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How to start up: A catering company from home

  1. Baking at home
    Kat Haylock

    Kat Haylock Community Editor Staff Member

    Posts: 301 Likes: 130
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    Thinking of entering the food industry? You’re not alone. As UKBF stalwart The Byre pointed out recently, the forum sees two or three threads on the topic every day, many of which come from rank outsiders to the industry. Starting a catering business from home is a low-risk way to test out your product, find your target market and learn the trade.

    Do your market research

    Being a skilled cook or baker doesn’t automatically guarantee your success in the catering industry. Your customers aren’t just choosing your products; they’re choosing the convenience, the affordability and the service that comes with using a caterer. It’s just as important to be able to sell these points as the food itself.

    Consider what type of catering company you want to run. What will be your unique selling point? How will you stand out from your competitors?

    “Researching your target market is massive,” Hayley Jones, founder of Sweet Cheeks Bakehouse says. “People just don’t look into it. Over the years, so many cake makers have come along, but because they didn’t really put any research into actually making money, they’ve gone bust.”

    Contact your friends to find out whether they use catering services and, if so, what they look for in a catering company – why did they choose the service they chose? If you’re hoping to cater corporate events in the future, make use of any business contacts you have and find out what is expected from catered events. How often would they use a catering company and what’s expected in terms of set-up, drinks and staffing?

    Have family, friends and neighbours blind taste test your products wherever possible to help you get an idea of where improvements can be made to flavours or presentation. Alternatively, arrange for a focus group to be set up: this allows you to specify a target audience and ensures any feedback stays impartial.

    To estimate a realistic price point for your product, find your own middle ground between competition-based pricing and cost-based pricing. Researching your local competition will give you an idea of how much customers are prepared to pay for your product, but though this will allow you to undercut their prices, it may not cover your own costs.

    In turn, calculating a price based on the cost of your ingredients and the amount of time it takes you to make your products will give you a steadier financial forecast for your business and ensure you’re not left short of cash, but you may find it harder to tempt customers away from your competitors.

    Meet the legal regulations

    Register your business with your local council at least twenty-eight days before you intend to carry out any food operations and read the FSA management pack to make sure you’ll be complying with hygiene regulations.

    It’s also worth reading the FSA’s guidance notes on food safety, traceability, presentation and withdrawal. If your food is packaged, label up the ingredients properly and ensure that nothing could mislead customers as to the nature, substance or quality of your food. If your food is being supplied without packaging, make sure you’d be able to list the item’s ingredients if asked.

    In order to cook at home, an environmental health officer from your local authority will need to confirm your kitchen meets requirements, and it’s much better to get them in before you begin selling.

    “The environmental health officers were actually extremely helpful,” UKBF’s myfairworld says. “They'll visit your premises and advise on anything you need to do to reach an acceptable standard for preparation of food you propose to sell. Providing you get them in before you start selling, they will be eager to help you.”

    A popular business plan on the forums is to prepare and deliver lunches to offices in the local area. If your catering business involves use of your personal vehicle, you’ll need business car insurance. Business insurance is typically more expensive than the standard rates, so it’s worth factoring the added costs into your plan early.

    Get trained

    A Level 2 Food Hygiene Certificate is a requirement if you’ll be handling open food, but Sweet Cheeks Bakehouse’s Jones also emphasises the importance of business knowledge.

    Before starting up, she found a free business course locally. “The lady there really helped me with what I needed to know about environmental health and insurance. It was quite a difficult process, because unless you’ve gone through catering college, that information isn’t well known.”

    If you’re between the ages of 18-30, you can also check to see if you’re eligible for the Prince’s Trust’s Enterprise Programme. “The Prince’s Trust has training courses and can help you to develop a business plan,” says EthicalPR. “You'll also get to hang out with other young people in similar situations.”

    Establish your company

    If you don’t have marketing skills or knowledge, look at hiring a marketing consultant who understands your marketplace and the clients you want to target, EthicalPR advises. “If you want to offer wedding or corporate catering, the channels and tactics you’d use would be very different from if you catered for exclusive supper parties at home or 21st birthdays.”

    Setting up a stall at a local market is a great way to raise awareness of your product and interact with potential customers. You’ll need to apply for a license from your local council before you start trading; you can find more details here. Not only will running a market stall put a face to your brand, but you’ll be able to gauge demand from different demographics and judge where the strengths and weaknesses of your products are.

    “When we started out we did almost a year on local markets,” UKBF member Mr D says. “It refined our product range considerably and we still sell what we learnt on the markets years later. Rent on a stall for us was £17 a day in one area.”

    It’s worth investing in your online presence: use good photography and a professional website. As the UKBF community points out in this thread, a website that reeks of a shoestring budget is analogous with customers not expecting much from your brand.

    Scott-Copywriter warns that potential customers will make a judgement on your food based on the effort you've put into your site, so avoid grammatical mistakes or anything that could imply a lack of attention to detail on your part.

    He also believes that building partnerships is key in establishing a catering company.

    “Consider other suppliers for popular events. Weddings, for example, often need a cake, dresses, a venue and car suppliers, amongst others. Contact companies like this in your area and offer an advertising swap. If they recommend your company to their clients, you'll recommend their company to your clients.

    “You can even give them flyers, business cards and other promotional material so they have something to hand out if anyone asks if they can recommend a caterer.”

    One last thing

    When I ask Jones for one piece of advice she’d give those starting up a catering company, she emphasises research. “Research public liability insurance and the legalities. Research your target market. Research as much as possible. I see a lot of cake makers setting up and they don’t go through the right channels.

    “It starts off as a hobby and people think it’s going to be a quick buck and they can do it from home, but actually it isn’t like that at all.”

    What advice would you give to anyone thinking of starting up a catering company? Let us know by commenting below!