Your passion for cooking and events has led you to start your own catering business. While this is, no doubt, an exciting time, there are some things to keep in mind when starting a catering business. From education and training to planning and running your business, this article will cover important details to help you develop a successful catering business.
Specialized Training or Certification for Caterers
The backgrounds of caterers are as diverse as their specialty meals. While you don't need a formal culinary school education to get into the catering industry, many caterers learn the skills necessary while working in a restaurant kitchen, under professional caterers, or in other food service jobs.
Although there is no single track to start a catering business, there are some local health department and state regulations by which you'll need to abide. Each state has a set of health, sanitation, and food codes for food service industries. This typically requires taking a food handling course and getting a permit from your state's health authority. If you plan to provide wine, beer, or alcohol, you will need to get a liquor license in your state. Once you have permits in place, you can get down to planning your catering business.
How to Create a Business Plan for Your Catering Business
Every great business has a plan, and your catering company is no different. By thinking ahead and doing some market research, you can create a business plan designed just for you.
Consider the different service offerings you want to provide. These can range from plated meals to buffet-style meals. Is your area of expertise Northern Italian, gluten-free, or American cuisine? Include the type of food offerings, including any appetizers and desserts, in your business plan. What do potential customers want at their events?
Who is your ideal customer? Keep this in mind when forming your business plan. Do you imagine potential clients hosting large corporate events or are intimate and small events more your thing? By keeping your ideal customer in mind, you can delve deeper into what they want in a catering business. This is called market research.
Market research goes a long way into learning about catering industry trends. The term "marketing" may intimidate a lot of small business owners - and not just in the catering industry. Keeping some questions in mind can be effective for launching your new business. The U.S. Small Business Administration (SBA) recommends answering the following questions to get a good idea about your market niche:
- What is the demand for caterers in your area?
- Is there a sizable market interested in what you have to offer?
- What is the average income of potential customers?
- Where are your ideal customers located?
- How many other catering businesses are in your area?
- What are your competitors charging for their service?
Knowing the answers to these questions can help you create a business plan that works for you and the area you plan to serve. These factors may also assist you in determining the best rate to charge your customers. Depending on your location, the average cost per person might be anywhere between $25 and $145.
Your business plan not only offers an outline of your catering services but also helps you square away the costs associated with your business. This may include expenses like renting commercial kitchen space, linens, and cooking equipment and additional startup costs, such as liability insurance, setting up a phone line, and website hosting and advertising.
Launching Your Catering Business
Now that you have done all of your planning, it's time to launch your catering business. Here, we will talk about how you can legally form your business structure, effectively market your business, and run your day-to-day operations.
Choosing the Right Business Structure for Your Catering Business
Choosing the right legal business structure for your catering company is an important step to forming your business. This can offer protection for you and any employees you may have. Small business owners have a few options, including a sole proprietorship, partnership, and limited liability company (LLC). The SBA defines each business structure and offers a thorough set of benefits and limitations for each to help you choose the best structure for your catering business.
Next, your business needs a name. With some research and a dash of creativity, you can create a business name that reflects the vision of your catering business. Once you have come up with a name that complements your company identity, register it. Be sure to check your state's requirement for registering your business name. Some states prohibit registering a name that is similar to an already existing business entity. Rules and regulations vary from state to state, so you'll want to check with your Secretary of State to learn how to register in your state.
Now that you are registered in your state, learn what your state requires from catering companies. This could be food prep licensure or liability insurance. Check your state's requirements to ensure you comply with all regulations. While learning about catering regulations in your state, you'll need to determine the tax obligations for your catering business. You can find this information through your state's government website.
With all the legal documentation out of the way, you're ready to open a business bank account. Have your federal EIN number handy when opening the new bank account or your Social Security number if you are operating as a sole proprietor (EIN stands for "employer identification number" and is a unique number generated by the federal government to identify your business). Its purpose is similar to that of your Social Security number and allows the Internal Revenue Service (IRS) to track income and taxes owed. With these in hand, visit your local bank to open a bank account exclusively for your catering business. A business bank account is an essential component of your business and can help you keep your personal and catering services and expenses separate.
Creating a Marketing Strategy for Your Catering Business
A successful catering business relies on a marketing strategy. Some simple ways to promote your new business include building a website, setting up your profiles on Google My Business or Yelp, and learning social media marketing basics.
With so many intuitive website builders today, creating your own website is a breeze. For those who like DIY, Wix or GoDaddy may be a good option for you. For everyone else, there are a number of website developers for hire.
Social media channels like Facebook, Instagram, and LinkedIn are an excellent way to create a buzz and market your catering business. Even if you aren't all that into social media platforms, it's worthwhile to engage your community and build awareness. With regular posting about popular menu items, event planning, and client reviews, you can introduce your business to a wider audience.
Essential Day-to-Day Operations for a Catering Business
The day-to-day operations of your catering business are just as important as the time and care you put into your catering service. While paperwork is often one of the last things business owners have time for, it's essential for running your business. Paperwork for a catering business may include quotes for the event, invoicing, managing receipts for catering equipment expenses, and keeping track of customer deposits.
It's likely your customers are shopping around for caterers. In that case, it's a good idea to offer a quote for their event. Professional quotes let them know what they are paying for and how much. Skynova's quote template lets catering businesses create quotes easily.
Keeping track of your business invoices also helps you keep track of your money. With timely invoicing and clear payment instructions, customers can pay for catering services quickly by cash, check, or credit card. Skynova's invoicing template gives you the freedom to do just that. The automated functions of the invoice template allow you to customize the service description, unit price, and quantity with ease.
Accounting tasks, such as managing receipts and customer deposits, can be time-consuming but essential for monitoring your company's financial health. With Skynova's accounting software, your catering business can easily upload receipts and track expenses. The software was made with small businesses in mind.
Manage Your Catering Business With Skynova
Starting your own catering business is an exciting opportunity and journey. By understanding the importance of creating a business plan, it prepares you to legally form, effectively market, and run the day-to-day operations of your catering business. In no time, you can be on your way to a rewarding career, doing what you love.
Skynova helps small businesses like yours get off the ground running. With plain and easy templates, you can minimize the headache of paperwork and keep track of the financial health of your catering company. Skynova's accounting software and business templates are designed to simplify the financial tasks of your catering business. To get started, create a free quote for potential customers or begin your free trial of the accounting software to see how Skynova can help you streamline the financial side of your business.