Managing a food catering business can very overwhelming. The work involves a lot of planning, arrangement, and the market is already flooded with a lot of players. As of today, the catering industry is estimated to value at about 15,000-20,000 million dollars. The industry has approximately witnessed an annual growth of 25 to 30%. To start a catering business, you don’t require high investments, at least not initially, which is why it is a very lucrative option for people who want to start something of their own.
Catering goes way beyond cooking. You can begin by thinking about your target audience and the size of your business. If you want to start out as a small scale catering service, you need to focus on getting orders for 12-50 people. On the other hand, if you have help, required finances, and are confident to go large-scale, you just need to plan and distribute tasks well.
Whatever you choose to do, we have everything you need to brush up on before starting your own catering business.
Steps for Starting a Catering Business
Check out this step by step guide and be sure to make a checklist so that you don’t miss out on anything.
1) Create a Business Plan and Pick a Niche
Your aim is to create a business model that revolves around the space rented, your availability, and storage requirements. It has to cover all the investment expenses and costs for the first few months. You can only create a plan after you have identified your potential customers and have researched well on the marketplace.
If you want to get into a full-time catering business, your requirements will be different. For instance, you will need a cooking and permanent storage facility. You will also need a place with good plumbing so that you can easily set up your kitchen space. For a full time, you can arrange a seating area at the storefront so that your customers can taste your food and make their decision right away.
If you want to start a part-time catering company, you can look for a premise that includes renting on a day-to-day basis. This way you can save money, choose to work just a few times a month or just on weekends.
Once your kitchen is all set, it’s time to finalize your cuisine. The best way to understand what your niche is by getting genuine feedback from the consumers. Once you have the feedback, then work on your negatives and call for essential wholesale restaurant food supplies. This technique will help you gain more customers as well as pre-orders before your business is even started! A few ideas that you can begin with include contract catering service, banquet lunch boxes, and private chef service.
2) Know Your Kitchen Area and Rent
The minimum area you will need even for a small scale catering business is around 70-80 sq. Even for a small scale catering service, you will need about 15 to 20 people. If you are serving over 25 people, then you will need a kitchen area spanning about 100.
The advantage of setting your own kitchen is that you can rope in more clients. Your own kitchen signifies efficiency and good food hygienic. Obviously, the rent you will be shelling out for such places will differ. If you are looking to set up your catering business near a prime location, then you will have to pay more than the usual price.
3) Start Sorting Your Capital Sources
The third step involves jotting down what are your capital sources. You will also have to figure out how you are going to use your finances for rental costs, on-site equipment, licenses, and various other expenses. Research well and get complete details about the right sources required for your capital. You could rope in investors; you can use your own funds or you can also take a loan from the bank.
The average budget you will need to kick start your catering business is ideally around $10,000 to $15,000. The amount is sufficient to cover your expenses for a few months, including the transport, licenses, kitchen rent, and other permits. Your budget will vary depending on your preferences. While calculating the budget, don’t forget to make note of the smaller costs such as workers, cutlery, table decoration, napkins, etc.
4) Start Purchasing the Equipment
Once your finances are sorted, it’s now time to invest in the equipment that you will need for your kitchen on the site. Some major instruments you will need for your kitchen include refrigerators, buy kitchen cabinets, fryers, a few burner stoves, 2-3 compartment sinks, and stainless steel prep tables, some bulk canned vegetables. Apart from that, you will also need other types of equipment, as mentioned here:
- Cooking Oven
- Tin Foil
- Plastic Wrap
- Serving Equipment
- Beverage Station
- Disposable Containers for Storage
- Garbage Bins