The A-Z of Business: How to Run a Catering Business

How to start and run your new catering business. THE A-Z

OF BUSINESS

In my previous articles we covered two related business ideas. One was how to start and run your own restaurant and the second article was related to the restaurant franchise business. In this new article we shall cover a new area of expertise in the hospitality business. The catering business.

First and foremost, it is essential to know that catering is similar to running a restaurant business in the sense that it is a highly vocational business. The hours are long and the work is very hard, particularly if you are wellestablished. It is by no means an easy business and it is highly demanding and very competitive, but also fascinating.

I have been involved both directly and indirectly in catering for some odd twenty years. Some good results were obtained along with a few disappointments as well. The good news about catering is that it is somehow simpler to run than a restaurant and that waste and stocks are practically non-existent. In that sense it is a blissful business but do not think for a second this is an easy sector. Nevertheless, and taking into consideration the complexity of any food-related business or hospitality venture, catering can be quite attractive and very productive.

Competition is fierce out there so that is the reason why you should be offering different services and offer something more original and of the best quality. The first thing you should bear in mind is where and to which market do you wish to cater for? In my opinion you should not limit yourself to a small market. Particularly in the early stages. Take anything that can yield a profit within reason, and think what area of catering do you wish to establish yourself in.

You can pick up some incredible deals.

For instance, if you are thinking of weddings, parties, and events (where there is good money to be made), you should create an infrastructure that can cope with this sort of market. A warehouse from where to operate your business. Make sure you study and know the regulations inside out and when looking for warehouse premises check that they suit your needs. Smoke

In today’s market you need a good website.

extractors, sanitary regulations, water supply, and the very long etcetera that comes with this. The answer is to employ an industrial engineer who specialises in this sort of business. If you do not know one just get out there and check as many restaurants as you can and ask them who did this sort of job for them. They will give you some recommendations worth gold. Once this point is sorted you go on to step two.

An initial investment is necessary to include machinery and equipment. The answer is to buy second hand machinery in different outlets that sell catering equipment for the trade. You can pick up some incredible deals. The restaurant and catering trade attract an important number of people who set up business and do not succeed. Their equipment is normally sold off at bargain prices and often it is in very good working order. Plan out what you really need. Your cook will help you with this and make sure you stick to the bare minimum. Over

the years one learns that staff and people are very generous with budgets and money - epecially with someone else’s funds. The answer to this is to get only what you need in the beginning. If all goes well you can start buying up extra equipment at a later stage.

And where do I get my clients from? This is a very complex subject. There are many different ways of getting customers. In today’s market you need a good website where you offer your clients the services you can provide. Put as many photos as you can and show them the sort of cooking you can do for them. You will get clients via the website and in addition you should get as many agents as you can. These can be wedding planners, sales people, and personal contacts you may have in the trade. The normal

It is that special service you can offer that people want.

commission rate is about 10%. Some successful restaurateurs use their restaurants as a departure point to launch their catering services. This is a very good way of marketing your services since it is perfectly feasible to know the sort of fare you can do for them in a specific party or event.

Whatever you do try and do something different. You can try luxury gourmet picnics or a gourmet sailing experience. There are plenty of sailing boats out there in both sides of the border that would be delighted to provide a service for a charter fee. Corporate clients love this sort of thing and will pay handsomely for it. In France and the UK, hot air balloons are very popular. That is another option to be offered.

When it comes to marketing, social media can be incredibly efficient at helping you to get the right punters; word of mouth can do the rest. In the old days when we were heavily involved in the hospitality business, we took anything that brought a profit, so we did Gaucho BBQ parties, classic ice cream barrow services, late night fresh pizza from a portable oven, churros and chocolate, and whatever crossed our minds at the time. These were all money makers. Iberian ham cutter stations are very popular

in Spain and abroad. The rich clientele could not care less about spending that extra money to impress their guests - and that is where the money is made. The product is of paramount importance but it is that special service you can offer that people want.

Once you are established and you have built your clientele, they will keep coming back to you. Their daughter’s 21st birthday party. A first communion. A wedding. A pre-Christmas party. The list is endless. And the good news with catering is that you do not need to employ a huge amount of people full-time. Some caterers employ very few people, they just have a very good contact list. Cooks and helpers that work in this or that great hotel or restaurant and they are willing to work for you in certain specific dates for the right fee. By law, in Spain, people in the hotel trade have two days off

per week. These cooks are very willing to work for you and make extra fees when required. And the good news is that in the catering business bookings rarely come in the day before. Au contraire, the events are always planned months ahead which gives you the tremendous advantage of having plenty of time to organise your team. Pay your staff well and they will rarely let you down. This rule applies not only to cooks and helpers but for the waiters as well. You will need a top-class maître d' to run the show for you and it probably makes sense, once you get established, to get a full time one in your payroll. People like being in the hands of a reliable person running the show for them. It makes them feel confident, which is so important in the hospitality business.

Sources of supply are of paramount importance and it will take time to spot who has the best deals and provides the best service. Always remember to have enough supplies to cater for the entire timeframe of the party. When it comes to beverages, we always use the most reliable companies that allow us to work on a sell or return basis. In this way you can overstock without any compromise. Whatever amounts of sealed bottles are left unused will be returned to the wholesaler.

In the catering business waste is practically non-existent. A professional company will get all it needs to cater for the specific party and will get paid accordingly. Whatever leftovers remain have been paid for by the client beforehand, so it is all well tied up in that sense.

If the hospitality business is your game, catering services could be a very clever line to follow. After all, it has much less competition than restaurants, and the caterers in general seem much more professional. The variety, different types of settings and venues, and the vast options that clients can have make it a fascinating business.

JORGE V.REIN PARLADE MBA Business Consultant +350 54045282 jorgeparlade@aol.com