Starting your own catering business will always give you a rush. But there are steps that you need to follow to complete the setup process.
Many entrepreneurs are interested in setting up a catering business. You need to know that there are plenty of options available if you are looking to start a catering business. You certainly can try this out if you love throwing parties, have a knack for planning events, or is an excellent cook.
But the first thing you need to realize about the catering business is that it entails a lot more than just putting food on plates. You need to have a lot of consistent planning to get the business rolling, plan for any unexpected events, and you have to be able to think your way through situations that may become very stressful. So read on to find out how you can start a business following a few simple steps.
Decide On What Type Of Catering You Want
The first step is to figure out what type of catering you want to offer. You can decide on doing small finger foods with reception drinks or do a bigger buffet style catering. You might also go for the sit-down style catering that you see at weddings and banquets. Decide on which will be easier for you to deliver and what goes well with your talent and style, then go for it.
Choose The Entity Type And Name Of Business
After you have decided on what type of catering business you want to launch, you need to choose the name for the business and decide on the entity for it. Be sure to check if the name you are choosing is available in the state you are aiming to start your business. While choosing the entity, you will have some options to choose from that depend on a few factors such as whether you are starting the business on your own or with partners.
The business will be solely unincorporated and owned by you if you choose to operate as a sole proprietor. The registration will be different if you want to take on a partner or you don’t want to take personal liability for everything in the company. In that case, you can register the company as a limited liability company, a limited liability partnership, a general partnership, or a limited partnership.
Write A Plan For Your Business
Writing a plan is important as it gives you guidance on how to run your business. You can write the plan yourself or use a template, both will involve a lot of research. The plan should include the company overview, the market analysis, details of the services and products you intend to offer, and the blueprint for marketing and finance.
In your plan, list down the suppliers and vendors that you are planning on using. Include sourcing details for all the supplies you will require such as sticker paper, utensils, linens, china, the food, and even the tables and chairs. Research the market to identify the needs and requirements of potential customers in the area.
Get The Business Registered
Your business needs to be registered under the name selected for it in the state where you want to operate.. The state may have specific rules and might require additional registrations for operating a catering business. Your kitchen and serving areas might be inspected by the Health Department. You should be applying for an Employee Identification Number (EIN) as well. This may serve as the business tax ID number and aid you in paying for employees or applying for credit cards.
Get All The Required Clearances And Licenses
You will need to get a license to handle food and a business license from the state to start up a catering business. Just having a residential kitchen probably will not be enough, so look into a commercial kitchen that already has approval. This is important as you will need to pass a state or county health inspection to obtain the license.
You also need to get a license to work out of certain venues. Your worker’s insurance and compensation are some other requirements you need to consider. Your local Chamber Or Commerce, Small Business Administration, or the Small Business Development Center can help you if you are confused as to what other formalities need to be fulfilled.
Fix Your Pricing
This is a very important part of setting up the business. The price you determine for the products and services will depend on what kind of catering you are doing and the location of your business. So research ahead for the price demographics in your area and the demand circle compared to the spending capacity of the potential customers. Fix the price keeping the quality of your product in mind and comparing it to the prices of similar offerings by different companies around the area.
Hire And Train Your Staff
You need a team of well trained and efficient staff to help run your catering business. For hiring, you can use word-of-mouth or take the services of job- seeking sites. You need to keep in mind that your requirements will change from what it was when you started the business to what it will be once established. You also need to invest in training them and getting customized uniforms for them. Costs may include aprons with customized logos.
Secure The Funding
One of the most crucial things that will enable you to start and keep your business running during the slow months is funding. Before you start the business you need to figure out where you are going to get the capital. Thankfully there are quite a few options that will manage the funding for you.
The traditional route is usually acquiring a term loan, a credit card for your business, or a business line of credit. After you have the business up and running, you can try to get an SBA loan.
Be Prepared For Emergencies
It’s very important to be prepared for tough times with extra cash. The catering industry is easily affected by external factors so you need to be prepared for tough days. Your utensils may break, and you will have to replace them. The vehicles you use for delivering the food and supplies will need maintenance and repair. So have a contingency plan ready for unforeseen incidents like this.
Rounding Up With Your Catering Company
Preparing and delivering food to others is something that makes most people feel very happy and satisfied. After all, feeding people good food and making them content is a very gratifying experience. And being able to do that as a business is pretty commendable. So follow the initial steps mentioned above and start and run your catering business smoothly and easily.
