The food catering business is quite profuse and lucrative, most importantly catering business is not only about food, preparing food in large quantities requires knowledge, expertise, experience and manpower management. If you look at the statistics, the catering business in India shows a growth rate of 15-20% every year.
The attractive part about this business model is that it does not involve high investment but returns are notably high in number, but it takes time to become established. A catering business plan is very much suitable for homemakers as it can get started from the home’s kitchen, it’s a leading opportunity for housewives to earn doing the same work.
If you are initially starting it on a small scale begin it with serving 20-40 people that live in your nearby locality and if it works slowly upgrade it and turn it into a large-scale business (Contact: OneNDF for Catering business loans).
In this module, we will provide you with a step-by-step guide on the Catering business plan and “How to commence a catering business from scratch”. Stay tuned!
Catering Business Plan: Easy steps to follow
Before planning make sure you have pre decided your goals and understand the working patterns of this business. Educate yourself about food, nutrition, the price of vegetables and other food items, and also select the type of catering business that you are willing to start.
Finalise your Catering Business
This section will make you educate about the type of catering that exists in the market, so, at last, you can make a better decision about what to start.
- Wedding and social event caterers
- Corporate event caterers
- Big event caterers
- Door-to-door catering
- Private catering
- Mobile catering
As an entrepreneur, you can do all types of catering but not in the initial stages, first, create a brand name in the market, establish your goodwill and move accordingly.
(Do track customer response and make changes accordingly)
Create a Business Plan
After finalising the category that you are willing to serve, navigate that particular industry and keep a check on the best player and learn from it. It will be best if you do all the possible analyses in the initial stages of business and while planning.
Similarly, like any other business, do the industry analysis, competitive analysis, customer analysis, and most importantly financial projections – form a budget determining every potential cost involved and start doing marketing on the earlier hand. Management skills and experience are non-negotiable in the catering business, if you are a newbie to this it’s better you take some experience working with someone than start your own.
Finalise the Location
If you are planning to start your catering business from a home kitchen, make sure you have enough space to curate food for 15-20 people. In case you don’t have the required space try taking the area on lease from where you can deliver the food to your clients. 70-80 sq feet of kitchen area would be enough to start a catering business, the rent may differ accordingly as per the location of the place.
The suitable location for a catering business is PG, students and areas where working-class people reside. The areas which have a high number of students like coaching institutes, schools, and colleges are much suggested.
Read: Indian Retail Industry
Be Prepared with Investment
The important step that should be Pen down is the sources and how much investment is needed. If you start a catering business in India it will cost nearly INR 15-20 lakhs minimum.
The financial projections in the catering business will include
- Rental charges
- On-site Equipments & Installations
- Licences
- Purchasing of raw material
- Labour charges
- Marketing and Branding cost
- Other miscellaneous charges
The catering business comes in a saturated segment and hence it will include some hidden costs as well, if you lack finances Take easy working capital loans from OneNDF with easy repayment tenure and less rate of interest. You can also directly talk to India’s leading lenders and discuss your needs with them.
Must Read: MSME Schemes for Small / Catering Business
Get the Required Equipment
After acquiring the capital start investing in needed equipment like kitchen apparatus and other supporting utensils. The equipments required for the base kitchen area are
- Oven/Microwave
- Serving utensils
- Coffee / Beverage machine
- Tin foil
- Garbage bins
- Disposable containers for storage
- Cambro containers
Select a reputed vendor for Raw material
The raw material products like vegetables, oils, flour etc must directly come from a farmer or distribution agency. Get in touch with a vegetable wholesaler it will save a lot of costs and it will be fresh enough to consume and store. Once you get in the flow be in contact with 3 to 4 supply vendors, it will be best for you from a business perspective and also there always will be a backup option available to you.
Get the License and Permits
While initiating your catering business plan make sure you implement this step and get the needed licences and permissions from the concerned authorities. Registrations and permits give legal recognition to businesses while starting to make sure you have all of these.
- Food establishment / FSSAI License
- Business Registration
- Liquor licence (In exceptional cases, for party and event caterers)
- Insure your business
- Other licences include Quality Assurance, Health Insurance, fire safety and water permits also make sure your labour is above 18 years of age.
Hire the Manpower
Employees are the pillars of an organisation, that eventually decide the success or failure of any business. Getting the right manpower in the Catering business is of utmost importance. Always hire the staff very carefully.
You can also try to take the help of agencies that let you with cooks and servers. In the initial stages, you need around 10-12 people which will include
- Chefs
- Junior chefs
- Other cooks
- Delivery staff
(Maintain a code of conduct and separate uniforms for employees)
Marketing and Promotions
If you own a business or are a working professional then you must understand its importance and needfulness, most importantly try to learn how you can turn lead into customer using the tactic, the techniques and ways are mentioned below.
Use Online Platforms like social media such as Facebook, Instagram and WhatsApp for spreading awareness. Use High-Quality images on these platforms and make sure you maintain your Online Reputation.
Owning a Professional Website is a must if you are in the F&B business, this ensures authenticity and trust among the people. Word of Mouth is irreplaceable and works best in the food business (try to give discounts on referrals).
Always Network with People, Business Owners generally ignore it but networking has huge potential, Always be in touch with Banquet hall owners, party and event organisers to get the desired business. Print pamphlets and Billboards for greater output.
Use Technology for Stock and Order Management
There are many catering and order management tools available in the market that ensure the smooth functioning of operations using technological advancement. These softwares take care of your orders and inventories. Also no chance of human error or discrepancy is possible.
Read Article: Transport business plan
Conclusion
A catering business is among the simplest and most profit-driven business models, as said above one can start this business from a home kitchen and achieve enormous growth, also ventures in the F&B sector will always work if done rightly. In the module above we have deeply examined the Catering business plan and easy steps to follow if starting from scratch.
In case you are starting this venture on a small scale the required investment will be at least 1-5 lakhs and if starting on a large scale it can go somewhere between 10-20 lakhs. Be prepared with the amount in hand and if not prepared take credit assistance from India’s leading loan market place OneNDF, to date has disbursed an amount of nearly 2000 crore and is associated with India leading lenders.
If your business is in the Small and Medium enterprise (SME) sector then do not miss the government loan schemes and OneNDF financial products.
How to Start Catering Business Plan: Frequently Asked Questions
Q.1 What is the demand for catering?
The catering service business has estimated a potential market size of 103.28 Billion US Dollars by 2027.
Q.2 Is the catering business profitable?
Yes, it is a lucrative model and has the potential of 1-4 Lakhs per month for small scale and 10-15 Lakhs per month for large scale.
Q.3 What is the profit margin in the catering business?
Catering companies usually make 10-12% of revenue as profit.
Q.4 Which company is best for catering in India?
- Thackers Caterers Mumbai
- Brown Sugar caterers
- Delight caterers
- Dadu’s Hyderabad
Q.5 Which degree is best for the catering business?
- B.Sc (Catering Science & Hospitality Management)
- B.Sc (Catering and Hotel Administration)
- BBA in Hotel and Catering management
- Bachelor of Catering Technology & Culinary Arts
