We all love attending events, weddings and fancy parties where we meet new people and have fun, but the main reason we love it is FOOD. Yes, that’s right, we’re finally writing about food and specifically about who arranges for all your consumption during a huge party.
Catering as a term in itself tends towards one’s needs, so you’ll need a plan to cater to people’s immediate needs. Therefore, we present everything you need to know about to start your catering business.
Table of Contents
What is a Catering Business Plan
The catering business in India has an annual growth rate of 25-30%, proving there’s a lot of profit for this niche in this country. Catering is the only business immune to recession and rate cuts, and which ultimately depends on customer service, quality and pricing. The catering business has a lot of players in the industry, and it can get overwhelming to start your business preparing food for a vast number of people. It requires a lot of first-hand preparation, experience and patience.
Catering includes food business, and survival will never go out of trend, so there is ample scope to open your own business depending on the location.
Types of Catering Business
- Door to Door Catering – Students in hostels or Paying Guest facilities who crave home food avail these services, also known as tiffin service.
- Mobile Catering – These are moving services, where food is served through food trucks or are set up in urban streets or food streets where they serve a large gathering of people.
- Hotel/Restaurant Catering – A catering business that takes care of the food and beverage section is contacted. This happens in cases where there are special events in a hotel but no food services.
- Private Catering – Private chefs come under this category as they cook a meal every day for lunch and proceed to do the same for other households. Couples who plan surprises or baby showers also contact these services.
- Wedding Catering – This comes under Event Management. Weddings require catering business from event management companies, and on a budget basis, standalone franchises also provide their services.
Steps To Start Your Catering Business
Let’s go through a step by step guide to consider all the requirements needed to form a successful catering business plan.
1. Business Plan
Form a business plan to decide your target market, capital requirements, franchise plans, and future strategies. The ultimate goal of building a business around catering also comes with a lot of responsibility, so a business plan to gain insight is undoubtedly needed.
- Purpose of Business – An individual or partner looking to build their business must first decide their niche and the particular catering service they would want to provide. There are many different types of catering, including gourmet, street food, healthy nutritious food etc. Finding a niche, they’re comfortable in helps the company in the long run. The experience in this particular niche would be a smooth sail for an original recipe or ideas later. This ensures more clarity and research for the business.
- Products & Services – The customer base can determine a particular product or service. Decide the service first, whether catering for functions, buffet style, personal chef requirements, traditional restaurants etc. Next, list down the food options for the menu; they could range from Indian, Chinese, Italian to Vegan. Please make sure you start with sample menus to receive authentic feedback from customers and improve. Understand the competition around you and adjust your rates accordingly, as a price above the market level can be a massive blow to your business as it’s a new one.
2. Budget
Being a huge part of the market, the business would be costly and split into many segments. The first step is to consult a financial advisor to avoid unnecessary costs and deal with the paperwork.
- Capital – Catering business needs a considerable amount of cash flow for vendors, suppliers, budget planning, setting up etc. Angel investors are the best way to approach setting up your business, and savings could also help when at risk. Variable expenses are counted for your staff, food supplies, vendor management etc. But the fixed costs calculate for business insurance, rent or lease payments, legal expenses, fees and permits. The average budget to start your catering coup in India is INR 20 lakh, and you can seek loans from banks through various schemes.
- Kitchen and Rent – If you’re looking for a part-time business in catering, look for kitchen spaces you could rent every month; this will allow you to save money for other expenses. Any company owning at least 25-30 people for a catering business will need 100 sq. feet of space, so look for areas with these measurements for an apt setting. The rent would differ on location, so make sure your site attracts people for a return.
- Kitchen Equipment – Once your capital is secured, look out for the equipment. Start by making a list of necessary tools and if any of them are available on rent because kits can be pretty expensive, instead of losing your capital on long time investment, look for rent options. Rent your equipment based on your niche, like wedding receptions need stalls and extravagant food options like champagne or chocolate fountains, so invest in them on a requirement basis only.
Equipment may include cooking ovens, refrigerators and freezers, food storage space for small kitchen gadgets such as food processors or pasta makers, knives and other utensils, pots, pans and mixing bowls. Some of these equipment can include heavy transit vehicles such as food trucks , banquet carriers, cold packs etc.
3. Market Research
Market research includes location survey, following trends, selling advertisements, finalising the vendors etc.
- Vendors – Look for supplier companies who have separate budgets for small businesses. You can start by buying your items wholesale since they’ll be fresh and cheap. Still, as the business grows, it’s necessary to tie up with a local vendor or supplier company as only they can provide raw items and ingredients.
- Target Market – The customer market depends on the products or services you provide, and there are a lot of criteria to choose from and attract the right customers. If you’re looking for wedding niches, then make sure your dishes are elaborate and have good ratings as food is the essential trait in a wedding, obviously after the couple. If you’re looking for events, then approach event management companies; for tiffin services, you could contact Paying Guest facilities and hostels. Choose your niche to choose your market.
- Competitor Analysis – Food is a universal need, so there will be competition at every step, but the best part is that people like to experiment. So lookout for the competitors in your area and look into their niches; make sure you don’t choose something which already exists as it can lead to a downfall due to the loyalty factor.
- Advertising – A marketing strategy is a must in a business plan, as nobody can know about your business if you don’t advertise it. List how you want to meet your clients, like a local town festival or street food fests, and give out brochures and fliers. Contact corporate wedding planners or event management companies for weddings, and meet with local photographers and planners in need of food services. Set up your social media accounts for online marketing and give free samples for every meeting you attend.
Licences needed for Your Business
Whether big or small, every business needs to have licences that state that it is legal and recognised by the State. So these permits are a compulsory part of building your business. You could apply for vendor services from FSSAI; it’ll come down to hundred bucks for essential vendor services.
- Identity Proof of the Applicant – Aadhar Card, Voter ID, PAN Card, Driver’s Licence etc.
- Address Proof – Electricity Bill, ration card etc.
- Business Pan Card and GST Registration Certificate
- Bank Statements and last six months’ salary slips
- Passport size pictures
- Partnership Deed or Single Proprietorship depending on the type of franchise
- Food Establishment Licence – This is a necessary licence issued after inspection by the State Inspector.
- Liquor Licence – If you provide liquor at an event or wedding or only have a liquor store, a licence is compulsory.
- Quality Certificate – These licences are provided by the State and depend on your niche, but a quality certificate is necessary to determine that your business offers a good taste.
- Catering Insurance – Never neglect catering insurance as it’ll protect your business from all risks and accidents and protect your customers as well.
These are the most necessary licences needed for a catering business. However, if you can receive sessions from a chartered accountant or an attorney, you could get a list of all the permits required for your specific business.
All in all, it does take more than just cooking to establish your own catering business. You need to be extremely careful and follow the above steps to start your business, as the food business is a seasonal one, and writing a business plan makes it more accessible. Food is the golden entry to everyone’s heart, and once you register your taste, they’ll only be knocking for more.
