Start your own: Catering business
Reap some culinary rewards with guide to the catering business
What is it?
We’ve all been to wedding receptions,
business
meetings or hospitality events, and the one thing they have in common,
apart from the buzz of small talk, is the array of food that always
accompanies them.
While most people will simply ponder the varying culinary standards
on offer, the more entrepreneurial of you may have wondered what
business opportunities lie beneath the silver serving trays.
The catering at these events is more often than not provided by outside caterers. The catering
company
usually prepares the food at its premises and delivers it to the event
when needed. An outside caterer will sometimes also provide drinks,
crockery, cutlery and glassware, decorations and serving staff.
Broadly speaking there tends to be two sizes of company involved in
catering in the UK, according to Miles Quest of the British Hospitality
Association (BHA).
“There are some big contractors who deal with the major events,
such as Ascot for example. But locally, you have a whole string of
independent caterers who serve the local market.”
As an independent there are two main sectors you can target –
private and corporate events. The former category will consist of family
occasions such as weddings, birthday parties, dinner parties and
funerals. Whereas serving the corporate world you would be more likely
to provide food for business breakfasts, business lunches, board
meetings and evening receptions. Some caterers specialise in one or the
other, while others try to cover both.
Who is it suited to?
You might think that preparing a few sandwiches for a business
meeting is a job pretty much anyone could do. Don’t be fooled, however.
There’s a lot more to outside catering than meets the eye, and if you’re
going to make a success of the business, you’ll need some fairly
specialised skills.
Rather unsurprisingly, knowledge of food has always been a major
requirement. However, recent trends mean that this is now more important
than ever.
Firstly, customers’ tastes are becoming more sophisticated, due
largely to the increasing availability of different types of food and
the education of British palates by the media. Consequently, your
offerings may need to be more imaginative than the stereotypical cheese
and pickle sandwiches that come to mind when you think of conferences
and business gatherings.
The taste factor of your meals is not your only concern, however.
No one that works with food will forget the BSE scares surrounding
British meat, or the more recent concerns over genetically modified
food, so it's increasingly more important to offer food that is good
quality, fresh, and hygienically prepared.
Producing tasty and healthy meals quickly for groups of 200 people
is no walk in the park. Even if your business is big enough to have a
head chef to deal with the food preparation, having your own catering
knowledge will still be crucial. Hugh Walker, owner of The Factory House
corporate catering company in London explains.
“It would be madness to try and get involved in this industry
without knowing about food. I’ve seen it happen in restaurants, where
people have set up with no food experience, and the head chef has ended
up ruling the roost. This can be a disaster.”
Catering expertise will not only enable you to produce the right
meals for your clients; it will also be essential for the business end
of your enterprise. Anyone working in the industry will tell you that
the key to success in outside catering is controlling costs.
“As with any other business, it all comes down to cost. So if you
have no experience in food operation, you won’t know what costs are
possible,” explains Walker.
Catering is a competitive market and how you price your service
could be the difference between success and failure. “Catering is about
cost control as much as it is about cooking. You can easily waste money
if you over order on food. You need to be pretty astute with figures,”
says Quest.
You also need to be very well organised in order to run the
operational side of your business, explains Walker. “You are dealing
with a high number of staff and a perishable product. Controls and
routines have to be stringent. It can be quite a bureaucracy.”
If you lack the necessary experience, consider taking some courses.
Walker completed a degree in Catering Systems, which taught food
technology, but also management, accounts and how to set up catering
systems. If you don’t have the time or money to do a degree, there are a
range of Catering Hospitality NVQ’s/SVQs available. At the very least,
you should get some managerial experience in a catering business for an
insight into how it all works.
Finally, this is not a nine-to-five job. Sue Roberts of Topline
Catering explains, “Catering is unsocial since you’re inevitably working
when everyone else is partying. We do a lot of unsociable hours over
the summer and work a lot of hours in the week.” It is important to bear
this in mind when considering if catering is for you.
Rules and regulations
The fact that you’re dealing with food and potentially employing a
high number of staff not only means that you have to organise everything
extremely rigorously, you will also have to deal with an array of rules
and regulations.
Firstly, any business dealing with food is heavily regulated
by Regulation (EC) No. 852/2004 on the hygiene of foodstuffs and
the Food Hygiene Regulations 2006, which replaced the Food Safety
Regulations 1995. This regulation applies to England but there are
equivalent regulations for Scotland, Wales and Northern Ireland. There
is little difference between this and the 1995 law but the main change
is that you must now put food safety management procedures in place, and
keep up-to-date records of these.
More on these regulations can be found in a booklet entitled 'Food
hygiene - a guide for businesses' published by the Food Standards
Agency.
You are also required to register your premises with the
environmental health service at your local authority at least 28 days
before opening – this is still applicable even if you are using your own
kitchen at home. If you use more than one premises you will have to
register them all.
If you are planning to sell or supply alcohol you will need to apply for a licence from your local authority.
Rules governing any business that prepares food include:
The business premises:
Should be clean and in good repair, with adequate drinking
water, pest control, lighting, ventilation, lavatory, hand washing and
drainage facilities.
The room in which food is prepared:
Should have surfaces that are easy to clean and disinfect
(including wall, floor and tabletop surfaces) and should have adequate
facilities for washing food and equipment, storing food and removing
waste.
The food handlers: Should wear clean clothes
and observe good personal hygiene. They should not smoke when preparing
food and should be trained in all areas of food hygiene.
Equipment, containers and vehicles used to transport food:
Should be designed so that they can be easily cleaned and kept
in good state of hygiene. Vans will often need to be refrigerated if
transporting cooked food.
Food storage: Food and food waste should be
immediately cleared from surfaces and stored in a closed-lid container.
Temperature controls apply to dairy products, cooked products and
prepared ready-to-eat uncooked food. Although there is some flexibility,
these foods will generally have to be stored at below 8°C, so many
caterers have to use refrigerated vehicles.
Food hygiene law is rigorous and anyone setting up in business in
catering will have to think very carefully about where they set up and
what equipment they buy. Remember that environmental health officers
make regular inspections of food businesses and have the power of
closure if they think you are not up to scratch.
Roberts remembers, “When we moved into premises, we got the
Environmental Health Service (EHS) in at the start and said “What do you
want us to do here”. Like everyone, we still get regular visits from
the EHS, but it was useful to get them in from the start.”
The other area of red tape that will affect your catering
businesses comes from the fact that you may employ a large number of
staff, especially if you serve the food as well as simply deliver it.
This means becoming familiar with the raft of employment
regulations covering the recruitment process, pay, leave, discipline and
dismissal, as well administrating payments through the payroll and
setting up a stakeholder pension if necessary.
Market research
So you’ve decided that the business is for you and that you’ve got
the skills to succeed; it’s time to think about what sort of catering
business to start. The key to finding a successful formula for any
business is good research, but this is especially important in the
fiercely competitive world of catering. You will need to focus closely
on who your
customers are, what they want, and what you can
offer that no-one else can – your unique selling point.
As already mentioned, your possible client base will be business or
private – although you may target both. Serving the business sector
will predominantly involve lunches for business meetings and training
courses (cold sandwiches and other pre-cooked snacks), but may extend to
business breakfasts and evening receptions, which may involve providing
drinks and servers as well.
The major advantage with corporate clients is the opportunity for repeat
business.
Businesses like having a regular supplier, so if you provide a good
service at a good price and you’re reliable, you’ll become invaluable to
them. They will remember you and call you whenever they need some
catering.
The food you serve to this sector will need to be good quality and
freshly prepared, but since you will be preparing it at short notice,
many times to several different businesses over the week, the
gastronomic qualities of the food will not be the main concern. Your
organisational skills may be more important than culinary expertise in
this sector.
Alternatively, you could aim your catering service at the private
sector. Predominately this will be catering for large family occasions
such as weddings, funerals and birthday parties. To run this type of
business will require good culinary skills, since the quality and range
of your menu will be a major selling point, and you will have to be
flexible enough to cater for any special requests from clients for their
big day.
Think about offering extra services in order to stand out in the highly competitive private market. If you can
save
your clients time, effort and money by providing crockery and cutlery,
servers, decorations and marquee hire for example, you’ll
attract business much more quickly.
If you don’t want to focus on weddings, you can find a niche
through specialising in a certain type of cuisine, offering theme events
such as Mexican nights or hog roasts, or gourmet cuisine for dinner
parties.
How much does it cost?
Once you’ve got your killer business plan together, you’ll need to
get funding in order to set up. Before you approach the bank, however,
you’ll need to work out how much it will cost.
The major factor that will influence set-up costs is whether you
start up at home or rent premises. Setting up at home will save on rent
and equipment, although the alterations you may need to make to your
kitchen in order to comply with food hygiene regulations mean that this
is not the budget option it once was.
Even to run the most basic catering business you will need:
- Two ovens (£1000 each)
- Fridge/freezer (£900-£1200)
- A vegetable preparation unit (£700-£2000)
- Commercial microwave (£900)
- Pots, pans, knives and other kitchen equipment (£1000)
- Refrigerated van (£14,000)
You should also have a supply of crockery, cutlery, china and
glassware that you can hire out to clients. You will need some working
capital to begin with although, since this is a cash business, cash flow
shouldn’t be a problem once you get going.
“You don’t need a huge capital expenditure to start up,” explains
Quest. “You probably need up to £25,000 for all the equipment. Also, you
may need to buy crockery, cutlery etc. which can be a significant
expense.”
So you are looking at between £20,000-£50,000 to start up,
depending on the size of business and whether you are starting up at
home or moving into premises.
How much can you earn?
The catering business is not a sure-fire route to riches. Many
people do it for the love of working with food and the satisfaction of
helping people as they organise their special day.
Therefore, it might be worth starting it off as a part-time business
to supplement your usual income, until the business has developed enough
to support itself. Most of the caterers we spoke said it takes at least
a couple of years before you are earning enough to live on.
It
won’t be until you have a large operation that you start bringing in
good money. Perhaps the best way of growing a catering business is by
concentrating on the corporate market until you have established
yourself as the preferred supplier to a large client base of businesses.
Competition is fierce in this area, however, and you’ll have to work
extremely hard to make an impact.
Established caterers in the
private sector often diversify to increase their revenue streams,
offering equipment hire (catering equipment, marquee hire etc.) for
example.
Roberts started Topline Catering from her home in
Bristol as a part-time business. The business has grown gradually
over 20 years, moving from sandwich delivery to business lunches, and
finally to corporate and private events for anything up to 1000 guests.
From first-day takings of £13, the business now turns over £300,000 a
year.
It obviously several years to build up to this size, but a
small yet successful business could nevertheless turn over £100,000 and
earn a net profit of £40,000.
Tips for success
Get your name known: In this crowded market advertising is crucial.
Get your name listed in the Yellow Pages and use every space on your
vans and food packaging to promote your business. Consider buying space
in suitable magazines (wedding magazines) and network local businesses.
Maintain a high standard: Consistency is the key in this business.
Do a good job and your clients will come back for more. Let them down
and they will switch to one of the hundreds of other catering companies
out there.
Encourage word of mouth: The best way to get business is through
personal recommendation. This will come naturally if you do a good job,
but also ask clients for feedback and leave your business card at events
when appropriate.
Reassure potential clients: A wedding is the most important
occasion a family will have to organise, and the organiser will feel
more confident in using you if you can produce a portfolio of satisfied
customers to testify to your service.
Focus on your market: Different types of event require a different
service. If you can focus on a particular sector, such as weddings or
business lunches, and specialise in being the best in that sector,
you’ll have a good chance of success.
Useful contacts
British Hospitality Association
Tel: 0845 800 7744
www.bha.org.ukCatering Equipment Suppliers' Association
Tel: 020 7793 3030
www.cesa.org.uk
Food Standards Agency
Tel: 020 7276 8829
www.food.gov.uk
