1 Catering Management Chapter 1 Introduction to Catering Current Catering Statistics The US industry includes about 10 000 businesses with combined annual revenue of about 14 billion dollars Demand for catering is expected to expand over the next 5 years Catering revenue was up 9 in 2011 In 2012 it should increase 6 Catering is a highly fragmented business with the top 50 companies accounting for only 15 of the total business The Catering Profession To be a caterer you need drive and a passion for entertaining Culinary experience is not enough Business acumen is critical as well The Catering Profession Can t I just start my business at home Characteristics of a Successful Caterer Organized Excellent time manager Multi tasker Friendly and hospitable Great oral and written communication skills Understands social and religious cultures custom Good networking skills Proficient accounting ability Excellent negotiating skills Problem solver Your Catering Identity Weddings and holiday parties So much more than that o Party platters o 5 Star Dining at Home o Special Dietary Catering Examples of Niche Markets Events Weddings Anniversaries Catering Management 2 Birthday parties Civic meetings Bus tours Boat catering Tea parties Corporate catering Cuisine Vegetarian Organic Locally produced foods International Catering to Niche Markets Getting started Types of Catering Social Catering Business Catering On Premise Catering Once you determine the type of catering business you would like to operate it is time to consider markets that you can sell to Large organization vs Do it Yourself o Social catering accounts for about 25 percent of all catering sales o Business catering accounts for about 75 percent of all catering sales On premise catering is any function banquet reception or event that is held on the physical premises of the establishment or facility that is producing the function On premise caterers such as hotels convention centers or restaurants usually have the advantage of offering many services under one roof They can also provide sufficient space to house the entire event and plenty of parking Restaurant vs Catering Operations A restaurant differs from a catering operation in terms of hours of use menu and how the client determines their food selection Restaurants w o Catering o Hours open are established o Menu is broad Caterers 3 Catering Management o May only be open when events are occurring o Menu is limited On Site Catering Restaurants o Most common type of business that offers on premise catering o Provides easy way to get into catering since most of the overhead expenses rent etc are already covered by the restaurant Hotels and Resorts o Have a department that specializes in banquet services o The ability to tie room sales to a special banquet event is important o Hotels usually have the advantage because they can offer many services under one roof as well as sufficient space to house the entire event thereby enticing the customer with a one stop shopping opportunity On Site Catering Examples Country City Clubs o Most have banquet facilities Banquet Halls costs Types of Catering Institutional Catering o Specialize in social events o Needs to be large enough to handle big parties to help cover overhead o A subset of business catering o Hospitals airlines universities and retirement centers o Typically provide service at the institution itself o Often given a multi year contract to provide services Mobile Food Carts o A subset of business catering o Fancy term for a food service business on wheels o Many of the overhead costs associated with catering are eliminated o Locations can vary Off site Catering somewhere else An off premise caterer has a production facility or rents one but hold events 4 Catering Management Typically requires much less cash to get started because the kitchen does not need to be in a highly visible area Parking needs are minimal Many restaurants also offer off premise catering since they already have a kitchen Institutional Catering Contract food service companies operate many facilities that are capable of supporting catering events Many of these firms operate food services in large office buildings where executive dining rooms can be used to house special parties and meetings Some contract food service companies are also capable of handling off premise catering events Chapter 2 Starting a Catering Business Critical Factors in Starting a Catering Business Location Capital Knowledge Location Location Location Every real estate agent will tell you that location is key More importantly the location you choose should fit well with your target audience Location much less of an issue if you are an off premise caterer Location Demographic Decisions Need to research the characteristics of the areas you are considering Local agencies such as chamber of commerce and economic development alliances can provide this information Slow starts are not uncommon for a new business General rule of thumb is to have six months of fixed expenses as cash Without cash flow you can t pay utilities salaries or vendors Variable expenses food labor will vary depending upon your business Capital 5 Catering Management Developing a Business Plan The business plan is a roadmap for any catering venture It forces you to think objectively and should answer the following o What you must do to get started and resources time money you will need to expend o How long it might take for you to run a profit breakeven analysis o What information customers vendors and investors will need as they decide whether or not to support or conduct business with you Elements of a Business Plan Executive Summary o Should be the last section you write o Tells the reader where your company is if not new and where you want to take it This will be the first thing they read so it should be intriguing Market Analysis o This analysis illustrates your knowledge of the industry through facts and statistics trends etc o Starts with industry overview current size of the industry historical o Then narrows down to your target market Includes demographics about the target their location and seasonal or cyclical trends that affect them o Finally should include a competitive analysis If focusing on multiple products i e weddings civic meetings etc an analysis should be done for each product o Barriers which might limit your entry into that target market are identified Organization and Management o This part of the