How to Start a Banquet Hall Business

Like all original ideas, the banquet hall debuted when need met ingenuity. Not everyone wanted--or could afford--the luxury of a hotel and maximum occupancy limits at restaurants often came up short. Thus the banquet hall was born. You'll find it everywhere and it's easy to see why a good location can launch a healthy business. But, before you start interviewing caterers and pricing Champagne fountains, be a dogged researcher and make sure that you are entering this business with your eyes (not your checkbook) wide open.

Instructions

1. Tour area banquet halls. Look at their packages, set up, amenities and facilities. Pick up brochures to learn how established banquet halls market their services. Your job will be to figure out how to make your new business stand out from the pack. Don't forget to survey each facility's square footage and find out the maximum number of people legally allowed to occupy each hall at any given time.

2. Draft a budget. Estimate your monthly expenses for rent or mortgage, utilities, taxes, insurance, equipment, supplies, provisions, staff, advertising, maintenance and other necessities. Double that figure. It is always better to over-estimate than to find yourself short the day you open your doors.

3. Secure financing. Unless you have enough money to underwrite your hall and keep it up and running for one year, you will need a loan. Shop around to see which sources make the best sense for your situation. Some start-ups may qualify for government aid if owners fall into a special category like minority ownership. Banks, investment brokers, venture capitalists and others offer a variety of terms, conditions and repayment schedules. Good credit and collateral will both go a long way to getting you financed.

4. Hire a contractor to draw up design plans and find laborers, decorators and other contractors. You will need a contractor if you buy an existing building to handle remodeling tasks, too. Listen to recommendations from the decorator working on the project. He will know the best way to mix and match wallpapers, fabrics, lighting, carpet, dance flooring and rest room design. If loading docks are small and cramped, revamp them to allow for efficient deliveries.

5. Apply for licensing. Each state has a distinct set of licensing requirements covering buildings, liquor and food. The process is time-consuming and will require inspections in some cases. You will also need an occupancy license and must post your occupancy certificate, stipulating the maximum number of people allowed under roof at any given time, in a prominent place.

6. Choose between purchasing and renting linens, dishes, glasses and flatware. Most banquet hall owners choose the second option. Here is why: Events are usually color-coordinated. Storing linens in every color of the rainbow is impractical. Inventorying china and crystal set-ups for 500 people maxes out storage and if items break or go out of style, finding replacements could be problematic. Finally, washing and ironing linens can be time- and staff-consuming. Linen services deliver exactly what you need, then return it to their facility for washing and ironing.

7. Purchase furniture from a supplier specializing in hospitality industry goods. You will need an assortment of round and square tables, chairs, buffet tables, skirting, decorative elements like silk or real trees, plants and other items. Take your decorator along on this visit and bring along the notes you made when you toured other facilities.

8. Hire staff. An experienced banquet manager can whip everything into shape for you and make it look easy. Find one with the expertise you lack. Hand over the job of hiring staff to that person since he will be supervising them. If possible, work up a brief employee handbook--nothing fancy--so new hires know exactly what to expect when they report to work and you have a legal leg to stand on if you must dismiss a employee.

9. Prepare event packages. While everyone likes to put their personal touch on the food, beverage, flower and other arrangements, offering per-person packages at set prices kicks the planning into high gear. Again, follow the lead of your competitors and give folks looking to book your banquet hall enough choice to make them happy.

10. Set up co-op arrangements. Get up close and personal with the people who can bring you a steady stream of business. Local churches, synagogues, wedding planners, bridal shops, invitation purveyors, tux rental shops, corporate event planners and more offer you a huge base of clients from which to glean bookings. Ask your lawyer about local or state law concerning paying a referral fee to someone who brings in a booked client.

11. Expect routine inspections and be prepared for them. The health department will monitor your kitchen and rest rooms. Fire inspectors will be by to check emergency response systems. Equipment, like a defibrillator, might be required by your city, so cover all bases. Don't forget to arrange for snow removal services in cold climates and lawn care specialists to keep your hall's exterior looking as beautiful as the interior.

Tips & Warnings

• Always have a maintenance person on call 24/7. Burned out light bulbs in the women's restroom during an event may require your expertise, but if the power goes out, you'll need a pro--fast. Pay particular attention to new hire documentation. Bringing illegal immigrants on board is never the cheap option. If the government catches them, you could face substantive financial penalties for ignoring this law.