How to Start a Catering Business

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A catering business should focus on your customers’ needs, not your recipes.
A catering business should focus on your customers’ needs, not your recipes. (Image: boggy22/iStock/Getty Images)

While success in the catering arena requires creating tempting menus customers will want, it’s how you promote and financially manage your food services that will make or break you. The best cooks or chefs don’t necessarily make the most successful caterers. You must execute fundamental business strategies adapted to your marketplace to make a profit. Following the “Four Ps” of the marketing mix -- tailored to catering -- you can increase your chances of launching a successful catering company.

Product

The first step in creating a catering business involves deciding exactly what services you will offer. This can include corporate or private parties, home meal delivery, private chef service, plated dinners or buffets, banquets or box lunches. You can specialize in one area to create a narrow brand that positions you as an expert. Alternatively, you can offer a broad range of catering services, creating separate sales materials for each. Examine your marketplace to identify your competition and who is buying catering services. Determine if you’ll need to outsource part of your services, such as baked goods or the bar.

Price

Analyze what your competition is charging for the services you plan to offer. Determine if you want to charge a lower price to target budget-conscious customers and undercut your competition, or charge higher rates to create a higher perceived value. Your expenses will ultimately determine what you can charge and make a profit, but starting with an idea can help you select your menu themes and items. Create a budget that includes your estimated expenses per party, your projected business operating expenses, and the profit you want to make. Include the equipment you’ll need to prepare, transport, heat and serve your food. Contact food suppliers and food service equipment sellers to get a more accurate picture of what you can expect to pay based on the amount of the items you think you’ll order each month. Don’t forget to include business expenses specific to food service, such as a state food-handling license and costs to meet health department regulations.

Place

In the marketing mix, the word “place” refers to where you sell. You might offer on-site preparation and service, such as at a school or church hall, private home or school cafeteria. You might make your items at your home or at a food commissary and deliver the finished items. Determine what equipment you’ll need to prepare, transport, heat and serve your food. This can include disposable serving trays and utensils you leave with customers, or chafing dishes, tables, heat lamps and other items you re-use for each function.

Promotion

Once you know your target customer, what services you will offer, how you will provide them and your prices, begin developing your marketing communications. Test a mix of advertising, public relations, promotions and social media options before you finalize your budget. Try cross-promotions with complementary businesses such as wedding planners, photographers, DJs, cake makers, limousine services and houses of worship. If you offer a broad range of services, create sales materials and websites that segment your offerings so different customer types can quickly find what they need. Offer tasting parties to large, repeat buyers of catering services, such as businesses or banquet halls that don’t have their own food staff, or influential people, including food critics. Encourage word-of-mouth marketing by offering customers a discount card they can give as a gift to friends who they know require catering services.

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