Updated September 9, 2021
I spent many hours talking with the founders and owners of three successful catering businesses.
I wanted to understand how they came into the business, what challenges they had experienced, and importantly – what their advice is to anyone who is thinking about starting a catering business.
I first wanted to know what background my three founders came from, so I asked them – how did you get started in the catering business?
Do you have catering industry experience? or did you just get started?
Like so many business owners in various industries that I talk to, my successful trio came from very different backgrounds, and as often happens, two of them didn't even have any experience in the industry. It's not unusual that an idea starts in someones mind, and then they act on it – and each of these three have turned their idea into a successful business.
But the catering business is all about making and serving food, and, people expect good quality.
So do you need to be a chef? Or have some commercial kitchen experience?
I asked the three successful founders the question that was at the top of my mind:
Or can you hire a chef as needed? or do you even need a chef at all?
So my three experts all agree – you don't need to be a chef or formally trained in culinary skills to start a catering business.
You just need to take the time and effort to learn the job, and make sure you're doing things safely.
Most people starting a catering business don't have a lot of money to spend, and some people want to start a catering business with no money.
I asked my three experts how much you need in order to get started.
Can you get started with almost no money? What are the must-have things, and what can wait until later? Can you rent some equipment until you can afford to buy it?
The two founders who started without much money both said that it's possible to get started in the catering business for a very small amount of money.
The third founder, who runs a successful food truck with a catering business, estimated a higher number based on building out a commercial kitchen – but then also pointed out that you don't need to do that. It seems the three founders were all saying the same thing.
If you're selling catering services, you'll need a menu of options for your clients to choose from.
I wanted to know how to approach designing a menu. How can you avoid things that are difficult to prepare, or things that cause a lot of food wastage.
I asked my three successful founders:
What are the things you should consider? what type of menu items should you include or avoid?
The three experts all agree that starting with a limited menu – and perhaps even sticking with that well into the future – is the best way to go. It gets you established, and lets you and your team get a good routine going, and helps you produce high quality food for every event that you cater.
But – how do you make sure you're actually making money?
How do you come up with the prices on your menu? It can't just be guess work, right?
I asked the three successful catering business owners how to set prices in a way that guarantees you're making a profit.
Is there a set formula? Or is it just based on what others are charging? How can you make sure you're not losing money?
Again, all three founders were saying roughly the same thing – the easiest way to set your prices is to calculate your exact food costs per dish, and then charge around 3x that amount as a menu price.
If there's more time that goes into it, charge more – somewhere around 4x or 5x ingredient costs.
And – on the note of ingredient costs – I wondered if catering business buy food cheaper than everyone else.
Where do catering businesses buy their food and ingredients from?
Are they buying from a regular supermarket, like you and I? Or are they buying from a food service supplier like Sysco or US Foods?
I asked my trio:
are you buying from a supermarket? or a food service provider? or somewhere else?
So you get a good menu together, you buy your ingredients just right so you don't have leftovers or food waste. Then you're winning business and catering events, and suddenly, you're running a profitable business.
The question everyone wants to know the answer to is – how much money should you expect to earn with a catering business?
I asked my three founders to tell me how much a catering business could make.
Is it a super profitable industry? can you start a catering business and replace your current income?
The catering business seems to have a huge amount of potential. Most of the experts I interviewed said you could easily make 6-figure incomes relatively soon in the business.
With a big earning potential, and relatively low startup costs, I wondered how a new catering business would attract clients.
I asked my three experts how they got their first few clients and customers, and how they built their business from there.
what methods work well for scoring your first few clients as a new catering business?
One of the three founders has a food truck attached to his catering business, which seems to be a great way for people to try and enjoy the food. The other two both said they did farmers markets, and got a stream of customers that way.
I wanted to know if the industry was competitive, and what customers care about when they're choosing a catering business.
I asked my three experts:
what do customers care about when they're choosing a catering business?
Good food and good reviews seems to be the winning formula, as told by the three industry experts.
When you're new in any industry, it can be tempting to think that you need all the fanciest things, and you might end up buying a bunch of things that you'll never actually use.
I asked my three catering business founders – is there something they regretted spending money on, that someone starting a catering business could just avoid?
is there a piece of equipment that is just unnecessary? or a service from a service provider that should be avoided?
The catering business seems like the type of business where – if you get the basics right – you can have a successful and profitable operation that just grows and grows each year as you accumulate more and more happy customers.
I wanted to know what a typical work day is like for the three founders now that they're into the established stage of their business. I asked them:
are the hours long? is it relaxed? what about days when you have no events?
Sometimes, knowing what type of things to avoid as someone entering a new industry can be just as important as knowing what to do.
I asked my three experts what they've seen other catering businesses do that is just madness. Things that shouldn't be happening in the industry, but still happen.
what mistakes can make a catering business look unprofessional, and earn them a bad reputation?
Some industries are wildly competitive, with vendors and suppliers keen to outbid each other and win the deal. That can lead to shortcuts and bad customer experience in the long term – and I wondered how that sits in the catering industry.
I asked my three founders whether they're actively competing against other businesses, or, they just have their offering and stick with it.
is it intensely competitive? or do most caterers just stick with their offering, and let customers choose whoever they like?
I've seen some businesses that make more money from add-on services and selling extras and upgrades than they make from their main business.
I wondered if there's anything like that in the catering industry – are there services or products that can generate additional revenue for a catering business?
any add-ons, up-sells or cross-sells that can increase the invoice total for an event?
My three experts have generously shared their wealth of experience. You can take their tips, tools and strategies and implement it in your own catering business startup, and probably save yourself many years of learning things 'the hard way'. I wanted to know their final thoughts, and summarize them in a bullet-point format.
I asked the three successful founders – what final advice would they have for someone starting a catering business?
the three successful founders share their keys to success in this industry, based on their own experiences
Without needing too much money, it seems possible that anyone can start a catering business if they have the time to put into learning and researching and understanding what they need to do. The biggest thing that the three catering industry experts kept repeating to me over and over again was that you need to do your research! I have spent over 100 hours learning everything there is to know about the catering business, by talking to industry experts and caterers. I have compiled it into the worlds most useful guide, How to Start a Catering Business. You can check it out here.
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