Making a Catering Business Plan That Easily Lands Customers

So, you’re thinking about starting a catering business, or maybe you already have one, but feel it’s time to level up. Either way, catering business growth offers room for both culinary creativity and promising financial returns. 

We all know that success in the catering industry, or any business, doesn’t happen by accident. It takes more than just delicious food to beat the competition; you need a well-crafted catering business plan to attract and retain your customers to increase revenue.  

Whether you are a novice or someone who has already set foot in the industry, this article on how to make a business plan for catering is your roadmap to success; a way to plot out your catering service journey, foresee obstacles, and ensure you reach your destination and earn more than you invest. So, buckle up and let’s get started!

Significance of Having a Catering Service Business Plan

Let’s get one thing straight: a well-crafted business catering plan is not just a formality. It’s the backbone of every function in your catering business. Here are four reasons why it matters: 

1. Clarity of Vision: A well-organized, informed plan clarifies what your catering business stands for, what it aims to achieve, and how you will do so. Specify what’s different about your catering business, the clientele that will resonate with your services, and how your offerings will add immense value to their lives. 
2. Customer Acquisition and Retention: A well-structured plan for your catering business makes it easier to identify and target your ideal customers. 
3. Financial Planning: It helps you understand the costs involved in every stage of your business, how to invest your money wisely, and forecast profits to mitigate risks. 
4. Strategic Decision-Making: A catering plan becomes a reference guide for your business when making key decisions like how much money you are going to spend on marketing and how many employees you need to hire. 

Understanding the Catering Market and Emerging Trends 

Before starting any business, you need to know what kind of competition exists, their price points, current offerings, existing demand, forecasted demand, and differentiation strategy. The catering industry is based on seasonality, high quality, creativity, and trends. If you don’t offer the right services, your business may fall behind its competitors. Here are six key trends that are driving huge change in the catering industry: 

1. Health-conscious options: There’s been an increased demand for health-conscious catering options in recent years. A Nielsen study shows the majority of customers (approx. 88%) are ready to pay extra for healthy food.  Items like plant-based soups, poke bowls, smoothie bowls, grain bowls, fermented foods, and eco-friendly food containers are trending in the catering industry.  
2. Sustainable practices: Caterers are promoting eco-friendly practices like locally sourced ingredients, reusable packaging, and reducing single-use plastics. It lowers business operational costs and attracts more environmentally cautious local customers.   
3. Niche diet menus: Caterers are offering more customized menus with options for different dietary needs, such as gluten-free, dairy-free, nut-free, vegan, and vegetarian. Menus that provide niche diet selections are also trending up as they fulfill an increasing number of guests’ needs and make your customers feel valued.  
4. Experiential catering: According to a survey the current generations are more likely to choose dining experiences that are visually appealing and shareable on social media platforms.  With this need in mind, catering businesses are offering immersive dining services, such as pasta stations where guests can watch chefs make their pasta or edible art displays.  
5. Dance floor bites: Caterers also offer bites that are easy to eat while people are dancing, such as late-night snacks or pizza served on wooden pizza paddles. It keeps your guests energized and satisfied as they can enjoy their food without pausing their dance moves.  
6. Superfoods: Superfoods may seem expensive, but they are becoming the go-to choice for high-end guests. Offering superfoods like sea moss and yuzu has become another trend in certain events with high budgets.

9 Key Steps to Make a Catering Business Plan 

Creating a successful catering business requires careful planning and strategic execution. From understanding your target market and defining your unique offerings to establishing efficient operations and ensuring compliance with legal requirements, your business plan should provide the knowledge needed to thrive in the competitive catering industry. Now that we’ve laid the groundwork, let’s get into a customized catering plan in nine steps to attract and retain your customers: 

1. Know Your Catering Customer Base 

The first step in any business plan is research. Your market research should include knowing the products and dishes you’ll serve and to whom you’ll be serving your food. 

Identify Your Niche 

Catering is a broad industry, so narrowing your focus will help you stand out. Ask yourself the following question: 

• Are you going to specialize in corporate events, weddings, private dinners, or maybe large-scale events? 
• Is there a specific cuisine or dietary focus you want to lean into, like vegan, gluten-free, or organic? 

Search local competitors and analyze their strengths and weaknesses. What gaps do you see in the market? For instance, if most caterers in your area focus on weddings, you could specialize in corporate catering to gain a competitive edge. 

Understand Your Target Audience 

Once you’ve identified your niche, it’s time to define your target audience. Think about your ideal clients’ demographics such as age, income level, location, and lifestyle. You can use Paytronix's customer insights tool to gather valuable data on customer behavior and preferences.  

For example, if you’re targeting corporate clients, you might want to focus on businesses in urban areas with frequent events, while for weddings, you may want to target young couples in upscale neighborhoods. Create customer personas—fictional representations of your ideal clients to tailor your marketing and services to their needs. 

2. Define Your Catering Business 

Now that you’ve got a sense of the market, it’s time to define your business. Think of this as setting the tone for everything you’ll do moving forward, which is where your mission and vision statements come in. 

Crafting Your Mission Statement 

Your mission statement is the core of your business. It’s like your guiding principle—the "why" behind everything you do. It should be concise but powerful, capturing what your business stands for and what sets it apart from others. 

Think about what makes your catering services unique. Do you engage in unconventional branding, such as bold colors, fonts, and tone of voice across your marketing materials? Are you committed to sourcing locally? Are you focused on delivering exceptional customer service? Your mission should be clear, concise, and customer focused. 

Example: "We provide unforgettable catering experiences through personalized menus and exceptional service, using only the freshest, locally sourced ingredients." 

Setting a Vision for the Future  

Your vision statement is all about the future. This isn’t about pie-in-the-sky dreams; it’s about setting realistic goals that you’re motivated and capable of achieving. Maybe you want to expand to multiple cities or become the go-to caterer for corporate events in your area. 

Example: "Our vision is to become the leading eco-conscious caterer in the region, recognized for innovation and excellence in culinary experiences." 

3. Service Offerings: What Will You Provide? 

The next step is outlining what exactly you’ll offer. Your catering services business plan should be specific about your offerings. Consider what types of menus, additional services, and unique experiences you can provide. Here are three types of most common catering services:  

• Full-Service Catering: This includes everything from food prep to serving and clean-up. It’s ideal for large events like weddings. 
• Drop-Off Catering: Perfect for corporate events where you deliver food, flatware, and utensils but don’t stay to serve. 
• Buffet-Style Catering: This can be more cost-effective and appeals to clients looking for a casual or semi-formal event. 

Create a Diverse and Creative Menu 

Take note of emerging trends and customer feedback. If you notice that many potential clients are asking for healthier menu options, it’s probably worth developing a health-conscious menu. Or, if you’re serving the wedding market, consider offering packages that include specialty cocktail pairings or dessert bars.  

Keep your offerings diverse and consider both popular and niche dietary preferences like pescetarian, low fermentable oligosaccharides, disaccharides, monosaccharides and polyols (FODMAP), and Dietary Approaches to Stop Hypertension (DASH) diets. Use seasonal ingredients to decrease costs while promoting fresh and flavorful dishes. This also lets you change your menu regularly, keeping things exciting for returning clients.  

4. Catering Business Model 

Once you decide what you’re offering, it’s time to discuss how you’ll charge for it. Your business model outlines how you plan to make money and needs to make sense of the types of services you offer. 

Catering Business Based on Pricing 

Your pricing will depend on several factors, including your market, the complexity of the event, and your costs. Here are the three most used and effective catering pricing models: 

• Per Person Pricing: This is straightforward and works well for larger events like weddings and corporate functions. You charge a set rate per guest, which covers food, staffing, and other essentials. 
• Event-Based Pricing: This model works better for smaller, more intimate events where the focus is on personalization. You charge one lump sum for the entire event. 
• Cost-Plus Pricing: You calculate the total cost of food, labor, and equipment, then add a markup for profit. 

Whatever model you choose, make sure it’s financially sustainable for your business. You don’t want to underprice your services just to land clients. Instead, focus on delivering value that justifies your pricing. 

Run a cost analysis for a typical event, factoring in food, labor, and other expenses, then decide on a reasonable markup to ensure profitability. 

5. Marketing Strategy: Reaching Your Customers 

Once you have your niche and service offerings nailed down, it’s time to focus on your marketing strategy. A great business plan for catering always includes a clear, actionable marketing strategy to help you land customers. 

Build a Strong Online Presence 

Having a strong online presence is crucial to be competitive in this fast-paced world. This means creating a professional website and being active on social media platforms that align with your target audience. 

• Website: Your website is your digital storefront. Make sure it’s user-friendly, visually appealing, and optimized for search engines (SEO). Include essential pages like an About Us section, menu options, pricing, testimonials, and a contact form. 
• Social Media: Platforms like Instagram, Facebook, and Pinterest are ideal for showcasing your food and events. Share high-quality images, behind-the-scenes stories, and client testimonials to attract more customers. 
• Online Ordering System: People like to order their food online, so you must grab them on their desktop or mobile device. Provide a user-friendly first-party online ordering system to let your customers book orders without any hassle. 

You can use free online tools like Canva and Photoshop to create stunning visuals for social media, even if you don’t have a design background. Regularly post mouth-watering images of your dishes on social media to capture your followers’ attention.

Traditional Marketing: Personal Networking and Referrals  

Sometimes, the best marketing comes from word of mouth. Network with local event planners, venues, and florists who can recommend your services. Establish relationships with vendors in related industries and offer referral discounts to clients who recommend your services to others. 

6. Operations and Staffing: Running the Show 

Your operational plan is all about the logistics of running a catering business. From sourcing ingredients to managing staff, you need a clear plan to keep things running smoothly. Running a catering business is a lot more than just showing up with food on the day of the event. You’ll need to manage: 

• Sourcing: Find reliable suppliers for fresh ingredients, and make sure they align with your business values (e.g., local, organic). 
• Staffing: Whether you’re hiring full-time staff or freelancers, make sure your team is trained to deliver high-quality service. 
• Logistics: This includes everything from transportation to event setup and cleanup. 

Create an event checklist that outlines every step of the process, from menu planning to breakdown, so nothing falls through the cracks. Start small and expand as you grow. You don’t need to buy every piece of equipment upfront. Rent what you can, and only purchase when it makes financial sense. 

7. Financial Planning: Understanding Your Costs 

No business plan is complete without solid financial projections. You need to have a clear understanding of your costs and how you’ll make a profit. Here is a basic breakdown of catering business costs for your financial planning: 

Initial Startup Costs  

When starting a catering business, you’ll face several upfront costs. These include: 

• Equipment (kitchen tools, serving dishes, etc.) 
• Initial inventory of food and ingredients 
• Marketing expenses (website, business cards, etc.) 
• Permits and licenses (more on this later) 

Ongoing Expenses 

After you’ve covered your initial costs, you’ll need to consider your ongoing expenses. These include: 

• Food and ingredient costs 
• Staff wages 
• Transportation costs (fuel, maintenance) 
• Overhead (kitchen rental, utilities) 

Create a detailed list of all your initial startup costs. This will help you determine how much capital you’ll need and whether you’ll need to seek financing. 

An Effective Catering Pricing Strategy 

Your pricing should cover your costs and generate a profit, but it also needs to be competitive within your market. Consider the following pricing models to prevent loss: 

• Cost-plus pricing: This involves calculating your total costs (food, labor, etc.) and adding a profit margin. 
• Value-based pricing: Price your services based on the value you provide to clients, not just the costs. This works well if you offer high-end, specialty catering. 

Regularly review your prices to ensure they align with market demand and your business goals. You can then adjust your catering prices as necessary based on changes in food costs, labor, and client expectations. 

8. Risk Analysis and Contingency Planning 

Every business has risks, and the catering industry is no exception. From last-minute event changes to supply chain disruptions, things can go wrong and it’s wise to be overprepared. 

Identifying Risks 

Some common risks in catering services include: 

• Supplier issues: Your food supplier may not deliver on time or may provide subpar ingredients. 
• Venue challenges: Unforeseen problems at the event venue, like inadequate kitchen facilities. 
• Weather: For outdoor events, bad weather can ruin everything. 

How to Plan for Mitigating These Risks 

You’ll need backup plans for each of these risks to ensure that your catering business stays on track. Build a risk management plan that outlines potential challenges and how you’ll address them. For example, have a list of backup suppliers or offer clients rain-check policies for weather-dependent events. This will not only help you prepare but will also boost client confidence. 

9. Legal Requirements to Stay Compliant 

Running a catering business requires compliance with various legal regulations, which should be a key part of your business plan. You’ll need to secure the right licenses, permits, and insurance to operate legally. Catering businesses typically require the following permits, licenses, and insurance: 

• Business License: A general license to operate your business. 
• Food Handling Permit: Ensures you follow proper food safety protocols. 
• Health Department Permits: Inspections and approval from your local health department. 
• Liquor License: If you plan to serve alcohol at events. 
• General Liability Insurance: Covers accidents or damage caused during an event. 
• Workers’ Compensation Insurance: Required if you have employees. 
• Commercial Auto Insurance: Covers vehicles used for deliveries and transport. 

Consider contacting your local government or a small business association to get a clear understanding of the permits and licenses required in your area. Remember that every region has its own set of rules. So, based on your service area, know the legal picture and make sure your catering business complies perfectly.  

Let’s Turn Your Catering Business Plan Into a Reality

Starting a catering business is exciting, but it takes careful planning to get it right. It’s a living roadmap that evolves with your business. 

By following the steps laid out in this article, you’ll have a strong foundation for starting or expanding your catering services. Keep revisiting your plan, adjusting as necessary, and don’t be afraid to seek help when needed. Try Paytronix to manage most components of your catering and restaurant business with ease. You can also download our 2024 loyalty guide to retain your potential customers.  

With a clear strategy in place, landing customers and growing your business becomes much more achievable. Now, it’s time to take the next step and put this plan into action. You’ve got the blueprint—now go out there and start building!