How to Start a Catering Business in 8 Steps | Le Cordon Bleu London

More and more high-end hospitality graduates have entrepreneurial dreams. Yes, many qualified chefs dream of working at inspirational restaurants alongside world-class chefs. But the ratio is shifting, with a growing number of expert chefs also aspiring to build a business.

Catering businesses are a good bet: the initial overheads are far lower than for opening a restaurant, you can build the business incrementally and the growth potential is practically limitless.

Also, the catering industry is enjoying a steady, strong uptick: spend in the UK alone on catering businesses doubled from £44billion in 1997 to over £89billion in 2017.

As you might expect, competition for a lucrative (ahem) bite of this market is fierce, so preparation and research are key.

Here are the main steps in setting up a successful catering business…

1. Research the Market

First things first, take a good look at competitors in your area. If it helps, create a spreadsheet or document with the following:

 – Competitor’s name(s)
 – Type of food
 – Demographic
 – Price
 – Size of company

Next, try to evaluate whether there’s demand in your area for another catering business, or indeed, if you’re sufficiently different to make an impact.

Talk to friends, use social media and investigate launching surveys on sites like SurveyMonkey. This was discussed in further detail in our article, How to Start a Successful Restaurant Business.

2. Pick the Right Food

The food you serve will do more than just nourish. It will be your brand. Think of what you most like to eat and to prepare – you’ll be preparing it a lot!

Next, look at cost – both of ingredients and labour. Vegetables are cheaper than meat (generally), but vegan food can take longer to prepare. Ideally, your product should be affordable to create, reasonably fast to mass-produce and look and taste great.

Test the food! Recruit friends and family – ideally from the market you hope to sell to. Give them samples and ask them questions on taste, visual appeal, price and whether they’d recommend a company that provided this food.

3. Find Your Niche

As well as the kind of food, think about where you feel most comfortable working. The latter will also be important when it comes to building business relationships and even aspects like billing.

Consider what kind of market you’d like to work in: do you feel more comfortable at corporate events, funky product launches, people’s homes or kids’ parties (to use just some examples). How big an order can you take initially? What qualities are most important to you in the food; taste, value, appearance, innovation, sophistication?

Your product should be unique to the area you’re working in, noticeably distinctive and a reflection of your own skills.

4. Draft a Menu

Once you’ve decided on the cuisine type and demographic, a menu is next. This, of course, is something you’ll eventually have to do anyway, but it’s also an important psychological step to take: the catering business will feel more tangible when you’re put your first menu together.

If possible, give customers as much choice as possible to choose from, both from a financial and culinary perspective.

Most caterers have tiered offering – varying the price plans, offering discounts for bigger orders, and so on.

5. Create a Business Plan

This has been discussed in our recent How to Start a Food Truck article.

Your business plan should include:
 – The menu
 – Costs, such as labour, ingredients, marketing, transportation etc
 – Margins on food sold
 – Projected earnings

6. Seek Financing (if necessary)

A catering company has lower initial overheads than many other food businesses, such as opening a restaurant. So, it’s possible to save money for the initial outlay and launch independently.

However, if you do need financing, you have some options (see also: Financing a restaurant).

Banks, credit unions and online lenders all offer competing loans to new businesses. Shop around for one that best suits you and incorporate repayments into the operating costs.

• Business Loan

Banks, credit unions and online lenders all offer competing loans to new businesses. Shop around for one that best suits you and incorporate repayments into the operating costs.

• Grant

Your business might very well qualify for a small business grant fund from your local government; there is information on UK grants here. It’s also a good idea to look into free, public advice services.

• Investors/Partners

You might know someone who’s keen to invest in your business, or who might be suited to going into business with you. Ideally, a business partner is someone whose skills complement yours, so that your combined attributes cover everything the business needs – business acumen, a flair for catering and a yen for generating business (through sales and/or marketing).

7. Organise a License

Every food business has to be licensed, and if you’re UK-based you can apply for one on the government’s food business registration site.

8. Network

Follow companies on social media that you think would be interested in your services, especially if it has potential for repeat business.

Bring literature (leaflets) and/or business cards to events that you cater in case you get an enquiry on the spot.

Ask around, spread the word and invest in marketing if you can.

Good Luck!

Starting and running a successful business is immensely gratifying. Catering businesses are competitive, but they are perfect for a first business because they have relatively low overheads and can build and scale.

Several Le Cordon Bleu graduates are successful food entrepreneurs, whether they’ve studied to become a chef or to run a hospitality business, choosing one of our professional cooking courses or hotel & restaurant management courses.