7 Tips For A Catering Business That Makes Money
With revenues of nearly £5bn in a year, the catering market continues to offer substantial opportunities for new businesses.
However, it would be foolish to ignore the current threats that restaurants and mobile caterers are experiencing in the UK. The uncertainty of Brexit makes it more difficult for newcomers to establish a profitable business.
The recent news about Jamie’s Italian restaurant chain forced to close some of its restaurants across the UK is only an indication that only the best entrepreneurs can survive in the current circumstances.
Nevertheless, it doesn’t mean that there is no room for the catering industry to grow and reach new clients in future. On the contrary, the uncertainty of Brexit is a key factor to consider when you open a new restaurant.
Financial fluctuations have never forced the British public to stay at home; they bring people together and encourage them to enjoy a quality meal.
In other words, the market remains optimistic for catering entrepreneurs. With only one rule for success, profitability, entrepreneurs need to be creative to make it work.
Get a clear budget plan
Before profitability, there is the essential matter of viability. Indeed, it takes a little more than good will and the desire to surprise your customers’ taste buds to turn a catering idea into a sustainable business plan.
You can’t consider catering without researching the cost of your ingredients vs the price you want to charge for each dish. Ultimately, the purpose of this exercise is to ensure your restaurant can stay competitive while recovering your costs.
This isn’t a natural process, as external factors such as the weather or a disease affecting the harvest can influence the price of your ingredients.
Consequently, you need to find the best solution to maintain your budget and your competitiveness, which might lead to changing the prices or the menu.
Additionally, you need to constitute a reliable and effective team. Catering teams work hard and are rarely paid more than the minimum wage, so your viable budget rely on your excellent understanding of human nature to keep your staff motivated and performant.
If unsure, start a mobile business
There is no denying that opening your first restaurant can be a risky and significant investment unless you decide to follow a franchise solution. But, you can choose to test this challenging sector with a mobile catering business first.
Indeed, with start-up costs generally running low for mobile companies, you can start operating with only a few thousand pounds, which limits considerably the risk of losing your investment and accumulating unnecessary debts.
Additionally, mobile catering offers a manageable business strategy, as you can maintain your day job and operate your food on the go business in the evening or during the weekends.
As you grow your mobile business, it becomes easier to open a restaurant, following the strategy used by Duncan Bannatyne.
Keep a simple and manageable design
As tempting as it might be to invest in a grandiose decor when you first open your restaurant, the key is to establish a simple, cost-friendly and manageable interior that won’t blow up your investment.
As an entrepreneur, you need to put yourself in the shoes of your customers. When it comes to the catering industry, while the decor is part of the experience, customers who come back don’t do it because they found the colour of your furniture or the shape of the table appealing, but because they enjoyed the taste and the quality of your dishes.
Consequently, to cut costs down at this stage, you can choose a minimalist approach with concrete table tops. These are not only budget-friendly, but they are also easy to maintain using concrete polishing pads to smooth out scratches and irregularities.
You can also use concrete tops in the kitchen area instead of steel countertops, which are another favourite in professional kitchens.
Encourage catering events
While it can be difficult at first to gather a loyal customership, you can approach venues and events organisations to offer on-site or venue-based catering services.
Indeed, establishments that can combine party catering and restaurant offerings are more likely to survive in the long term.
If your restaurant can provide meeting space, you will not need to look for additional transport options – which can keep your costs down. Additionally, you can make the most of your event offering to attract future customers.
Create an exciting menu
As a restaurant, your menu is your marketing strategy. A menu that has been strategically engineer can limit your customers’ choice to a number of dishes per food category that is easy to manage.
If you put too much on the menu, your customers might grow anxious. The golden number seems to be seven, which is the perfect combination of choices without being overwhelming.
The quality of the menu can ultimately push customers to order more. For instance, the addition of photo can increase sales by up to 30%, and the smart price manipulation – cutting down your price by a few a few pennies – appears friendlier.
Offer an experience and stick to it
Your restaurant, whether mobile or not, offers an experience. It’s this experience that customers value. Restaurants that focus on making their customers feel special by learning their names and greeting them personally can already benefit from a favourable impression even before the customer orders food.
Besides, you need to maintain a flexible attitude. With more and more food-related allergies and intolerance issues, it’s essential to be able to offer alternatives to your customers. Can you propose a meat-free version of your main? Are you happy to prepare a special order by substituting specific ingredients?
Know your audience
Last, but not least, you need to research your demographics before you open a restaurant. Many high street chains ensure that they know the local audience so that they can choose to open in locations where the population meets their criteria. Similarly, you need to ensure that you open your restaurant in the right area.
In conclusion, the catering industry is full of promises for the entrepreneur who can marry business strategy, quality products, great taste, and an authentic experience. It takes a lot more than enjoying cooking to make it work, as Jamie Oliver is discovering with his famous Italian chain.
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