If you’re trying to figure out how to start a catering business, you’re in the right place. It’s not an effortless “side project,” like some initially think. Rather, a catering business is exactly what it sounds like — a wholly separate business from your normal restaurant. And that means that it will require equal attention to properly thrive. Here’s how to start a catering business for your restaurant.
Introduction to Starting a Catering Business
When trying to figure out how to start a catering business, it’s important to understand that this isn’t a quick and simple process; rather, it takes a decent investment of time, money, and work. While that’s not to say that it’s impossible, it will require effort. You’ll need a few things to get a catering business going, namely:
Capital
- While it may seem obvious, you’ll need the money to get things rolling. If you have access to a restaurant already, your investment will be cut drastically by using pre-existing equipment.
Space
- Catering means prep, and prep requires space. Once again, having a restaurant will make this far simpler.
Clients
- This is the hardest part of catering, but we’ll get there, don’t you worry. Skip to the Research and Planning section for more information.
Benefits of Adding Catering to Your Restaurant
For restauranteurs, catering is an awesome opportunity. It provides a secondary revenue stream to your pre existing space, allows you to market your main business by simply doing your job (and getting paid for the privilege), and can also be a fun break of sorts from the usual day-to-day of restaurant life.
Increased Revenue Streams
As I mentioned above, catering provides a clear path toward more revenue for your business. Rather than staying in one place and having the guests come to you, you’re able to charge a premium to bring your restaurant to them; this generally means that you’ll need to staff accordingly in your main restaurant (or hire a team exclusively for catering), but that’s part of the price your clients pay to have events catered.
For many restaurants, a single relatively small catering event can make the business more than a whole day of operation in the restaurant. It takes a good bit of work, but once you reach the point where these events are the norm rather than the exception, you’ll be looking at a massive increase to your monthly revenue streams.
Enhanced Brand Recognition
One of the perks of catering that’s often forgotten is brand awareness and recognition. After all, you should be showing up in a branded van or truck, using branded equipment and clothing, and doing your best to chat up guests about your business. Half of catering’s appeal to most restaurants is the ability to naturally get your name in new circles.
Sometimes, this results in new guests at your restaurant and a nice boost to public perception. Other times, though, it means that you not only have one regular catering client, but now all of their friends and colleagues know that you’re the go-to for catering. That alone is often worth the investment of catering.
Customer Retention and Loyalty
On a similar note to the above, catering allows you to build your name with regular (and new) guests. While not all of them will have the time or money to hire you for catering, many will return to your restaurant if you give them a good experience while catering.
This is why it’s so incredibly important to not only show up and serve killer food, but to put on a smile and mingle. Meet your guests, chat them up about your restaurant and food, and encourage anyone that’ll listen to swing by.
Research and Planning
As with any business venture, research is incredibly important to the process of building a successful catering business. Let’s talk about how to do it right.
Market Analysis
First things first, a market analysis allows you to get a look at how well you should expect to be received. As always, I highly recommend hiring a professional to do a market analysis for you, but we all know to trust professionals to do their jobs.
The reason you should do this, though, is twofold. First and foremost, it gives a peek behind the curtain. There’s a possibility that the market is saturated (especially if you’re in a large city) or, inversely, that there simply aren’t enough events in your area to justify a full-blown catering business.
Secondly, when trying to figure out how to start a catering business, knowing what to expect will make the planning process so much simpler. You’ll know who your competition is (more on that shortly), who might qualify as a good potential client, and get a general lay of the land.
Identifying Target Customers
When trying to pick ideal catering customers, it’s important to think about it through the lens of repeat business. Single small events are great, yeah, but the cream of the crop are recurring events. This means that finding event and conference schedules at nearby hotels, hospitals, and office parks can generally be a great way to find potential clients.
If you’re more interested in single large events like weddings, try to find professionals in the industry like wedding planners — if you can impress them, there’s a good chance that they’ll recommend you to future clients.
Competitor Research
This is where things get a bit less clear. Figuring out your competition is a great step and an important part of the market research phase, but after that, you need to know what that means. Generally, this revolves around finding your own niche. Some businesses opt to focus on a highly specific subject, like cakes or BBQ, while others discover that they’re flexible enough to offer fully unique menus.
No matter how you approach the issue, keep in mind what your competition does best (and worst) — it’ll help clarify where you should focus your efforts.
Developing Your Catering Menu
Developing a menu can be stressful, yes, but catering allows a bit more creativity from your norm — so embrace it!
Selecting Popular and Profitable Dishes
When choosing a catering menu, it’s important to think about what you do best. Whether that’s a specific former or current menu item at your restaurant or something entirely different, you need to be able to execute it en masse in a short period of time and, crucially, for relatively cheap.
This means that elaborate dishes tend to go to the wayside in favor of ones that can travel well, hold over heat without sauces breaking, and present well in a relatively short time. In short, you should always have the following in mind when building a catering menu:
- What is the price per plate?
- How well does it travel?
- How quickly can you assemble and plate it?
Pricing Strategies
Pricing for catering will vary from business to business, but the standard approach is to charge for the cost of materials, labor, travel and setup time, and a little on top. Many businesses add an automatic (18-20%) gratuity, as well.
Generally, you’ll find that catering prices can range anywhere from $15-50 per person, though this can rise or fall depending on the type of food, venue, and the number of chefs and bartenders/servers that you’ll need.
Creating a Balanced Menu
This is a simple concept in theory, but it can become complicated if you overcrowd your menu: plan for every dietary restriction that you can. While you should certainly discuss restrictions and allergies ahead of time, try to have a balanced array of vegetarian, vegan, and omnivorous dishes!
Nobody wants to show up to a wedding only to find out that they get to eat fruit or bread instead of a full meal.
Setting Up the Catering Operations
Equipment and Supplies Needed
Every catering operation needs three overarching things:
Tools and equipment
- This includes everything you’ll need to cook the food, deliver the food, and present the food.
Mobility
- Whether this takes the form of a box truck or van, you’ll need a way to get your food to the client. Be sure to brand it clearly!
Food
- This is the most straightforward of the three.
Hiring and Training Staff
You’ll need to either hire new staff or train pre-existing staff for catering events. Generally, this is as straightforward as showing them the menu, walking through how to plate and prepare dishes, and working through talking points with servers and bartenders. No matter what you do, though, don’t expect to be able to throw even talented chefs and front of house into a catering event with no preparation.
Streamlining Logistics and Delivery
When preparing to deliver a catering order, you’ll need to have timing down to a science. Your space may limit how many of a given item you can prepare at once, so having hot boxes and steam tables to hold hot items will give you a bit of leeway. Similarly, coolers allow you to store cold items ahead of time — and that brings us to our last point.
When planning your menu, figure out what can be prepared ahead of time. Get as much done as possible the day(s) before your event so you can quickly and efficiently get things hot and ready for the event. This is even more important if you’ll be using the client’s kitchen (or their venue’s) to prepare on site.
Marketing Your Catering Services
Building a Strong Online Presence
When trying to get a catering business off the ground, you should have a marketing budget established and begin your campaign well before you’ve gotten your first client. Engage in email campaigns, ensure your website is SEO optimized, and get started on social media (if you haven’t already).
Leveraging Social Media
On that note, create separate accounts for your catering and restaurant sides and post on both regularly. This allows your pre-existing followers to tag along on your catering side and, importantly, build word of mouth.
Legal and Financial Considerations
Below, you’ll find a few important considerations to keep in mind while getting your catering business up and running.
Licenses and Permits Required
You should have licensing and permits long before you take your first client. Check in with your local health department and liquor board (if you’re serving alcohol) to be sure you’re properly licensed.
Insurance and Liability
This is a simple idea — you need liability insurance for your catering events. Just like in restaurants, should something go wrong and a customer get sick, you don’t want to be caught without insurance.
Launching Your Catering Business
Creating a Launch Plan
As with all things, we like to work with a plan here. So, once you have your menu figured out, the logistics of prep and service nailed down, and staff trained, it’s time to launch. Work with your staff to figure out the most effective way to begin service, especially if you’re doing a launch party.
Hosting a Soft Launch Event
It’s generally good practice to invite potential clients, important people in your area, and restaurant regulars to a soft opening launch event. This will generally be something that you pay for (rather than the guests), so account for that in your marketing budget. While it may sound like a large investment, it gives you a chance to catch any issues quickly and, importantly, get your foot in the door.
Gathering Feedback and Making Adjustments
When your launch party is done, it’s time to gather feedback. Your job here is to gather as much information from the people you just served as possible. Ask them about the food, service, presentation, and anything else you can think of. And, importantly, listen to it! Make adjustments as possible and don’t take it personally — feedback is why we do a soft launch before diving into full events.
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