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HTM 2514 1st Edition Lecture 4Outline of Last Lecture I. Location for beginning your Catering businessa. Formal demographic market surveyb. Successful start-up tipsII. Creating Business Plana. What it includes specificallyb. Example of formal Business PlanOutline of Current Lecture I. Permits, Licenses and Insurance Policies a. Incorporationb. Insurance Coveragec. Inspectionsd. ComplianceII. Growing your Businessa. Different approaches to the business (Culinary-driven or sales-driven)Current LectureI. Permits, Licenses, and Insurance Policies – before you serve your first dinner as a Caterer, you need right business structurea. Is your company a sole proprietorship, LLC or S/C Corporationb. Need adequate insurance coveragec. Health and fire department permits and inspectionsd. Compliance with Occupational Safety and Health Administration (OSHA) standardsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.e. Be aware of payroll taxes and workers comp. paymentsf. These are issues all caterers must address:i. Incorporation – protects you from litigation1. If client sues you and your business is a sole proprietorship then you lose everything/personal assets but if client sues and your business is a corporation then only what the corporation owns is at risk2. FEIN – Federal employer identification number = tax status identifier used fro invoices, federal and state taxes, payroll and wholesale purchasesii. Insurance Coverage:1. Building/Property Insurance – caterer must have insurance to compensate a loss of property (fire, theft, etc.) and loss of potential revenue caused by inability to provide services and policy should cover costs of reconstruction2. Liability Insurance – every caterer needs insurance that covers injury/illness to clients, guests, employees resulting from negligence on caterer’s parta. Find Agent familiar with insurance needs of Caterer3. Workers’ Compensationa. Federal law makes employers provide workers’ compensation insurance to employees free of charge; provides income to employee when they’re out of work due to work-related injury/illness4. Licensure – food prep areas must be licensed by local health department; before food can be produced, the kitchen must be inspected by health department officialiii. Inspections:1. Health Department – arrives unannounced during busy production time to get accurate data for evaluation; checks refrigeration temps, storage techniques, internal temp of food items, etc. 2. Fire Department – if your business has public access then annual inspection is required by local fire and safety officials so there are no unobstructed exits and stairways, exits marked with clearly lit signs, proper fire extinguishersiv. Compliance:1. Occupancy codes – fire safety officials measure public space and set maximum occupancy rate; once occupancy limit is set, makesure you don’t book a party/event where number of attendees might exceed ita. Both On and Off-Premise caterers must comply2. OSHA standards – federal agency managed by US Department of Labor; they set and maintains progressive standards for safety in workplacea. Ex: safety valves on oven lights, forms of flooring, roundingof corner of table surfacesb. Depending on location of business, additional permits/licenses/insurance policies may be required by lawII. Growing your Business: make sure your business grows so you can achieve your businessgoals a. Culinary-driven caterer: concerned with offering best quality foods and using chef’s own creativity, may limit volume of business to control quality of food and make atmosphere more intimateb. Sales-driven caterer: business-minded caterers may offer average-quality foods and simpler menu, drive business using enhanced services/clever marketing; don’t appeal to small/affluent marketi. Revenues come from larger mainstream populationc. Profitability is always paramount – today Sales-driven catering business with consistent product is normally more profitable than the culinary approachd. Stay the Course the first Year – changing business identity prematurely is normally a mistake in the case of not receiving a ton of business right after opening; stay true to your business plan/strategy because a change in identity can be confusing to customersi. Start with reserve capital to sustain business during first year (and use for marketing down the line)ii. Catering industry thrives on referrals and recommendationse. How to Build the Business: choose your events carefully so that customers will associate your business with type of events you doi. Guests attending the event could be possible future clients ii. Establish and maintain the identityf. Tactic for maintaining business identity – signature menu items; many familiar foods that public associates with catered affairs (Ex: pig in a blanket with a twist)i. Caterers reputations are shaped by the food and services they provideii. If Caterers make an exception for one guest then they should be preparedfor future requests from other customersiii. Fair pricing is necessary for growth of business/reputation1. Ex: methods of decoration, tabletop design, employee uniforms, innovative services that competition doesn’t


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