Running a catering business can be very rewarding financially and can also be a lot of fun. Whether you cater events, weddings, corporate lunches and conferences on a full-time or a part-time basis, the opportunities can be significant.

However, catering is more than just knowing how to cook good tasting food. To succeed in this business you have to know your market and not only that. You have to know how to serve your market and to deliver your food (as well as an unforgettable event) at any place and at any time.

Each catered event is a new experience and a challenge as you are always working with a new group of people. While the financial rewards can be great, you should also never forget to make things fun with your clients. However, with fun also comes demanding work and for this you will need energy, stamina and the ability to work under pressure.

So what are the different types of catering you can get into? Let’s take a closer look.

Mobile catering is common at outdoor events (such as exhibitions, boats, concerts etc.), workplaces, and downtown business areas.

Event catering is a bit different. It ranges from lunch drop-offs to a full-service catering offering.

Corporate catering services are a bit different again. They focus on small and big businesses corporate companies and parties. They can also include corporate conferences, corporate fundraising events, staff functions and corporate training days.

Finally, there is Wedding Catering. A full service wedding catering company is expected to make that special day one to remember and everything must run without a hitch.

A catering company is expected to know how to prepare food and to make it attractive. As mentioned above, each catered event can be a different challenge as you are constantly dealing with different types of people, so you must be prepared for anything.

Things to take into account

Many venues will “take a cut” of the catering bill. Therefore, catering will sometimes cost a lot more at one venue compared to another. You must take this into account when calculating your cost of doing business.

What’s YOUR market?

The development of a business plan is crucial to any business, and catering is no different. A proper business plan will help you in planning a successful operation. Prior to starting a catering business, you need to determine your type of business and your market. Will you be just doing weddings and wedding receptions or will you focus exclusively on the corporate catering market.

You must analyze your market. Who are your clients? What are their needs? Who is your competition? How do you plan to effectively compete with existing catering businesses?

If you have a love of food and people or think of yourself as someone that knows how to organize a great party or event then starting an event catering business could be a great small business opportunity for you.

Here are 10 steps to follow to get your event catering business started successfully.

1) Research

Find out as much as you can about the catering industry and how to run a successful catering business. Try to also learn about small business management and marketing. Taking some classes on business or culinary related topics is one great way to prepare.

Research the industry in your town or city. Try to find out more about what the successful operators are doing, the size of the market and what kinds of events you should be targeting. Talk to people who have hired caterers before to try and better understand your future customers.

2) Experience and Qualifications

While most states and countries don’t require you to have any experience or qualifications to enter the catering business, if you have had experience working in the food, beverage and hospitality industries (or even with another catering firm) you will have an immediate advantage.

3) Look into Health Regulations

One of the most important things to consider when going into the business of food preparation and service is the local health regulations that you will be subject to. Aim to know all about the permits that you will need and the cost of complying with health regulations before you even dream about starting your business.

4) Think about where will you prepare the Food

Having access to a suitable kitchen space is essential if you are serious about your business. Is your home kitchen really sufficient or will you need to rent time in a commercial kitchen or work out an agreement with the restaurant owner?

5) Insurance

Before you set up your company you should seriously look into the insurance that you will require in order to protect your company’s assets and your company’s liability in the case that things go wrong and result in personal or property damage.

6) Menus

Start putting together a variety of menus for different kinds of events. Have a look at what other caterers are doing to get ideas about what is popular.

7) Practice makes Perfect

Why not have a trial run before you start your event catering business to get an idea of what it takes to cater an event for a large number of people. This is easy to do if you throw a dinner party for a large number of friends or colleagues. Pretend that it is a real event and when the party has finished, ask your guests what they thought of your service and you food.

Branding

Start thinking about an appropriate name for your new venture and think about how you want customers to perceive your business. How would you differentiate your company from the competition? What about your company values?

9) Financing your Business

Try to get a clearer idea of the start-up costs that you will be facing and decide how you will finance your business. Will you be able to fund the whole project by yourself or a will you need another form of financing?

10) Your Business Plan

Once you have given these other nine factors some thought, you can start to compile a business plan outlining set up costs, marketing and management methods and goals and targets among other points. Try to cautiously forecast your expected income and expenditure for the first two years of your business and then you will be able to determine how profitable your new business is likely to be and when you can reach breakeven point.

If you follow these 10 steps before going ahead and starting your event catering business you will be giving yourself the best possible chance of finding success.

Depending on what kind of catering business you are planning on setting up, you will need some kind of funding to invest into the business to meet startup costs and the first few months of operating costs before the business earns revenue. In this article we examine some of the funding and financing options for those wanting to start a catering business.

It is advisable to avoid going into debt right away if you can as you may need access to credit some time in the first year of your businesses life if it doesn’t grow as fast as you had originally anticipated.

If you are unable to fund your catering startup independently and you cannot convince family or friends to give you a loan then you may have to look more broadly at your social and business connections and try to find an investor. Venture capital firms specialize in connecting investors with business start-ups but they may not be interested unless you are proposing a large project that is more unique. An investor will give you access to capital but don’t forget that they will also pick up an ownership stake in your business and they may also want some influence in business decisions.

A loan from a commercial bank is another option. Banks have a variety of business loans with interest rates and repayment schedules that vary according to the economic climate. Your chances of getting a bank loan will improve if you can show a good personal financial history, if your business plan is solid, if you are willing to partially fund startup costs yourself and if you have some assets that you can use as collateral on the loan.

In the US their are various government agencies that offer small business loans and even grants that don’t have to be repaid at all. The catch here though is that there are thousands of entrepreneurs lining up for these opportunities so you have to have a business plan that really stands out from the other applicants. If you are able to prove that your business is benefiting the local community in some way than your case will be more convincing.

Some small businessmen and businesswomen who have been unable to get any form of financing have resorted to getting cash advances on a variety of credit cards to get a pool of cash together for startup costs. This method is great as a last resort but can be dangerous due to the high interest rates involved. If you are confident that you will be able to start making repayments within a few months it is worth considering this idea.

No matter how you go about funding and financing your catering startup you should be sure that every dollar is going to it’s best possible use and that nothing is wasted. Find the right balance of getting what you need to start up and look professional while also keeping a tight budget and you will be well on your way to a successful catering company launch.