Are you interested in starting a catering service business from home? Do you need a sample catering business plan template? Do you want to learn what it takes to open a catering service business with little or no money?
Are you passionate about cooking and you want to learn how to make money with your cooking or baking skills? Do you love making recipes? Then below is an in-depth guide on how to start a catering business from home.
Catering is all about providing cooking or food services at strategic places such as hotels, public houses, events, weddings and parties, or other locations; based on contract. It may also involve providing food and beverage for events. But it is important you bear in mind that catering is quite different from event planning and management.
Event planning is a very broad niche while catering is just an aspect of event planning. In fact, catering is one of the businesses i highly recommend for people who have the passion for cooking and preparing delicacies. The demand for caterers is very high especially for caterers who know their onions and provide excellent customer service delivery.
Whether you intend starting a small daily catering business or you aim to offer huge extravaganzas for a large number of people once a year, then you probably want to consider pursuing your dreams in the food industry because the potential profit margin in the catering business is extremely high. Some caterers often manage to walk away with 66% of pre-tax profits. This figure may seem hard to believe but when you consider the various ways caterers can keep their overhead low to practically nothing, this figure becomes more credible.
Now if actually you have made up your mind to go into the business of providing catering services to clients, then below is everything you need to know about starting a catering business from home.
8 Reasons Why You Should Start Your Own Catering Business
- Catering is a service business that provides you a chance to showcase your talent and creativity in the aspect of cooking and service delivery
- It is not capital intensive. In fact, you can start a catering business from home with no money. Yes, you don’t even need an office; you can even start this business from home using your client’s advance payment and rent all the equipment you need
- You can run your catering business part time, while still keeping your job or business
- There is no entry barrier to opening a catering business. In fact, even a student can do this business without any hitch
- As a caterer, there are a lot of niches to target and you can never be short of clients. You can choose to provide services to specific organizations such as restaurants, fast foods, etc or you can work independently and offer your services at events, weddings, parties, business meetings, private clubs, etc
- As a caterer, you are either self employed or a business owner and you decide your income
- As a catering business owner, you will add to the development of your community and country at large, with respect to job creation. Event catering is definitely not something you can carry out alone; you will need to employ helping hands.
- Catering is one of those businesses that don’t need much marketing or advertising. In fact, you rarely see caterers advertise their services. This is because they always have a steady flow of clients through referrals and word of mouth marketing done by satisfied customers.
How to Start a Catering Business from Home – Sample Business Plan Template
This article is not targeted at any region or country. The catering business is a profitable business that can be taken advantage of; regardless of your country or locality. With the information I will be providing below, you can start your own catering business in USA, Canada, UK, Australia, India, Nigeria and even Ghana. The business metrics of the catering business is universal; the only difference in this business is the currency of the location you are operating in, the economy of the region, the perception and culture of the particular region you are targeting.
Make the decision to start your own catering service business
To get started in the catering business, you need to first decide if this business is for you. As expected of all business, offering catering services is a business that requires passion; you need to love the job in other to reap the profits.
1. Acquire the necessary skills and certification
Before starting a catering business, it is important you know not just the intricacies of running a catering business but also the technical details of catering. Mind you that running a profitable catering business entails being an exceptional cook / chef, with a strict hygienic standard and exceptional delivery / customer service. A good way to start building up your knowledge is to attend to a catering school. Another advantage of attending a catering school is that you will be issued a certificate, which will add a feather to your cap; thus separating you from those caterers without certification.
After getting the necessary qualifications and certification, you need to develop your entrepreneurial skills if you really want to succeed as a caterer. Some business skills you cannot do without in this industry include:
- Sales skill
- Persuasion and negotiation skill
- Accounting skill
- Marketing skill
- People management skill
- Self confidence
- Good sense of humor and neatness, etc.
2. Decide on what type of catering services you will offer
This is a very important step in the process of becoming a professional caterer. Will you be an indoor or outdoor caterer? Will you offer your services to specific companies, hotels, restaurants, fast foods, etc? Or you would rather be your own boss? Will you strictly focus on providing catering services or you will provide full scale event planning services? You must think this through thoroughly because whatever decision you arrive at will break or make your business.
Types of Catering Business Opportunities
- Special events
- Social catering
- Corporate catering
- Community affairs
- Kosher catering
- Wine and bar services
- Full event management services
If you are interested in catering for weddings, you may decide to contact florists, department store heads, musicians, and people in charge of places that book weddings; and form strategic alliance with them. If corporate entertainment is something that catches your fancy, then you may decide to contact the corporations in your area (the chambers of commerce should be able to supply you with area names).
3. Decide the type of food you will cook
This is another important factor you must decide on before even writing a business plan. Also, the decision you arrive at here will determine the type or course you will take at the catering school and the type of clients you will serve. Will you specialize on African dishes, local dishes, intercontinental dishes or continental dishes. That’s left for you to decide.
4. Create a Menu
A food menu is a very important component of your catering career. In fact, it is one of the first things a client would like to see before engaging you in a negotiation. So try having many items to suit different tastes and demand, even if you specialize in one type of meal. Also consider offering vegetarian and vegan meals for clients who don’t eat meat or other animal products. Keep your menu to a manageable size, with foods you are comfortable cooking and can be prepared with ingredients you know you can source locally.
5. Test your dishes
Once you are done creating your menu, organize small scale parties with family and friends and have them to taste your dishes. Ask them for honest feedback concerning their experience on both the food and service. Keep on adjusting your dishes until you are told that they are delicious and crowd friendly. Once you get a positive feedback, then you can proceed to prepare a business plan.
To successfully launch a catering company, you need a business plan that will serve as a blueprint for the business and its team. If you start a catering business without a business plan, then you might end up just like every other self employed caterer. Having a business plan clearly distinguishes you from the average Mom & Pop caterers, as it is helps you forge a mission, vision, goals and objectives; and also help keep you on track. Even if you are starting a catering business from home, write a business plan because it can become an important tool tomorrow as you try to expand and source for funding.
If it is going to be your full time business, you will need a more permanent storage and cooking equipments. Look for an adequate place so that you will be able to set up your cooking and catering equipments. Check your local zoning office to make sure you can install proper equipment like ventilation hoods and grease traps. However, if you are starting on a small scale from home, then you don’t need to rent a space as you will be operating from home.
8. Get your business permits and operating license
As a new catering service business owner, certification is not enough to run a catering business; you will need to find out what license is required and acquire it immediately. Before you apply for a catering business license, you must meet the criteria that will qualify your permit.
You must be the owner of the food business and the business must already be registered as a legal entity. The license for this business is overseen by the Food and Health Authority. It is required you pay a certain amount of fee before your license will be processed. The Food and Health Authority will access your catering facilities all the equipments must be in good shape, else they will not approve your license.
9. Set up your kitchen
The equipment you will use in your catering business is different from the one you will use at your home kitchen. This is because catering entails cooking on a large scale so it requires industrial equipments that is quite expensive. If you plan to bake also, you will need baking equipment.
10. Purchase the necessary catering equipment
The equipment you will use depend on the type of service you will offer and the size of your catering outfit but at minimum, you will need serving platters and serving utensils. You must also make sure you have the proper equipment to keep the food hot or cold. Buy linens, napkins, table decorations and centerpieces. Some catering businesses also offer tent canopies for outdoor events. You may also need to buy a van and other equipment for transporting food. You should also make sure the van has enough space for storage of foods, linens, tableware and other things.
However, if you are starting from home, you can rent or lease the equipment you need; though this may decrease your profit margin but it is a good way to go especially when you are trying to keep cost down.
List of Equipment / Tools You Need to Start a Catering Business
- Chopping boards
- Food storage containers
- Pans spoons
- Cooling van
- Micro waves
- Table top
- rolling carts
- Garbage bags for dirty linen
- Extra bus tubs for dirty dishes
- Tin foil
11. Employ staff
Catering is a venture you can’t handle alone as there is a lot of tedious tasks to be done; ranging from cooking, serving, cleaning, etc. So you will definitely need helping hands. However, it is important that you train your employees so that they can provide the type of service you want and preserve your brand image. You should also hire an accountant to keep track of your expenses, invoices and income; or better still, you can do your own bookkeeping if you are good at it.
A Sample Catering Business Plan Template
- Describe Your Company
Describe the functions of your company and indicate if it is a sole proprietorship business or an incorporated business. You need to state too in your business plan what catering services you are offering to people. Try as much as possible and be specific. You may clearly state that you are preparing and delivering foods for wedding celebrations or in all kinds of events.
- Research Information about Your Business
Try to find information about your competitors. You need to know how many businesses are offering catering services in your area or how many are catering exclusively for weddings. You must assess the needs of your business environment and how you can help people address those needs. It is important that you know what people want or what is in demand in the industry you are in. You should also analyze your personal and business strengths, weaknesses, oppositions and threats; then list all of it in your business plan.
- State How You Want to Use Your Funds or Earnings
Carefully think just how much capital you need, how you intend to raise funds and how you will use your funds or earnings. Will you buy new equipments that you think are necessary for your business? How much you are willing to invest to improve your catering services? It is important to organize the usage of funds. List down all the things you may need to render a good service. By stating how you want to use the funds you have, you can have your business plan implemented smoothly.
- List Down All the People Involved in Your Business
List down all your catering business staffs with their full names as well as experience assessed in years. Ensure that your staffs have sufficient catering experience.
- State How You Are Planning to Cope with Possible Challenges and Issues
Summarize in your catering business plan by explaining how you intend to cope with the challenges and problems that could possibly arise during your operation. Make sure to list some examples or scenarios and what you can do about it. These issues will include customer complaints, marketing, advertising and promotion, etc.
Start-up Investment for a Catering Business
- Low - $1,000 (working from your own kitchen)
- High - $75,000 (outfitting a professional kitchen)
A projection of Annual Revenue and Profit for a Catering Business
- Revenue: $200,000 – $2 million
- Profit (Pre-tax) – $50,000 – $1 million
How to Market a Catering Business from Home
When it comes to running a catering service business from home, the most important marketing tool you will need to cultivate is word of mouth. Most brides, corporations, etc are not going to risk embarrassment by trying an unknown or untested caterer. If you are fortunate enough to have a solid reputation when entering the catering business, you will have a good head start. If you are starting entirely from scratch, you need to be really creative in order to get your business going. To successfully market your services, you need to:
- Define your niche
- Know how much to charge clients
- Learn how to write agreements, contracts and proposals
- Learn how to get referrals and repeat business
- Learn how to talk persuasively to clients
- You must have a marketing plan
- You must know how to advertise your services cost effectively
- Maintain a client’s portfolio
- You must know how to track your success and scale-up
A good way to go about marketing your catering business is to invest some capital in throwing a party of your own and invite the decision-makers from various corporations in your area, or the aforementioned florists, department store heads, etc; and give out your business cards to them. These people are not going to risk their perceived reputation by recommending an unknown entity like you; so give them something to remember and to endorse.
Also, especially in the beginning phase of business, add that little extra touch to the events you cater for. DON’T CUT CORNERS! Remember, your compensation will not always come in the form of naira, dollars and cents. Your reputation is equally as valuable, especially in the long run. Remember; that little “extra touch” is often more effective and sometimes cheaper than paid advertising.
Top 10+ Creative Marketing ideas for your Catering Business
- Start small by offering your services to family and close friends, then ask them to refer you to their friends
- Creating a website detailing your services and promote it
- Partner with event planners, most of them get jobs quite often and only few have knowledge about catering
- Advertise in wedding and event journals
- Designing menus, flyers and brochures and hand it out
- Setup a blog on your website and keep in touch with your clients
- Advertise your services on mass media like TV, Radio, newspapers, etc
- Find your own niche to serve
- Offer discounts and reward loyal customers
- Pimp your catering truck and take it everywhere you go
- Put your staff on uniform and try branding yourself as much as possible
12 Challenges of Starting a Catering Business from Home
- Catering is a very stressful business. This is because you have to move from place to place in the cause of cooking and serving.
- It is management intensive
- Getting hardworking and competent employees is quite a challenge; as you wouldn’t want to employ people that will tarnish your reputation. Also, retaining good staff is another challenge you might encounter
- Finding good clients
- Constant change in the market price of food stuffs
- Safety of food. There is a challenge in keeping food safe and maintaining it in the appropriate temperature. The key to keeping food safe is to be constantly checking or monitoring it and properly supervising and training your staff. Safety of food begins when you have the required ingredients in your hands. The ingredients must be constantly refrigerated or frozen. This process has to continue when you defrost foods and begin to cook refrigerated ingredients.
- Struggling to control the uncontrollable. In the business of catering, you have to deal with many factors that are completely beyond your control. As a business operator, you are required to be flexible and conquer the urge to handle all detail within you. Catering is not a profession where you can simply be a control freak and survive in the business. There are a number of factors which you will have to account for in all jobs, and no two jobs is expected to have the same combination of unknowns.
- Another challenge you will face is client’s indecisiveness and ever changing demand.
- Event Logistics. You must anticipate the flow of guests and avoid human traffic jams but no matter how hard you try, there will still be some lapses. Experience have it that the bar and the food are in different areas of a room, or in different rooms. A well experienced host may want the bar and the food close to each other, with a thought that it is convenient for guests but not knowing that it is a disaster that is waiting to explode. Lines for each must move efficiently, and never meld together. Also, estimating the quantity of food needed for a specific job or occasion is a very big challenge. The amount of food that people will consume changes with the time of the day and even the temperature of that event space. If the event is outdoors on a very hot day, for instance, people will tend to consume small and drink more. Light, cool foods such as cold soups and salads will be eaten before hot ones.
- Client’s complaint. This is another challenge in a catering business, it may not be as a result of something lacking in your catering house, but might often be as a result of something totally unconnected. It may be a difficult access to your venue, it may be that the dishwasher is faulty and they are unable to use it for the rest of the week. Whatever the challenges/problem is, you need to manage the situation with diplomacy and care.
- Loss and damage of utensils and equipment that may happen as you discharge your services.
- Building your brand reputation and winning client’s confidence enough to earn you a referral is quite a challenge because humans are insatiable. To overcome this challenge, you must continually ask for feedback from clients you have served.
How to Grow your Catering Business from Home
In the catering business, you have an unlimited growth potential. You can buy your own facilities and accoutrements, hire full-time chefs and servers, buy a catering business software, find new catering business supplies, use temperature-controlled holding cabinets and vans or you can rent or lease just about anything you need. But you must start from somewhere first.
You may decide you want to cut off the middle-man’s profits by buying the specific items you find yourself renting regularly such as china, flatware, tents. You also need to boost your brand awareness and reputation by getting a business card designed with your company details and signature. If eventually you grow big and acquire a vehicle, you can design your logo on the body of your delivery van. This is an effective marketing strategy because people will see get to see your marketing message as the van moves around the city and most importantly, when it is at the site of an occasion you are catering for.
More Tips for Starting a Successful Mobile Catering Business from home
While 70% of the restaurant business is food oriented with the rest going for service, organization, etc; this statistics drops to 30% in the catering business. The bulk of a catering business include delivery, transporting the food, lining up rental equipment, juggling personnel. With respect to the catering business, organization is what counts.
You also need to be a salesperson with a charming personality to push your catering business through. Since you may be dealing with corporate executives, party planners and nervous brides; you will need to convince your prospective clients that you are not only capable of providing a memorable feast but you will also deliver on time, and discharge your services attractively, quickly and unobtrusively.
There are a number of profitable engagements that naturally spring from the catering business. You can act as a coordinator for flowers, party locations or themes. You can also be caterer and party planner, caterer and florists, caterer and rental agent. Don’t just limit your options. Be creative! Remember, if individuals wanted to stick to a set menu; they could choose to go to a restaurant, so be flexible. Make your menu suggestions, just suggestions (a starting point, if you will). Let the client be your guide but don’t overlook opportunities to turn a modest “do” into a major profit-making event. Don’t be reluctant when you see an opportunity to “bump-up the bottom line of an event. You may be able to turn a barbecue into a Hawaiian luau complete with roast pig.
In conclusion, strive to ensure that every event is party to remember. Go that extra inch, sometimes it can be a mile and result in mile-high profits. Remember that in the catering industry, there are no restrictions except those you place there yourself.
For more in-depth information on starting a profitable catering business from home, preparing a catering business plan, writing client agreements, contracts and proposals, information about licenses, liability insurance, permits, mobile catering business name ideas, the legal structure of your business, taxes, insurance and much more; please seek advice from a reputable business consultant.