Starting a catering business is one of the best ways to create your own hospitality venture. If you’re going to do this properly, you’ll need to create a solid catering business plan.
Your catering business plan needs to include all the details about your business. This is necessary for getting your business idea off the ground, and ensuring your business operates smoothly and profitably.
To help you put this together, here are some of the most important steps and elements your catering business plan should include.
Catering Business Plan: How to Build a Great Plan
Choose a Catering Service Type
The first essential step in creating a catering business plan is establishing what type of catering services you will over. In the broadest sense, this can be broken down into on-site or off-site catering services.
On-site catering businesses prepare food at the location and travel with their inventory and equipment. This includes catering for things like weddings, venues, or special events. Off-site catering is when you bring the prepared food to the venue. This is often done by corporate catering companies (like business lunch caterers), or caterers that do private parties.
Refine Your Catering Offering
Once you know what pillar of catering you will focus on, the next step is refining this more specifically.
Will your catering business focus on casual or high-end events? What type of volume can your business handle? What specialties will you focus on?
For example, you could choose to focus on weddings, private parties, canape functions, grazing boards, or more. The more specific you can be about the type of food you will make and the types of events you will cater, the easier it will be to reach the right clients.
Understand the Laws and Regulations
When creating your catering business plan, you need to have a clear idea of any laws or regulations that exist around catering businesses.
Make sure your city, county, or state allows for catering businesses to be run from the location you plan. Ensure your kitchen meets all of the correct health and safety guidelines, and that you apply for any relevant licenses.
The last thing you want is to plan a new catering business, only to realize that you can’t operate in your location.
Research the Market
One of the most important steps in developing a solid catering business plan is performing in-depth market research.
You need to have a strong understanding of the market you plan to operate in if your business is going to be a success. This involves understanding who your target audience is and who your competitors are.
The main reason for performing in-depth market research is to understand how effectively your catering business can enter the market. A successful catering business needs to develop a unique selling proposition (USP), which is what sets the business apart from the competition. This is what will help you attract customers and enhance your marketing efforts.
So, understand what catering business operations exist in your space, understand the demand for your catering services, and establish how your catering business plan will find a space in the market to target.
Establish Your Finances
Starting a catering company can require quite a significant financial investment. Of course, this depends on the type of catering services you offer and the scale at which you plan to operate.
When creating your catering business plan, you’ll need to have a clear understanding of your financial requirements. This involves establishing realistic financial projections for the business.
Understand how much capital the catering business will require to get off the ground. This should include all of your equipment and inventory costs, staffing costs, marketing costs, and any other costs related to getting the business set up.
Then try to establish accurate financial projections. Based on the demand in your market, establish how much revenue you predict to bring in over the first couple of years of operation. Compare this to your operating expenses and overhead costs to establish how profitable you expect the business to be.
Getting this right is essential for understanding how your catering business will manage cash flow and how viable the business plan is.
Determine Your Business Structure
Another crucial part of any catering business plan is figuring out what type of business structure your catering company will take. You could operate as a sole trader, or register as a limited liability company.
Registering the company separates your business entity from yourself as an individual, which adds personal protection in case anything goes wrong with the business. It’s also important to understand the tax and operating implications of different business structures. Choose a structure that makes the most sense for your catering company and operations.
Craft Your Menu
This is one of the most fun and exciting parts of developing your catering business plan.
Once all of the paperwork and legal stuff is out of the way, it’s time to work on what matters most - your food.
This is your product, so it’s essential to have well-planned menus in place. Of course, your menu will likely change with each event based on the function and the client. However, it’s always a good idea to have a few standard menus established that you can show to clients.
Som,e caterers create custom menus for each event while others only work from a pre-set menu they have already established. Some caterers take a combined approach.
When creating your menu, you’ll need to understand the costs and profits involved with each menu item. This is why having the right menu design software in place is so important. Inventory management and recipe costing software can completely transform the way you run your catering business.
Ensure your menu aligns with what kitchen space and catering equipment you have available. Your menu will also need to make sense for the style of catering you plan to do.
Determine Your Equipment Needs
Once your menu is established, you can establish exactly what catering equipment you will need to make it happen.
This is an important consideration, as your catering equipment needs can vastly impact the startup capital required for your business. Some caterers can operate with basic household kitchen equipment, while either require large-scale industrial kitchens.
Once you’ve figured out what type of equipment you will need, you also need to establish where you will store this all. You may also need to invest in a van or del;ivery vehicle for your catering business.
Establish Your Catering Team
When writing a catering business plan, you’ll need to provide an overview of the people behind the business.
Establish what team members your catering operation will require. This should include an overview of the business’s management team and different roles.
You could start a small-scale catering business as a solopreneur. However, it’s always a good idea to have a plan in place for when your business grows. Eventually, you’ll need some help somewhere down the line.
So, be prepared by planning for the different team members and roles your catering business will require.
Build Relationships With Vendors
As with any kind of food business, your suppliers will play a major role in the quality of your product.
Start to develop relationships with wholesalers and suppliers when planning your catering business. This will help you determine what kind of ingredients are available. It will also help you establish an exact pricing strategy for your menu.
Set up business meetings with various suppliers and ask them for their price lists. Compare different vendors to understand which ones make the most sense for your catering business.
Establish a Marketing Strategy
How will you attract customers to your catering business? Even if you serve the most delicious food, you’ll still need to reach potential customers. Having a great marketing plan is key to achieving this.
Make sure you know who your target market is and why they would choose your catering business over the competition. Come up with a strategic plan to reach these potential customers. This includes knowing what marketing channels you will be active on, what marketing software you will need, and how you will make your catering business visible from day one.
Follow a Catering Business Plan Template
These are some of the most essential steps in creating a catering business plan. However, it’s always a good idea to draft this out professionally with a business plan template.
The template should include sections like an executive summary, a company overview, financial information, and more. Creating this is necessary if you’re going to pitch the business idea to potential investors. It will also give you a more organized framework to follow when putting your catering business together.
Conclusion
Cover all of these areas, and your catering business plan should include everything you need to effectively develop your business. The more detailed this business plan is, the better, as it will help you overcome challenges and understand every requirement needed for getting your business idea launched.
So, if you want your catering business to be as successful as possible, it all starts with a strong business plan.
Investing in the right catering event management software is also a key consideration. This will help you manage every business process a lot more easily. Try Perfect Venue for free to see how the platform can help you manage top-tier events.
