How to Start a Catering Business ?

Here are a few tips and steps on How to Start a Catering Business? The catering business does not require too much of an initial investment.

The food catering industry in India is having an average annual growth of 25-30%.  You can start it small and then scale it as your business grows.

Here are some points you need to keep in mind-

1. Create a Catering Business Plan

Do research, Study the market, talk to customers and ask them about suggestions, note down their feedback, and solve the problems that they are facing with other businesses. You will get clients or business as contract catering for special events, private chef services, banquet lunch boxes, and so on. You can create a menu for each of the areas you have finalized.

The next thing you should do is decide the space you need and your storage requirements. If you plan to have a full-time catering business, you will require a permanent cooking facility and storage. If you want to start online catering services or a part-time business, you can rent kitchen spaces.

2. Make a budget plan and capital sources

The next step is to decide on your budget & source of capital. The budget may vary according to your preferences. You must also make a plan to spend your money efficiently on on-site equipment, licenses, rental costs, transport, and other such expenses.

If you do not have enough money to start the catering business, you can start approaching investors. If you can present your business as a lucrative and promising one, you will be able to attract investors easily.

These days, different Government departments offer schemes to small business owners. You can also approach these agencies/departments and avail of loans and other financial benefits.

3. Decide on the equipment & suppliers

Base the purchase of your kitchen equipment on the menu you have finalized. For example, if most of your items are fried, you may need a couple of fryers. On the other hand, if a majority of your items are baked, installing more than one oven will be a better idea.

Other important equipment you may need include storage cabinets, multiple-compartment sinks, refrigerators, heated & non-heated holding areas, utensils, etc.

4. Find Out Your Source Vendors for Your Catering Supplies

The raw materials or products for your business could come locally from farmers or a supply distribution agency. In the initial phases, you can use a wholesale club to buy your raw materials, as it saves up a lot of your money plus they are fresh! It is always easier to do business with a larger supply company.

Once you take up a few orders, start growing your network of supply vendors and agencies. You can then use it to do business with the best ones in the market.

5. Get your permits & licenses

You need to obtain different types of permits and licenses before starting your catering business. The Government of India issues quite a few permits to businesses that deal with food items. But, vendor registration with FSSAI is mandatory for any food catering business.

In addition to this, you also need to obtain different licenses/clearances such as the Shops & Establishment license, sewage license, fire and water clearance, etc from the concerned authorities under the State Government, before you can operate.

Once you operate with these permits/licenses, there will be periodic inspections from the authorities to check whether you are maintaining the prescribed health, hygiene, and safety standards, among others.

6. Decide The Menu

Menu engineering has been unanimously said to be one of the toughest tasks of handling a food-related business. You need to consider the raw material cost, the quantity, the change in rates, and so on. Competitors are one of the last, but important factors to be considered. It is important to know what your competitors are charging to sustain in the market.

Standardizing your recipe helps in reducing food costs to a higher margin by defining the exact quantity of raw materials required for each dish. A proper POS system will help you achieve that. It maintains a standardized recipe for you, ensuring constant taste and quality.

Your per-plate costing may vary according to demand and services added. Initially, try to have a moderate rate and consistency in your food quality to get more orders flowing in. Apart from that, the magnitude of the event will also decide the prices.

7. Hire adequate manpower

Any new business needs dedicated and quality manpower. Initially, you can handpick people for the head chef, junior cooks, and delivery people. When you have enough funds, you can hire an agency to provide you with trained and experienced manpower.

8. Market your brand

You can’t afford to ignore the value of marketing your new food catering business. You can use the below-mentioned marketing techniques to generate leads and convert them into customers.

1. Word of mouth- This is very important for a catering business. Build a personal touch with your customers so that they spread good ‘word of mouth regarding your offerings/services.
2. Use the power of social media- Most millennials and event planners are available on social media platforms such as Whatsapp, Facebook, and Instagram. You need to mark a consistent presence on these platforms and build fruitful connections.
3. Create your website- By creating your website, you can showcase your items to a larger audience. You can also have blogs on food items to engage potential customers and build trust with them.
4. Offers and campaigns- Organise campaigns in banquet halls, malls, and other prominent places. Provide offers to repeat buyers and look for referrals.