by Jim Smoot

Created on: July 17, 2007

One of the biggest reasons so many new food service business fail is the belief that if you're a good cook, you can be successful in this industry. Nothing could be further from the truth. While great food is essential for lasting success, there's a lot more that goes into it. For many people, the food and customer service are the easy parts. It's the business aspect that's their downfall.

The first step is to contact your local Board of Health to find out what licensing issues there are for your area. As a food service business there are regulations regarding the type of equipment, food storage, and food handling procedures. Catering is a very competitive business, and licensed professional caterers do not look favorably on unlicensed businesses taking their customers. You'll avoid a lot of headaches (and fines) if you do it right from the beginning.

You also need to license your business with the state. Once you have your tax identification number, the products and equipment you purchase will be tax exempt. Over time, this can be a significant savings for your business.

Like with any good business plan, you have to clearly define what it is you want to do. Are you interested in specializing in weddings, large outdoor events, private dinner parties? Do you want to be a "jack of all trades", or do you want to be an expert at a few specific types of events. By offering a wider variety of services, you will have a broader market, but specialists demand a higher fee. Determining your niche at the beginning will help guide many of the decisions you'll have to make later in the process.

After you've decided what you want to offer, you will need to focus on your target market. Who will be interested in what you are offering? If you are specializing in weddings, you will want to target brides (and mothers of brides). For larger events, you may want to target large businesses and organizations. Private dinner parties might be targeted for more affluent professionals.

You will also have to decide on the types of food you will be offering. If you already have a kitchen, the type of equipment you have will determine your capabilities. If you are planning on purchasing new equipment, knowinng what types of food you want to offer will help you decide what to buy.

You need to decide if you are going to rent or own your equipment, linens, china, etc. Many caterers charge an equipment fee whether they own the equipment or not. while owning your own equipment means you keep more of that fee, there are costs that go toward maintaining, storing, and replacing your stock.

Finding a good supplier is another major decision. A small savings in food cost multiplied out over the course of a year can result in a major savings. Make sure the food provided is not only inexpensive, but is good quality. If the quality of your food suffers because you are trying to save a little money, over time you will lose referrals and repeat business.

Develop a list of suppliers that complement your business. Fo instance, if you are specializiing in weddings, have a list of quality bakers, florists, etc., you can recommend. This may not increase your bottom line, but the good will it can generate is priceless.

If done well, catering can be a very rewarding business. Not only can it be very profitable, it can also generate a sense of accomplishment that you won't find in most jobs.

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