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Starting a Small Catering Business

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Many aspiring chefs look to restaurant chains that are successful worldwide and dream of reaching that level. It seems impossible - but it happened for them, why can't it happen for you? Everyone has to start somewhere. It takes an idea and an obsession to see the vision come to life for every successful business to get off the ground, and catering businesses are no different.

Here Brian Matthews, owner of Pen-Y-Bont Hotel, details all you need to know when starting a small catering business.

You have identified a market niche and you believe that you are the person to fill that niche.  Perhaps you have been preparing sandwiches for parties as a favour to friends and now you would like to set up as a professional buffet service? Maybe, fed up with the number of lorries pulling up in the layby in front of your house, you decide to cash in by selling them burgers? There's much to consider.

Funding

So let’s assume that you are equipped with your business plan and have the necessary finance at your disposal. This could be your own capital from savings, sale of property or from an inheritance to give a few examples.  Alternatively the start-up capital could be provided by a bank or other beneficiary in the form of a loan or grant.

In the past grants have been available through funding directly from government or the European Union, but in recent years these have become more difficult to obtain and now will only offer 25% of the total project cost, as opposed to 50% in 2009.

It’s worth doing some research into how other businesses have been helped to develop.  For example, if these businesses are local to you and have received government grants for plans similar to yours it can de-bar you from assistance. There's a lot of information about small business grants available.
                     
You are now ready to notify local authorities of your plans to run your catering business and you will no doubt be ready for all the demands for payment for council tax, services, licences and so on. The government has produced a booklet that covers this.

Commercial contract rates for electricity and gas are higher than domestic so you may want to consider metering of your private usage where possible and/or applicable as this can save you money. This can also improve your chances for government assistance with free boilers, insulation etc. as these will not be forthcoming for any premises that are primarily identified as commercial.

Insurance

You will also need to shop around a few good insurance brokers to get quotes for your Public Liability Insurance - expect to pay a four figure sum for this – though if you get a helpful broker they can be worth their weight in gold.  The big companies won’t know who you are from one phone call to the next so it really helps to speak to a friendly voice when the inevitable problem arises!

 Consider your insurance options very carefully and read all the details of your cover; what your staff are covered for and how customers, visitors and contactors are covered while on your premises. This is vital in the event of a claim of any kind.  Also look carefully at any exclusions or operative endorsements to ensure that you have the level of cover you require.

Additional policies can be worth considering such as Key Man Insurance to protect you against loss of your own physical abilities or those of a key staff member. Once you’ve found the right policy you can address any building works, risk assessments etc. in order to meet your legal obligations before you begin to trade. The environmental health officer, fire officer and health and safety adviser will all play a role in this process too, and can be a mine of useful information.

Kitchen equipment

So one day, all advice taken, you can make capital purchases of the equipment that will help you prepare your food. New oven? Is the guarantee valid for commercial use? Consider the volume and intensity of production: will you be cooking a lot more than before? How hot will it get? How powerful does your air extraction system need to be?

Designing (link) and equipping your kitchen requires research: after all, you are going to spend a lot of money and you’d be surprised how many people admit afterwards that they didn’t give this sufficient thought.

We all know the conundrum, costs must be cut but standards must be maintained or improved. If you can afford the best set-up then do it. Usually you are better off spending a bit more on recommended and recognised brands rather than buying the very cheapest items.

Let the experts help you with advice both for your unique circumstances and from their experience of a wide variety of brands and catering situations. Similarly, buy what you need, not what you think you might need sometime in the future. Even a very attractive bargain is not a bargain if you never use it!

Listen to your customers

You are now ready to open to the public and provide them with those delicious tasties!  Hopefully they will love your product and come back for more. Be ready for more suggestions for improvement as some could be of real value.  A good listener is a good learner.

 Remember that it is more important that your product and service are 100% right than that you are 100% right.  People will enjoy the feeling that their suggestion is helpful so keep the door to advice open, it helps you build your relationship with your customers.

Forget old-fashioned idioms like “the customer is always right". This is not true and ultimately not helpful. How can your staff be protected from being abused by someone who is always right? However take every opportunity to make your customers happy. You can aim to turn them into your fans and then direct them to your social media sites to continue the appreciation. They may well get their friends to join in. In this way your popularity, and with it your footfall, will increase.

It is a good thing to get to know your clientele: not just chatting with them but also demographics like age groups, income, interests etc. The more you know about them, the more effectively you can meet their needs and target your advertising and marketing.

Obviously you can pick up clues from conversation, though discretion is a great talent to have in assessing what will appeal to your customers. You need them to trust you and believe in you in order for them to buy into your brand and image. So be trustworthy and discreet and people will be more inclined to open up with information.

Promoting your business

Most businesses, though not all, will benefit from a website. This should be attractive with photos of your food products and customer testimonies.  It should explain what you do and clearly display your contact details.  Then it must be easy to find amongst all the other websites. There are many theories on website functionality, and what was true last year can be obsolete now.

Rather than pay people to optimise your google ranking it can be more of a long-term benefit to write some fantastic pieces of text describing your business and products, or produce a video for inclusion. If it’s funny or amazing in some other way then perhaps your video will go viral on YouTube. Top tip – funny, amazing and includes animals being funny and/or amazing, you can’t go wrong with that.

As a small business in the big catering business pool it can be difficult to get noticed at first.  Identify your unique selling points and the niche market that you are hoping to access.  Then use this information to improve the targeting of your website with keywords that are typical of the exact search engine questions that people enter when looking for your type of business.

A great tool to help you identify these is Word Stream’s Free Keyword Tool.  Once these are set up in your Keywords you will receive more focused and targeted traffic that should be much more specific to the services or products that you provide.

What to expect

Final tip: Murphy’s Law applies: if it can go wrong, it will! You will be working under the pressure of other people’s expectations as well as your own, so beware of cutting corners.

It is very important to know your set up inside out.  This includes things like water and drainage services, as increasing your activity due to business will expose weak links in the chain.

It won’t make you immune to the ridiculous, but it may help you to respond quickly to resolve any emergent problems.  If you have attended to all these aspects of setting up a small catering business then you have probably become a bit serious, so remember to see the funny side and enjoy your time with your customers. They will end up being your friends.


PROFILE: Brian Mathews of the Pen-y-Bont Hotel

"The hospitality industry has been my passion since I started my own business over 10 years ago. It took a lot of work to make it the success it is today, I’ve certainly experienced the rough and the smooth!

I believe you never stop learning and I plan on keeping you up-to-date on the subjects which will resonate with you in this ever-changing industry.”


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