8 Running a Catering Business Business Tips

Catering business management requires a high level of organization. You will be managing staff, creating or customizing menus to suit every occasion and tracking your expenses in order to stay profitable. Catering also includes the challenge of preparing, cooking and serving food in unfamiliar settings.

Catering can be fun, but it’s also stressful work. There are tight deadlines and special events at stake. It’s not easy to manage the many moving parts, expenses, and variables that are constantly changing based on location, event size, and customer preferences. It’s also much harder to cook plates on demand than to prepare large quantities of food. To cook 400 steaks perfectly, it takes a lot of training, communication and teamwork.

Catering involves managing long-term customer relationships, as the interactions go beyond a single lunch or dinner. Caterers typically work with clients for months before an event. This means that ensuring a positive experience is key to keeping them as customers for many years.

We will cover all the information that caterers require to run a successful business. Catering business owners, especially those offering catering services in Auckland NZ, will learn about the basics, while seasoned professionals will get tips on how to sustainably grow their business.

8 Tips to Manage & Optimize Key Costs in the Catering Business.

1. The perfect location to set up your catering business headquarters

Catering businesses require a variety of spaces. Catering businesses that cater small events under 50 people usually only require a small office and a storage area for servingware, decor and a prep kitchen.

Catering companies who cater weddings, galas and retirement parties as well as corporate events and award shows will need more space. The catering company will still need to have a small tasting room and office. But they will also need a large kitchen with enough space for 12 cooks. They may even need walk-in freezers and fridges.

It can be difficult to choose the right location for your catering business. It should be centrally situated, as you will be providing services to your entire city and the surrounding areas. You will also need to have a van or several and a place with a loading dock.

Before you sign your lease, make sure you review it and negotiate any changes. Rent, mortgages, utilities, such as gas, water and electricity, will all increase in cost the bigger the space. The costs of internet, insurance and administrative and legal fees are not space-specific but they can change from month to month.

2. Find an attorney and secure catering licenses and permits

Before you can start accepting bookings, there are several permits that you need to obtain. You will likely need a catering permit, food handlers’ permit, liquor license and employer identification number (EIN). These applications can be lengthy to complete, and even longer to process. If you run into any problems during the permit process, consider working with an attorney.

3. Get your catering team trained and keep them engaged with good pay

Catering businesses require chefs, waiters, dishwashers and event managers to ensure that the food is served and customers are satisfied. Catering staff have more unpredictable and flexible schedules than restaurant workers. They work more in the high season (summer and winter holidays) and less in January and May.

Labor costs are a large part of the catering business expenses. They can vary significantly depending on whether it is high or low season, and also when comparing different events. Find the right number of staff to cater each event. Too many staff members will result in inflated labor costs, while too few staffers may lead to confusion and poor service.

It’s important to pay your staff a living wage or more, even if it is significantly higher than the local minimum wage plus tips. You should find room in the catering budget for a living wage, or even more. Health care benefits, at least for the full-time employees, can also help attract top talent.

4. Keep track of the food cost percentages often

The food cost percentage may look different in a caterer’s business as opposed to a restaurant. However, it is still an important metric.

Catering is pre-planned, so it’s easier to manage your margins. You should have your calendar planned months in advance. This will allow you to know how much money you can expect to make from each event, and how much inventory you need to purchase to create those incredible culinary experiences. Be sure to build your catering menus with profitability and taste in mind.

Catering food costs should be around 28-32% for restaurants, but with advance planning and discounts on large quantities of inventory, caterers can get the food cost percentage a little lower.

You may want to consider raising the price of your catering packages if you see your food costs percentage increasing due to higher prices for ingredients or changes in vendors.

5. Marketing your catering business

Catering is exciting because every event offers a unique marketing opportunity. Every event attendee will want your business cards if your food and service are outstanding.

Catering business social media marketing is a great place to start: Posting photos and videos of your food, staff, and the events that you cater can help make your catering business niche look irresistible and attract new customers. Social media marketing for catering businesses is a good place to begin: posting photos and videos about your staff and food, as well as the events you cater can make your niche catering business appear irresistible, and attract new customers. You can also increase your revenue by sending an email newsletter to past customers that includes special offers and promotions.

6. How to create a layout for your catering HQ that works

Catering companies have an easier time when it comes down to design and layout than restaurants. Since customers will only see the front desk and perhaps a small tasting area, they don’t need to spend a lot of money on aesthetics outside those two areas.

The layout of the catering prep kitchen as well as fridges and storage spaces must be carefully planned, tested and improved when your cooks begin to spend their day working there. If there isn’t enough space for large containers, hotel pans and freezers in the fridge, then you will run into problems and your cooks may have to spend time trying to find solutions. Ask your chefs how they would improve the flow and then make changes based on those suggestions.

7. Invest in professional services

Catering companies regularly use professional services such as silverware rental companies. Other services include social media marketing freelancers and accountants. Budget for these extra costs knowing that certain services will be required more often than others.

8. Keep your kitchen stocked with the best catering equipment, transportation, and technology

Catering companies prepare most of the food at their headquarters. They have everything a cook could need, including ovens, stoves microwaves, dry storage and fridges. Then, they transport and unload the food and equipment at their event site, while chefs do final preparation and presentation. This means that your business needs a van dedicated to the job (or fleets of vans) to transport everything without any spills or drama.

It can be difficult to know what equipment is needed on site and what’s already available. To avoid being caught off guard, make sure you always have these items in your van.

1. Folding Prep Tables
2. Extra knives
3. Extra cutting boards
4. Extra containers
5. Small wares with high usage (like microplane graters and tasting spoons).
6. Extra aprons
7. Extra rags