Running a catering business has many rewards and while it can be a profitable business, there’s a lot entailed. I’m going to tell you how YOU can have a profitable catering business because guess what? It’s not all about the food.
Let’s start with the most profitable catering event I’ve ever done. I catered a private family dinner for 6 people and I made $500.00. That’s $83.00 a head. And it was a pasta theme! So can catering be a profitable business, YES! Was this particular catering job labor intensive and extensive in effort, NO!
Catering can be extremely versatile. Depending on what your client is looking for and what you’re willing to provide service and food wise, it can look and feel completely different from one catering event to the other. Personally, I like to cater to my client’s needs. I’m pretty flexible in my offerings and it looks different every time. Examples:
- I’ve done private intimate family catering events that included a five course meal.
- I’ve done catering events for 300 people at a seminar where I served soup and sandwiches.
- I’m in the process of discussing a catering event RIGHT NOW for a local realtor event where they just want appetizers served.
So it can look different every time! But not every caterer wants to be that flexible in their offerings. And guess what…that’s ok! You have to figure out what works and what doesn’t work in your catering business. Let me ask…have you figured out your business strategy for your catering business? What’s your plan for becoming a profitable caterer? A memorable business name? Don’t stress if you don’t have that plan in place yet. That’s what this article is for…to help guide you with some real life experiences from myself and one of my catering friends who has been running her own catering business for 15 years.
Side Gig or Full Time Business?
Is your catering business going to be a side gig or an all in full time business? For me, it’s a side gig. For my catering friend Debbie, it was a side gig that she wishes she would have gone all in on from the start. There’s pros and cons to both. Let me tell you how Debbie got started with catering. And then I’ll tell you how I got started.
Debbie and her husband have owned their catering business for 15 years. It’s called Cotton Jack’s Catering. They no longer have a website and they’ve built their catering business by word of mouth. Every year, they cooked food for their annual family gatherings. They owned an industrial size smoker and they would smoke chicken and pork and make all the sides to go along with the meats. Their family RAVED about their food. A family member made a comment in passing…”you guys should start your own catering business”. And that planted the seed. They got their business license and set up their LLC and got started. And they’ve been catering part time for 15 years while they worked their full time day jobs.
I also got started by word of mouth. People at my church knew I owned a food blogging website and they’d tasted my food at potlucks. I also provide meals for the sick and shut in through our church. Every time I provided a meal, I’d get feedback that my food was amazing. They’d always ask for the recipe and I’d send them to my website over at Recipes Worth Repeating.
One day, the pastor’s wife approached me and asked if I’d be interested in catering a seminar. I told her yes without hesitation. And then I got really anxious because I’d never done anything like that before. She told me it would only be for about 60 people…but it turned out to be 300 people! Yeah – my first official catering job was for 300 people! But it turned out AMAZING! So for me, I cater part time and that works really well for my business model.
So what’s it going to be for you? A side gig or a full time catering business?
Word Of Mouth
You need to know what your marketing strategy will look like so your catering business can be profitable. So this word of mouth thing…that’s how Debbie and I both got started and that’s how we’ve both built up our catering businesses. And let me tell you, word of mouth marketing is POWERFUL.
When Debbie first started their catering business, they launched a website. They also marketed their catering business in a local magazine. But every catering event they booked was from word of mouth. They know because they asked people how they heard about their catering services and it was always from word of mouth. So they shut down their website and they stopped spending money on ads that didn’t being them any business.
They got creative in their word of mouth marketing strategy. Debbie and her husband had a BBQ sauce product. They decided to approach big name grocery stores and asked if they could set up and give out samples. While they demonstrated their product, they also told everyone about their catering services. While they did sell bottles of their BBQ sauce, they also booked catering events. And some of those booked catering events became repeat customers. Eventually they stopped selling their BBQ sauce because it was costing too much money to make. When they crunched the numbers, they were far more profitable from their catering bookings than they were from selling their BBQ sauce! But they didn’t stop there. Because they had an extensive knowledge base on grills and grilling, they kept working their relationships and they partnered with the stores to help promote their grills and telling people about their catering services. And they continued to book catering events! That’s the power of word of mouth marketing. That’s how they started booking profitable catering events.
Have you decided on your catering menu and service offerings? Are you going to only cater very specific events or are you going to open it up to be flexible and broad? What’s your style and creativity going to entail? You need a game plan so you can set your catering business up to be profitable.
Let me give you an example of what I mean. Let’s go back to Debbie. Debbie opted to go with the flexible catering offerings approach. Debbie knew she’d get the biggest bang for her buck by spending her time networking and using word of mouth marketing. She was extremely smart and strategic on how she spent her time. And her time was worth something. Based on past experiences, she knew she could make more money through her networking skills rather than paying for an ad or trying to market a website. And this strategy made her catering business profitable. Here’s one strategy she put in place that led to big catering profits.
A Different Approach
Debbie walked into a local taco shop and ordered some food and asked to talk to the manager. The manager ended up being the owner and they had a discussion about catering. Turns out the owner had been toying with the idea of offering catering services but didn’t think he had the staff or the extra time to make it happen. Debbie saw this as an opportunity and started talking to him about her catering business. And from there, they partnered. The taco shop started offering catering services. Let’s think about that marketing strategy, style and creativity for a minute and break it down:
- The taco shop had at least 100 customers coming in and out of the restaurant each day.
- The taco shop placed a “We Cater” sign near the doors. They also printed catering offering brochures and placed them right next to the checkout counter.
- While people were in line to pay, their eyes notice the catering brochure. They take a brochure with them.
- The taco shop started booking catering events.
Debbie and the taco shop owner had worked it out to where Debbie would make the rice, beans and toppings while the taco shop owner would provide the meat, chips, salsa and guacamole. And that catering joint venture has been running strong and profitable for 10 years now. All because Debbie decided to use word of mouth marketing and think outside the box. And that my friends, is an example of how word of mouth marketing can turn into a profitable catering business!
Profitable Pricing Structure – What To Charge
There are SO many different things that go into establishing a pricing structure when it comes to catering. I touched on this back in my previous article on How I Started A Legit Catering Business Out Of My House but let’s elaborate a bit more here. Some businesses triple the cost while some mark it up to 150 to 200 percent higher than the bottom line cost. I mean think about it…you may have to hire staff, your time is definately not free and you have to buy and make all the food! Plus, it depends on what you are serving. If you are serving steak…it’s going to be a higher cost than if you are serving pasta.
Here’s some options for you to consider around establishing a pricing structure:
- Assign a fixed price,
- Provide a tiered pricing structure,
- Create a custom based price on a case-by-case basis
This is YOUR business and that’s the beauty about owning your own business…you get to make the rules! But let’s be smart about it because again the goal is to become profitable. We are not working for free! Debbie took the approach of calling her competitors and asking what their pricing structure was based on different venues. She called around and got bids for wedding caterers, places that catered Mexican food and places that catered BBQ. She did the research and ensured she set herself up to be competitive. For Debbie’s catering business, she adjusts her prices on a case-by-case basis. And that’s what I do too when I cater. If I cater a Mexican food theme for your event, it may look very different for a job I cater for someone else who also wants Mexican themed food.
I can give you some of Debbie’s pricing examples to paint you a picture of what her pricing structure looks like based on past jobs:
- Menu Example 1: Family Picnic – pulled pork, shredded chicken sandwich with bun, BBQ Beans, Macaroni salad and coleslaw, paper plates, plastic utensils and an option of 2 different types of non-alcoholic beverage – $14 a head.
- Menu Example 2: Wedding – Tri tip beef, grilled chicken, red garlic mashed potatoes, green beans, corn, rolls, water and tea – $24.99 a head. And that’s WITHOUT providing tables, chairs, centerpieces, etc. That’s food only.
- Menu Example 3: Mexican Venue Described Above – Beef and chicken, rice, beans, tortillas, lettuce, salsa, chips, guacamole, option of 2 different types of non-alcoholic beverage – ranges between $16-25 a head. Again…depends if they have to set up tables, provide utensils and plates, etc.
For Debbie, the pricing just depends on what the catering event entails.
Tips and Tricks
I always go back to this statement…catering can be extremely versatile. It doesn’t have to be but it absolutely can be. You have to decide what you want your catering business to look like. Is it going to be more of a structured menu with fixed pricing or are you going to switch it up and make it flexible and versatile? There’s no right or wrong answer but you have to be smart about establishing your catering business to ensure it’s in a position to where it can become profitable. Here’s some tips and tricks I want you to remember and keep in the back of your mind as you are establishing or adjusting your catering business structure:
- Pros and Cons – Break it down and make a list of the pros and cons of catering as a side business or a full time business.
- Think Outside The Box – Get creative in how you are going to market your catering business! Make sure the way you are marketing your catering business gives you the best ROI (return on investment).
- Catering Offerings – Shop around and see what your competitors are doing. Position yourself to be competitive so you can have a profitable catering business. What can you offer that your competitors aren’t offering?
- Menu and Pricing – Again, shop around! Be smart and strategic in how you design your menu, offerings and pricing. But at the same time don’t sell yourself short! You have to factor in ingredients, your time, materials such as plates and utensils, tables, chairs, etc. Be fair, but at the same time make sure you are putting yourself in a position to where you can have a profitable catering business.
Most Profitable Catering Events
As I mentioned earlier, my most profitable catering event was for a private family dinner for 6 people. I made $500.00 in 3 hours. But let me tell you why that event was so profitable:
- Setup – It was a very special and intimate event for the family. I styled the dining room table and used my own china for serving.
- Customer Service – I worked with the customer and asked if there was anything special we could incorporate into the experience. They had their great great grandmother’s pure silver silverware set. We pulled it out, I polished it and made it a part of their place settings.
- Service – I personally served their dinner. I brought all plates in and all plates out. Not one of them had to lift a finger. I did it all.
- Menu – While it sounds basic, I served a homemade Italian based appetizer, dinner, salad and dessert. Everything was homemade and tasted better than anything you could find at a restaurant (their words, not mine).
- Clean Up – I washed all the dishes, and completely cleaned up their dining room and kitchen after the event was over.
So that’s how I made $500.00 in about 3 hours. It was a profitable catering event, not only because of the money I made but because of the experience. Out of all my catering jobs, I’ll never forget that one. It was personal, emotional and special. And to me…that’s why my catering business is so profitable. My catering business brings quality and uniqueness. I absolutely think outside the box. And I guarantee YOU can have a profitable catering business if you do the same.
Was this post helpful? If so I want to hear from you!! Leave me a comment and tell me about your most profitable catering experience! Or ask me questions you may have! I’d love to share my experiences to help you be successful in your catering ventures!