Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their catering businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a catering business plan template step-by-step so you can create your plan today.
What Is a Business Plan?
A business plan provides a snapshot of your catering company as it stands today, and lays out your growth plan for the next five years. It explains your business’ goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a catering business or grow your existing catering business you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your catering company in order to improve your chances of success. Your catering business plan is a living document that should be updated annually as your company grows and changes.
Source of Funding for a Catering Business
With regards to funding, the main sources of funding for a catering business are savings and/or credit cards of the business owner, bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a catering business or cafe is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan. Venture capitalists will not fund a catering business. They might consider funding a catering company with multiple locations or a massive footprint, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual or small location could never achieve such results.
Catering Business Plan Template
Your plan should include 10 sections as follows:
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of catering business you are operating and the status; for example, are you a startup or do you already have an operating catering business.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the catering industry. Discuss the type of catering business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
In your company analysis, you will detail the type of catering business you are operating.
For example, you might operate one of the following types:
- Wedding Catering: This is the most popular type of catering service. The menu offered will include a wide range of foods and various cuisines, along with drinks.
- Corporate Catering: Whether it’s for staff training sessions, office meetings or large corporate events, corporate catering services are always in demand.
- Social Event Catering: this type of catering company handles multiple event types such as retirement parties, backyard barbecues and birthdays.
- Concession Catering: Concession catering handles major public events, sporting events and seasonal events.
In this section of your plan, detail the type of catering business you operate which may be one of the above, a combination of them or something new. Also, in the Company Analysis section of your business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include sales goals you’ve reached, contracts secured, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
In your industry analysis of your catering services business plan, you need to provide an overview of the catering business.
While this may seem unnecessary, it serves multiple purposes.
First, researching the catering business industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards low calorie catering options, it would be helpful to ensure your plan calls for plenty of healthy, low calorie offerings.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your catering business plan:
- How big is the catering business (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your catering business. You can extrapolate such as figure by assessing the size of the market in the entire country and then applying that figure to your local population.
The customer analysis section of your catering business plan must detail the customers you serve and/or expect to serve.
Catering companies generally serve two general categories of customers:
- Business to Business Catering: such catering serves business customers such as event planners, office managers, administrators, sales professionals, etc. This type of customer usually places orders for regular events such as training events, meetings, business events, staff meetings, presentations, company events, etc.
- Consumer Catering: such catering services are provided to consumers for special occasions such as birthday parties, funerals, weddings, etc.
The following are examples of customer segments for consumer catering: college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, etc.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of catering business you operate. Clearly baby boomers would want a different atmosphere, pricing and product options, and would respond to different marketing promotions than teens.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most catering businesses primarily serve customers living around the same city or town where they are located, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
Your competitive analysis should identify your indirect and direct competitors and then focus on the latter.
Direct competitors are other catering businesses.
Indirect competitors are other options that customers have to purchase from you that aren’t direct competitors. This includes restaurants, delis, supermarkets and customers preparing food for events themselves at home. You need to mention such competition to show you understand that not everyone who caters and event uses a catering business.
With regards to direct competition, you want to detail the other catering business with which you compete. Most likely, your direct competitors will be catering business located in your same geographic location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What products do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to call and speak with customers you know have used your competition regarding what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you provide unique food items and/or cuisines?
- Will you provide catering items that your competitors don’t offer (e.g., ice statues)?
- Will you make it easier or faster for customers to purchase your services?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a catering business plan, your marketing planning should include the following:
Product: in the product section you should reiterate the type of catering business that you documented in your Company Analysis. Then, detail the specific food items you will be offering.
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the menu items you offer and their prices. Since these items might vary from client to client, include your core items in your plan.
Place: Place refers to the location of your catering business. Document your location and mention how the location will impact your success. For example, is your catering business located next to a heavily populated office building, or gym, etc. Discuss how your location might provide a steady stream of customers.
Promotions: the final part of your catering business marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local bloggers and websites
- Flyers given to office managers at local businesses
- Partnerships with local organizations
- Local radio advertising
- Maintaining a community presence by joining local charity organizations and networking groups. This could give you a huge competitive edge and help spread the word about your business.
- Banner ads at local venues
- Blogging and social media marketing
- Email marketing
Finally, in your marketing plan, talk about your brand and what you would like it to symbolize.
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your catering business such as meeting prospective clients, drawing up contracts, providing catering services (set-up, serving, clean-up, etc.), procuring supplies, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 100th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new location.
To demonstrate your catering business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in the catering business. If so, highlight this experience and expertise. But also highlight any experience you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in the catering business and/or successfully running similar enterprises.
The financial plan for your catering business should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement: an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you serve 5 clients per month or 15? Will sales grow by 2% or 10% per year? And will your average catering bill be $1,000 or $20,000? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets: While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your catering business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement: Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a massive $100,000 catering contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now for supplies, equipment rentals, employee salaries, etc. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a catering business:
- Location build-out including design fees, construction, etc.
- Location operations expenses such as rent and utility bills
- Cost of equipment like stoves, blenders, refrigerators
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your store design blueprint or location lease.
Putting together a business plan for your catering business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the catering business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful catering business.
Importantly, throughout your plan be sure to highlight why you will become a successful catering company. Typically the reasons behind a successful company are as follows (but create the list as to why you think you will be successful and be sure to add it in your plan):
- Preparing great food
- Offering stellar customer service
- Remaining professional at all times
- Providing competitive prices
- Building long-lasting relationships with customers and industry professionals
- Remaining current and staying abreast of trends in food presentation, tastes and favorites
- Maintaining a strong community presence
- Being unique and not like every other catering business around
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