Are you passionate about cooking? Do you love making recipes? Do you want to learn how to start a catering business from home? Do you want to learn how to make money with your cooking or baking skills? Then read on as I share with you in-depth details on how to start a catering business from home with little or no money and write a catering business plan.
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 figure
How to Start a Catering Business from Home with Little Money
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, 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.
Acquire the Necessary Qualifications and Skills
In as much as you are passionate about being your own boss in the food industry, catering is really not a service you can just wake up and engage in. Even if you know how to cook and make recipes perfectly, you still need to be trained on the systematic intricacies of offering catering services. It is also advisable you attend a catering school or take a catering course online, as this will earn you the qualification you need and boost your reputation before your clients.
After getting the necessary qualifications, 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.
Your Catering Business Plan Template
You can begin your catering service business out of your own home, using a spare bedroom as your office but you will definitely need a license and liability insurance cover such as Product liability insurance, public liability insurance and workers compensation insurance.
When it comes to setting up a catering business, you can start up from your own kitchen (but you need to be careful about the Local Health Department regulations and city ordinances) or better still, you can rent a kitchen in a restaurant, school or church on an as-needed basis. In the catering business, you definitely don’t need to hire full-time waiters or bartenders etc. There are quite a lot of individuals out there willing to work part time, or when you need them.
Catering Business Requirements
There are few items that are very crucial to running a successful catering services business from home that you can’t afford to keep renting everyday. These include china wares, flatware, glasses, tents, pots, etc. If you are really serious about carving a niche or building a brand in the catering industry; then you certainly need to purchase these items that are used regularly because they may become long term assets to your catering service business.
The only immediate cash-outlay you’ll encounter is what’s needed to market your services. You need to think carefully about your target market and choose your advertising media to reach that targeted population.
- Who are your target clients?
- Will you target individuals or corporate entities?
- Will you offer On-premises catering or Off-premises catering?
These are questions you need to answer.
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).
How to Start a Catering Business from Home with Little Money
The Pros and Cons of starting a catering business from home
Before I go into the intricacies of starting a catering service business from home; I will advice that you conduct your own feasibility study and write a business plan. It’s not advisable to start a business blindly; you will only end up losing your hard earned cash.
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.
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.
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.
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
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.