For many people, catering seems to be very attractive and easy-to-manage business. They perceive it as a profitable business with very little hassle involved. If you are planning to set up your own catering business, you have to change that general perception you might have in your mind.
Like all the other businesses of the world, this business also requires a proper business plan and a proper feasibility in black and white. Without a detailed plan you are not going to find any customers for your business and could end up losing all of your precious investment in it.
As far as the profitability is concerned, yes, it is profitable but only for those who have done it with prior planning and organization. There are many individuals who have lost handsome amounts of money in the desire to be a successful caterer. So, better ask yourself a few questions now and plan according to the situation you will have to handle in the future. Here is the list of factors you should consider before making any investment:
Select a Strategy
The first question you should ask yourself is about the strategy you should choose. The two main categories of catering business are niche and general. Catering for selected groups or events is niche and provision of services for every type of event is a general strategy. Different types of events or celebrations include wedding, birthdays, engagements, anniversaries, parties, business conferences, etc. You may wish to serve households or business people, or you can divide your segment on the number of people you can manage to serve.
My advice for you is that if you are working in a large city go for niche marketing, because existing large competitors will not allow you to grab their share easily. A niche will allow you to specialize in a particular segment and earn profits by going for small but high paying jobs. In this way you will be able to compete with a long list of competitors effectively. On the other hand, if you have set your business up in a small town or district, you can be successful with a general strategy, since people won’t have many options to choose from and your good reputation will travel quickly by word of mouth.
Create the Best Menu for Customers
Perhaps the biggest and most crucial factor that needs your emphasis and attention, is the selection of the menu. In order to survive in this ever-growing competitive age, you need to have multiple menus with a variety of dishes in each. Include all those dishes that you think you or your cook is an expert on and can guarantee that every meal prepared will really stick out and help to build that status that you’re looking for in order to get more business. Offer your services in packages, so that a client coming in has three to four menus to choose from. After all, this is something you are supposed to be good at and your customer’s satisfaction is solely dependent upon the taste of the food you are going to serve.
Managing Cash Flow and Marketing
How you are going to finance your business is another decision you should make soon. The initial and later requirement of cash in hand is the biggest problem you will face while catering for your first customer. Planning how you are going to attract the chain of customers will make you think about the inevitable marketing expenditure. To develop an excellent business reputation and to grab a handsome market share you need to make some investments in advertising and marketing for your services.
Hire Your Manger
This is something people generally understand after some time. They are reluctant to hire someone as their manager or assistant, but when things get out of control, they eventually have to hire someone on an emergency basis. This situation leads to the hiring of not-so talented persons in the end. In order to avoid this chaotic situation, you should hire a trustworthy and qualified manager or assistant well before time.
Managing Human Resources
Collecting a bunch of qualified and experienced staff is another important task you need to accomplish before launching yourself in the market. No matter how experienced you are by yourself, you need to have individuals who can coordinate all the little details of the event being catered. Some of your staff should be able to cook as well as guide you on food storage and movement, whereas, some should possess specialized skills in particular areas.
Gain Some Experience
You cannot manage the whole business all alone. There are so many people and materials to manage in the catering business. Logistics, for example, is ignored most of the time as you need to have someone to monitor your cooking, packaging, marketing, finance etc.
In short, by focusing on all the above factors before venturing into a catering business, you would be able to increase the chances of your success substantially.
