Secrets To Running A Successful Catering Business
1. Know your industry, do your research.
Most businesses that fail in the first few years are owned by people that don’t truly understand the business they have bought into. The catering and restaurant industry is littered with failures, people that bought in to the romance without releasing its real demands.
If your buying a business get to the bottom of why the business is for sale (not from the seller or their agents). Can you bring something different to the table. Is the business actually viable, is the customer base there and can it be improved. Will it continue to be there.
2. Understand your overheads.
There is more to catering that the cost of the ingredients. For example our utility bills alone are equivalent to 8% of our turnover and eat directly into profit. Do you understand employment law, what would happen if you had an employee off long term sick and you had to pay their SSP. Since 2014 this money isn’t re-claimable.
3. Is self-employment really suitable for you?
I often liken having a business to that of having a new-born child. It what people talk to you about. It’s what you talk about when you get home. It what occupies your mind and it needs your loving care for it to prosper. Does your lifestyle have space for this?
4. Employ the right people
Can they as much as possible be trained to do as many aspects of your business as possible. What would happen if sickness strikes? Could you for instance be landed with 4 shop assistants and no chef.
They need to get along and have a similar work ethic or resentment will build and trouble will follow. There is a good reason why so many companys are “one man bands” and stay that way. People management can be a huge invest of your time.
5. Don’t rush into a partnership
Just because someone is your best friend, long-time co-worker and / or significant other doesn’t qualify them as the perfect candidate for maintaining a business with you. I say “maintaining” because it’s far easier to get excited about the prospect starting a company than being able to handle the day-to-day reality of running it efficiently.
The best partner is typically someone whose skills and approach are the polar opposite of yours. The first ensures the you are able to cover a lot more ground without additional employees. The second may create conflict, but it’ll force you both to defend your business instincts and weed out lesser ideas before you waste time and resources. But you need to be similar in work ethic.
6. Don’t get discouraged
Running a company isn’t a goal – it’s a long, winding road. Enjoy the process! You will have ups, and you will have downs – possibly in the same week or even day. You will gain customer and lose others for reasons fair and unfair. That’s all part of having a business.
I’ve yet to encounter a single business owner who’s reached some grand, stable plateau beyond failure, disappointment and doubt. We all experience it. Instead of discouragement, focus on becoming more resilient, on learning how to handle stress productively.
7. Don’t forget why you wanted to start a business in the first place
Whether it’s following a passion or having more control over your life, always remember why you started down this road in the first place. It’s easy to get carried away and forget what it was you wanted from your own business. At times, sacrifice will be necessary, but it pays to be conscious of when you’re in danger of permanently shelving the very thing you wanted most.
8. Don’t try to do everything yourself
Starting a business is always a financial stretch. So, right away, the tendance is to try and do everything yourself. You will find yourself doing a lot of tasks you never anticipated. Those tasks can come with steep learning curves, and they can take up valuable time and energy – energy that could have been directed at helping the business grow.
Know your limitation and your skill set. Better to outsource or employ the necessary skills. This will help grow your business far quicker than any money-saving attempts, to say, do your own bookkeeping.
So, resist the urge to cover all the ground alone. Saving financial resources is important, but don’t let your task list undermine your big goals.
9. Keep accurate books.
Employ a good book-keeper. Its important to know the status of your business at time. Just because your busy doesn’t mean your making money. Its margin not turnover thats important. Learn what aspects of your business are most profitable so you can push more resources in that direction.
Don’t confuse a healthy bank balance with a healthy company, for instance without the skills of a good book-keeper that money may be spoken for. Keep your eye on cash -flow
10. Don’t stop evolving
Your strategy, your marketing plan, your target market – nothing is set in stone. The world is changing more and more rapidly each day. Your industry will likely experience a shift, whether slight or monumental, at some point. As a small business, you are at a disadvantage, because your resources are a lot more limited. But you have a priceless advantage in ability to change course and adapt far quicker than a larger organization.
The best way to remain relevant is keeping your eyes open for changing tides, your mind open to new ideas and staying flexible. And, of course, don’t be too afraid of making your own mistakes!