How Much Do I Need To Set Up A Cathering Services Business In Nigeria
Catering businesses are often an ideal, flexible alternative to opening and operating a restaurant. Catering businesses allow you the creative freedom of running a foodservice operation without standard hours or a rigid schedule
Before Starting Your Catering Business
Before you begin buying equipment or drafting a business plan, it’s important to understand what makes a catering business unique. On the plus side, operating a catering business requires much less financial risk and burden than opening a restaurant while still offering you creative freedom. Many caterers can easily rent a space or equipment, forego staffing if your operation is on the small side, and reduce food waste by cooking for an already known head count.
Alternatively, catering an event often puts you and your food in a less controlled environment than a restaurant. When you own a restaurant, you’re preparing food in the same kitchen every night and serving in the same dining room. With catering jobs, you’re either preparing food in a rented kitchen or on-site. During the event, you and your food are at the mercy of the venue space, their amenities, the weather, and staff you may not work with often.
Reap some culinary and business rewards with our guide to starting a catering business including writing a business plan, getting insurance and registering your catering company If you have a passion for cooking and customer service, starting a catering business can be a relatively lean start-up idea.
Work can be sporadic and there will be plenty of competition, but with hard work and good marketing, you can quickly build a reputation and a solid base of clients.
From choosing a niche to writing a business plan, getting a food license and catering insurance, we look at the steps you need to take to start a mobile or home-based catering business.
Who is catering suited to?
Producing tasty and healthy meals quickly for groups of 200 people is no walk in the park. Even if your business is big enough to have a head chef to deal with the food preparation, having your own catering knowledge will still be crucial.
If you lack the necessary experience, consider taking some courses. If you don’t have the time or money to do a degree, there are a range of Catering Hospitality NVQ’s/SVQs available. At the very least, you should get some managerial experience in a catering business for an insight into how it all works.
1. Choose your catering niche
In such a crowded market, it’s important to carve out a niche. Whether it’s a cuisine you have an interest in or a gap in the market you’ve identified, setting yourself apart from the competition with a unique and compelling proposition is the key to success.
The type of food you decide to make may well dictate the type of event you decide to work at, which will in turn inform your branding and marketing.
Generally catering is either private or corporate:
• Private – birthdays, weddings, anniversaries, funerals
• Corporate – catering for business events including office parties, awards ceremonies and other evening events, networking events and large meetings
Of course, you’re not just offering food, you’re offering a full service; an event, an occasion, an experience. You need to give people a reason to choose your business over another provider.
Take some time to diligently research your local market. What’s already being offered? What could you do better than others?
The corporate catering market
Serving the business sector will predominantly involve lunches for business meetings and training courses (cold sandwiches and other pre-cooked snacks), but may extend to business breakfasts and evening receptions, which could involve providing drinks and servers as well.
The major advantage with corporate clients is the opportunity for repeat business. Businesses like having a regular supplier, so if you provide a good service at a good price and you’re reliable, you’ll become invaluable to them. They will remember you and call you whenever they need some catering.
The food you serve to this sector will need to be good quality and freshly prepared, but since you will be preparing it at short notice, many times to several different businesses over the week, the gastronomic qualities of the food will not be the main concern. Your organizational skills may be more important than culinary expertise in this sector.
Concentrating on the corporate market can be one of the fastest ways to grow your catering business until you have established yourself as the preferred supplier to a large client base of businesses. Competition is fierce in this area, however, and you’ll have to work extremely hard to make an impact.
If you're considering corporate catering, you'll also want to consider things such as invoice payment terms, or even invoice factoring (more on the costs of invoice factoring here), to ensure you don't have a gap in cash flow between needing to pay suppliers and waiting for payment from a client!
The private catering market
Alternatively, you could aim your catering service at the private sector. Predominately this will be catering for large family occasions such as weddings, funerals and birthday parties. To run this type of business will require good culinary skills, since the quality and range of your menu will be a major selling point, and you will have to be flexible enough to cater for any special requests from clients for their big day.
Think about offering extra services in order to stand out in the highly competitive private market. If you can save your clients time, effort and money by providing crockery and cutlery, servers, decorations and marquee hire for example, you’ll attract business much more quickly and it’s a good way of diversifying your revenue streams.
If you don’t want to focus on weddings, you can find a niche through specializing in a certain type of cuisine, offering themed events such as Mexican nights or hog roasts, or gourmet cuisine for dinner parties.
Catering service styles
If you’re planning on catering for large, sit-down events, there are a number of different service styles you should be aware of.
• Buffet – guests queue up to help themselves to as much hot or cold food as they can stomach
• Wave service – suited to pre-set menus. A team of servers moves through the room dropping off plated food, usually starting with the head table in a wave. They then clear the tables in a similar fashion when the guests have finished
• Drop-off – food is pre-cooked and dropped off. There is no additional service of food from the provider. Guests help themselves or the customer organizes their own service (generally better-suited to food that can be served cold)
Full-service – can include set up, cooking and service, as well as cleaning and breaking down of the event afterwards
2. Decide how to start your catering business idea
Once you know what type of cuisine and service you’re going to do, you can decide whether to run it from your home, as a mobile catering business, or from a fixed site. Each come with their own advantages and disadvantages and it’s up to you to decide which best suits your ambitions.
Home catering business
As long as you have the necessary space and facilities, your home can double up as the base for your catering operation. This will save the costs associated with renting premises and buying equipment. That said, making large quantities of food for lots of people might require more than just a home oven and family fridge/ freezer, so you may have to invest in some larger capacity equipment.
The explosion in street food businesses in the Nigeria has led to the growing popularity of having a mobile food van at events. A mobile catering business gives you the freedom to go wherever the job takes you. You can pitch your van up at anything from a week-long music festival, to a day event or even a wedding.
Fixed site catering business
Operating from a specially rented or purchased site will allow you to keep your home and work life separate. You will also have much more space for storage and large kitchen facilities and your business will seem like a more slick and professional offering to customers.
3. Develop your catering business plan
Whether it’s a home-based catering business plan or a mobile catering business plan, a business plan is the cornerstone of any successful catering operation. Taking the time to write one will give you a solid plan of action and a mission to work towards.
A big part of the research stage of your business plan is calculating the size of your relevant market, where you’ll analyze exactly who your target customer is and how many you could potentially sell to.
It should detail:
• You, the business owner – what relevant qualifications and experience do you have in the catering industry? Have you previously run a catering business? Or even worked as a chef or waiting staff?
• The business – what is the mission of your catering business and how is it different from existing catering companies? Where will you find catering staff? How will the business be financed?
• The service – what type of cuisine will you be making? Where will you source equipment and supplies from? What red tape and regulation will you have to abide by? What insurance will you need?
• The market – who are your customers and how will you reach them? How big is the market you are targeting?
• Strengths, weaknesses, opportunities and threats – in what ways is your catering business better than the competition? In what way are you disadvantaged compared to the competition? Are there any threats to the success of your catering business?
• The competition – search around your local area for rival catering businesses, as well as indirect competition such as restaurants or cafes. What are their strengths, weaknesses and differences and what can you do better?
• Start-up costs and sales forecast – outline all the expected costs of purchasing food and equipment, premises or a van, bills, insurance, staff wages, website development and any other costs incurred in setting up your catering business
The process of researching and writing your business plan is a great way to establish the feasibility of your catering business and gain a realistic idea of the major costs you’ll need to budget and raise funding for.
Your catering business plan will also act as a valuable document in proving the viability of your business to investors.
4. Work out what catering licenses you need
Any business that involves serving food to the general public brings with it certain risks. The potential for contamination and illness, or serving people with allergies is great; therefore you need the proper licenses to show you’re a legitimate vendor.
Food business registration/ approval
Any business carrying out ‘food operations’ must be registered. This includes:
• Selling food
• Cooking food
• Storing or handling food
• Preparing food
• Distributing food
Every premises where you carry out any one of the above activities must be registered, whether it’s your home, or even mobile/ temporary premises such as stalls or a van.
If you make, prepare or handle any meat or dairy products – unless it is for direct sale to consumers – you must have your premises approved by the council before you undertake any activity.
Food safety and hygiene regulations
As an ongoing part of your role, you will be responsible for ensuring that your catering company complies with food safety and hygiene regulations. Failure to do so could result in a financial penalty or even a prison sentence.
Your local council can inspect your premises, food, records and procedures at any time (and you won’t be given advance warning).
Your responsibilities include:
• Making sure food is safe to eat
• Not adding, removing or treating food in a way that makes it harmful to eat
• Not misleading people about what food contains
• Keeping records on the origin of your food
• Displaying your food hygiene rating (if selling direct to the public)
Rules governing any business that prepares food include:
The business premises: Should be clean and in good repair, with adequate drinking water, pest control, lighting, ventilation, lavatory, hand washing and drainage facilities.
The room in which food is prepared: Should have surfaces that are easy to clean and disinfect (including wall, floor and tabletop surfaces) and should have adequate facilities for washing food and equipment, storing food and removing waste.
The food handlers: Should wear clean clothes and observe good personal hygiene. They should not smoke when preparing food and should be trained in all areas of food hygiene.
Equipment, containers and vehicles used to transport food: Should be designed so that they can be easily cleaned and kept in good state of hygiene. Vans will often need to be refrigerated if transporting cooked food.
Food storage: Food and food waste should be immediately cleared from surfaces and stored in a closed-lid container. Temperature controls apply to dairy products, cooked products and prepared ready-to-eat uncooked food. Although there is some flexibility, these foods will generally have to be stored at below 8°C, so many caterers have to use refrigerated vehicles.
All businesses are responsible for their own fire safety and you could face a fine or go to prison if you don’t follow regulation. With an abundance of open flames in closed spaces, catering kitchens come with obvious risks. You can arrange for a fire and rescue authority to come and inspect your property and suggest any important changes that need to be made to ensure you are compliant.
5. Get catering insurance
Caterers need to protect themselves against a variety of scenarios with adequate catering insurance policies. You’ll be operating in unfamiliar venues, renting equipment and working with new staff all the time.
Failure to do so could in you taking a major financial hit and even lead to forced closure.
Catering van insurance
If you operate a mobile catering business then it’s essential that you take out catering van insurance or catering trailer insurance.
There are a variety of policies you could take out depending on the nature of your business.
Your policy should cover you against any likely scenario including theft and loss, damage, and fire damage (exposed flames inside vans comes with an obvious risk).
Other catering insurance
You should also think about investing in some or all of the following additional policies:
• Business interruption insurance – this will cover you for loss of profits in the event that the normal operations of your business are interrupted by accident or disaster
• Stock insurance – catering businesses rely on having food stock that’s vulnerable to damage or loss. Stock insurance will protect you against the financial cost of that eventuality
• Business contents insurance – this covers loss or damage to equipment and furnishings. Your equipment is vital to the daily running of your business and a lot of it can set you back a fair bit. Therefor it’s important to cover your protected financially
6. Get catering equipment
Starting a catering business requires a lot of catering equipment.
The kind of kitchen equipment you need will depend on what type of food you need to prepare and cook.
For a basic catering operation, you’ll need refrigerators to keep supplies fresh, cooking equipment (including an oven, hob, fryer, and maybe a grill) and food preparation equipment.
Many catering establishments actually don’t have a as they’re expensive to run and can take a long time. A simple sink set-up and a willing washer allows you to wash up any needed utensils or crockery whenever it’s needed.
Be sensible when deciding what catering equipment you need. Don’t get overexcited and buy everything but don’t cut costs and find yourself underprepared. This is why it’s good to detail all the equipment you might need in your business plan.
You also might need different equipment for different events. Some may require you to have crockery and cutlery, others may provide their own.
Once you’ve got your large equipment sorted for cooking and storage, you need to buy all those essential catering utensils for food preparation.
Below is a list of the utensils that even the most stripped back catering operations should own:
• Knives – get a variety of knives for different tasks
• Tongs/ Spatulas/ Serving spoons – for manual handling of different kinds of foods
• Sauce dispensers – a variety for sauces and the delicate dispensing of dishes onto carefully arranged dishes
• Scissors snipping through baking parchment, meat, packages and all sorts of things • Chopping boards – It’s so important to have a variety of chopping boards in different colours to avoid cross contamination
• Colanders for draining all those boiled vegetables
• Peelers/ graters for peeling root vegetables and zesting rinds onto dishes
• Scales – exact measurements are crucial for some recipes
• Mixing bowls – a variety of different sizes is essential when cooking for large numbers of people
• Timers – good cooking is all about good timing. A timer is a chef’s best friend
• Thermometers – it’s important that meat is cooked to the correct temperature so you don’t make anyone ill
• Can openers – get a fixed, table-top can opener if you want to open large cans in a hurry
The above is not an exhaustive list. Depending on the particular needs of your catering business you may need to invest in other specialist equipment. But it’s a good start for all your basic prep, cooking, and serving needs.
Other supplies – consumables
You’ll need to keep your eyes on those essential items that run out, otherwise known as consumables. You’ll be surprised how much it can derail an operation if you forget to keep stocks up.
Here are a few of the essentials:
• Blue roll – this affordable but absorbent kitchen staple is a lifesaver when it comes to spillages and cleaning.
• Vinyl gloves – disposable vinyl gloves are another essential to ensure kitchen hygiene. Cheap and disposable, they can be used for food preparation
• Baking parchment/ foil – for lining oven trays to prevent sticking and save on cleaning
• Clingfilm – essential for keeping food fresh and from pungent aromas infecting other food
• Cleaning spray – an anti-bacterial spray will keep your surfaces clean and prevent
• Washing up liquid and sponges – trust us – you’re going to be doing a lot of washing up
Second hand catering equipment
Rather than splash out on loads of new and exciting equipment, you could instead invest in some perfectly serviceable second-hand catering equipment.
Then, when you start to make a bit more money you could invest in something better. However, don’t buy shoddy equipment that’s likely to break down and end up costing you more in the long run. You can extend the life of your used catering equipment with regular cleaning and maintenance.
7. Register your catering company
Now you’ve identified your niche, decided how to operate, cooked up a catering business plan, got your licenses and insurance, and bought your equipment, it’s time to register your catering business. First, you’ll need to come up with a creative and distinctive catering company name
Catering company names
Food service company names should embody what the values of a catering business are.
Think about what image you want to convey to the consumer and how they might find you online. If your catering business is targeted at weddings or another kind of specialty event, then reflect that in your name. If you’re serving a niche kind of food, include a relevant word in your name.
Using the word catering can also help for online search purposes.
Whatever it is, it should convey:
8. How to market catering companies
As mentioned earlier, the catering industry is a big business. That means there are a lot of players in the market and you’re going to have to work hard to make a name for yourself.
Win customers with sampling sessions
Whether you land a spot at a farmers’ market, give away free samples on the street or get a stall at a bridal fair, allowing the public to sample your food is a great way of giving consumers a taste and showing the friendly face of your business. As long as your food is delicious and you make sure they have your contact details, you’ll be forefront of their mind next time they need someone to cater an event.
Catering exhibitionsThere’s a plethora of catering and hospitality exhibitions up and down the NIGERIA, giving you the chance to meet fellow , suppliers, equipment manufacturers and consumers. Network and make connections and get your name out there.
If you’ve spent some time thinking about a good concept, a compelling offering and a great name then you should have no problem developing really strong branding. Make sure it reflects what your brand is all about and is consistent across all your marketing.
Get your name in an online catering directory. There are plenty of local and NIGERIA-wide options online. This will help people discover you on search engines.
Mobile catering marketing
For mobile catering, your best canvas is your catering van or trailer. Have a bright, vibrant and eye-catching van, emblazoned with your contact details and you’ll essentially have a roaming billboard.
Getting good catering food photographs
Nowadays nearly everyone is an amateur food photographer, getting trigger happy with their smartphones at restaurants. But food photography is actually a very in-demand art form.
The truth is it takes skill to make food look appetizing in a photo. The best way to ensure tantalizing food snaps is to get a professional to take them but if you don’t, here are some tips:
• Good, natural lighting is a must to make sure food looks enticing
• Take the photo as quickly as possible if you want it to look fresh and vibrant
• Create pleasing arrangements of food to make it look pretty and appetizing
• Think about composition and background
Click here to get the complete guide on the above business plan Click Here
Uses of this Business Plan (PDF and Word)
This business plan can be used for many purposes including:
• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your business
• As a business proposal
• Assessing profitability of the business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation
Contents of this Business Plan (PDF and Word)
This business plan include:
• Marketing Strategy
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Industry Analysis
• Market Analysis
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in this business fail, so that you can avoid their mistakes
• Ways to raise capital to start your business