouth is by far the most important tool you'll need to use to market your business. Most brides, companies, and other groups won't try out an unknown caterer because they don't want to risk being embarrassed. If you were the chef at a successful restaurant and had a good reputation when you started your catering business, you can use that in your ads. If you have nothing to start with, you might need to be very creative to get your business going.
Maybe you'll need to spend some money on your own party and invite the bosses of local florists, department store owners, etc., or the decision-makers of local businesses. They won't risk their equally valuable reputations by recommending someone they don't know, so give them something they can remember and support.
Also, especially in the beginning, give the events you cater that little something extra. Do not cut the edges! Remember that you won't always get paid in dollars and cents. Your reputation is just as valuable, and maybe even more so in the long run. Remember that a little "extra touch" is often more effective and sometimes cheaper than advertising.
Where do you want to go?
In the catering business, you can grow as much as you want. You can buy your own facilities and equipment, hire full-time chefs and servers, use temperature-controlled holding cabinets and vans, or rent just about anything you need.
You might decide that you want to cut down on the middleman's profits by buying things like china, flatware, and tents that you rent often. You might want to make it easier for people to remember you by giving your business a "signature," like putting your logo on the side of your delivery van. People will see this logo as the van drives around the city and when it is at an event you are catering.
Things to Think About
In a restaurant, 70 percent of the work is about the food and the rest is about service, organization, etc. However, in the catering business, only 30 percent of the work is about the food, and the rest is about a delivery, transporting the food, setting up rental equipment, and juggling staff. In the catering business, what matters most is how well things are set up.
In the catering business, you also need to be a good "salesman" and have a personality that draws people to you. You will have to deal with business people, people who plan parties, and nervous brides. You will need to show your potential clients that you will not only serve a delicious meal, but that it will also arrive on time, look good, and be served quickly and quietly.
Catering is a good way to start a business, but it can also be used to start other businesses. You can be in charge of the flowers, the party location, or the theme. You can be both a caterer and a party planner, both a florist and a caterer, or both a caterer and a rental agent. Don't limit your options. Try new things!
Remember that people could go to a restaurant if they wanted to stick to a set menu, so be flexible. Make your menu suggestions, just suggestions (a starting point, if you will). Let the client tell you what to do, but don't miss chances to turn a small "do" into a big moneymaker. Don't be afraid to "bump up the bottom line" of an event when you see a chance to. You might be able to turn a barbecue into a Hawaiian luau with a roasted pig.
Make sure every party is a memorable one. When you go that extra inch, it can sometimes be a mile, and you can make a mile's worth of money. Your catering business is only limited by what you put in place yourself.
