Catering Business-How Much Money Can Really Make?
Many people have turned their love of cooking and entertaining into a good living by starting catering businesses.
Catering is a multi-billion dollar industry in the U.S. and as one of the fastest growing segments of the food and beverage industry, the catering business offers great opportunities for those wanting to start a small business with a low start up cost.
In this article we will look at catering business profits, earnings and salaries and how much money it is really possible to make in this industry. Then we will examine some of the things that separate the really successful players from the amateurs.
Is a $100,000 Yearly Profit Possible in Catering?
Many people consider a $100,000 pre-tax salary or profit to be a benchmark for success and they wonder if they can reach this level of earnings in catering.
Most small catering business owners who put in the effort can expect to earn between $20,000 and $40,000 profit per year for the owner during the first couple of years. After a couple of years in the business, you can easily scale up to earning a ‘six figure’ annual income from catering.
Tips for Getting to the ‘Six Figure’ Level
1) Forget catering from your home kitchen if you want to get to this salary level. Business savvy caterers do volumes that require them to either rent commercial kitchen space by the hour, arrange access to restaurant kitchens during off-hours or focus on ‘on-premises’ jobs only and use the kitchens of their clients.
2) Successful players love spending time creating menus, following food trends and interacting with people without neglecting the business side of catering.
3) Start to create a powerful brand right from the start with your logo, company values and unique service that will grow into a valuable asset that allows you to command a premium price for your catering services in the market.
4) Develop systems for every part of your business to streamline day-to-day operations. Analyze the way that you and your staff work and strive to increase productivity.
5) Understand that there are ‘niche’ markets within the catering industry that you would never think of until you really start looking. Top caterers find these untapped opportunities, and carve out a business catering to the specific needs of these groups.
6) Perfect the process of consulting with new clients and learn how to politely up-sell them on some of your more expensive offerings.
7) Realize that you are leaving money on the table if you don’t also up-sell additional event related services to your customers.
8) Learn how to hire, train and organize a small team to assist you with food preparation, delivery, service, and even sales if you want a realistic chance of getting to an income level above $100,000.
9) Don’t neglect traditional advertising methods but also pursue other modern marketing methods such as networking, cross promotions and guerrilla marketing.
10) Successful caterers also recognize the importance of customer referrals. Customers may introduce friends to you because they like your food and services but there are also other ways to get them talking about your company.
To get started on the right track, do as much reading as you can about general small business management and the catering business specifically. Many highly successful caterers have published start up guides and you have a chance to learn from their mistakes instead of making your own and you can benefit from their expert advice and insider tips.
It is possible to make a lot of money in the catering business if you put in the effort. Reaching a level of earnings that will allow you to make a ‘six figure’ salary from your catering business is entirely possible within your first two years in business.