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Preparing quality food in large volume has always been a challenging task for many caterers. It requires experience, knowledge, skill and staff management to deliver tasty food for various functions or parties. Lot of precision in required in cooking large volume of food and to make it possible proper staff management is required. Most of the caterers, who have settled businesses, try to franchise their trademark. However, a successful caterer always needs to have a business plan that should include all the details related to his/her business.
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Need for a Business Plan
A business plan is required for the starting up any business. It is the very foundation of the business and activities which are going to be conducted. Such as the goals you want to achieve, and the strategies to accomplish them. Therefore, you can adjust your supplies and utilize your energy at the correct place. Business planning might seem tedious and time-consuming but is eventually overwhelming with positive results. It is the most valuable tool, used by many successful caterers, as it is the fundamental factor that determines the future of your business.
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Basics of a Catering Business Plan
Catering businesses are known for providing quality food services to the communities, but starting a business is a painstaking task. To start a catering business properly, business owners shall follow the steps as discussed below:
1. Understanding the purpose of your business
This might seem obvious as it is one of the most critical steps to start any business. It is vital to have some basic knowledge about the catering business. Catering only specializes in serving food products to the people. These food products are categorized as fast food, meals, breakfast meals, etc. Out of these, you need to find your niche, that is, the domain in which you specialize. You can even develop an original recipe. Your purpose may also differ from different food chains like you may serve nutritious food or you want to provide gourmet food for the professionals or provide food to the middle and low class at affordable prices. Once the goal is clear, you can work accordingly to fulfill your goals.
2. Types of Catering
There are three types of catering in which you can establish a business, they are:
- Mobile catering: These caterers consists of the food truck and vans who sell their food products at street corners, fairs and places popular in an urban area. It is a simple concept where the catering can be done inside the vehicle and can be served to the people
- Private catering: This category consists of the caterers who are needed for various occasions such as parties, business meets, weddings, festivals, etc.
- Hotel/Restaurant catering: They are usually employed by hotels or restaurants as a subsidiary that provides food services to the customers. The restaurants can be individually run by caterers as well
3. Budget Planning
Budget planning is nothing but keeping an eye on the cash flow and working capital requirements. Like any other business, catering also requires a huge amount of capital for all the cooking equipment and supplies of raw materials, vegetables, raw meat, and other food items. Budget planning can help you understand where to invest and where to withdraw your money from, as catering is a saturated sector. It is advised to plan beforehand what the expenses of all the required elements would cost. This can help in troubleshooting the minor mistakes made and correcting the finance. An accountant can be hired who can look over the expenditures and keep a track of money.
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4. Market Research
This step is significant for a growing industry, such as a catering business. Market research involves studying the demographics, finding your target market and observing your competition. Market researching can help you know the requirements of potential customers and provide services accordingly. Like, surveying whether the people in your area of serving are more vegetarian or non-vegetarian so you can accordingly set the menu. Finalising the perfect location is the most important decision that may decide the future of your business. These are the major factors that can affect a business or can have an impact on potential customers.
5. Finding your Target Market
Catering is a broad industry that includes a lot of ways of providing services to customers. Since the business category is wide, deciding on your target market becomes hard as the position may already be overfilled with the competition. There are a lot of factors which can affect the target, some of them are as follows:
- Menu: The customer’s selection for a catering company largely depends on the menu/products you provide. It determines the number of customers, as they choose the one which fits the best for them based on their liking
- Pricing: The prices can affect potential customers largely. If you serve at a very affordable price, your target market is the low-middle class people. On the other hand, if your product is expensive, your target market is the well-to-do class who can afford your services
- Competition: It is really important to examine the competition in the geographical areas you are going to serve. If the target of the competition is the same as that of yours, you would have to think of ways to differentiate yourself
- Marketing: Letting the customers know about your presence is important in today’s market. Every branding requires promoting their products to potential customers; this can be done by making a website for your business, using social media platform to promote your business or just randomly distributing menus, fliers, banners, etc. near your business location. The modern catering market is all about online influence with attractive visuals and play of words to attract customers