Start & Run a Catering Business. George Erdosh

the business for at least six months to a year without relying on what you’re bringing in from events.

      Budgeting skills are also necessary. Once you have a financial cushion, you can’t afford to see it shrink because of poor budgeting. It is definitely a skill you can learn. You know if you already have it. Have you survived so far in your personal life by bringing in more than you spend? If so, chances are, budgeting in your catering business will not be a problem.

      2.5 Dealing with seasonal highs and lows

      Seasonal highs and lows are difficult to deal with in small businesses. The smaller the business, the harder it is hit by a month or two of little income and negative cash flow.

      In your catering business, the seasonal highs and lows will vary with the type of catering you do. If much of your business comes from industrial catering, the holiday season will not affect you very much; it might even reduce volume. But most caterers are in great demand around the holiday season, with up to one-half of their annual gross income earned in two and a half weeks. Caterers who specialize in weddings will be very busy in May, June, July, August, and September — the traditional wedding months. But they will have slumps during the early and late months of the year. Corporate catering is fairly even throughout the year, though it tends to dip somewhat during summer vacation months.

      These are just broad generalizations to give you a concept of what to expect. In reality, the highs and lows are very difficult to predict from year to year, even by caterers who have been in business for a long time. No one knows why. For example, most caterers expect to have slow months in January and February. But the same months could be very busy if corporations decide to expand their employee training and schedule classes right after the holiday season in January. If they want you to cater breakfasts and lunches for their classes, you’ll be swamped with work.

      If you have planned your finances adequately and have a comfortable cash flow, you can also take the seasonal highs and lows without losing your peace of mind. You will simply have to dip into your bank account during lean months, while keeping your faith in the financially solid future. When money pours in all of a sudden, put some back into the savings account for those future lean months. Rely on your good budgeting skills, and invest in one of those pieces of costly equipment you’ve been wanting, but don’t spend all the surplus.

      Seasonal highs and lows are something you can live with, even enjoy, once you expect them. It is nice to be busy again after a period of being in the maintenance and house-cleaning mode, but it is even nicer to anticipate a few weeks of very little to do after a busy schedule. This is one characteristic of catering that distinguishes it from other food service fields.

      2.6 The holiday season: Beyond a rolling boil

      Catering is busiest during the holiday season, when both individuals and corporations are expected to invite guests and employees to lavish and elegant parties. Many, many catering clients are only going to call you once a year, during this time. Your year-round clients expect to have you cater their holiday affairs, too. This is the time when you have to be very careful with scheduling events. You can schedule up to your maximum capacity of your equipment and staff, but no more, no matter how tempting it becomes to bring in even more income. You may have many more requests for catering than you will be able to take.

      The stress and pressures of working at maximum capacity for 16 hours a day for a little over three weeks can be tremendous, emotionally and psychologically. You are in the limelight during your events, sometimes several times a day, after an extremely demanding time in the kitchen. It is not uncommon to start in the middle of the night and end late the next night. Then it starts again a few hours later.

      If you can take the pressure and stress, you will be handsomely rewarded. If you cannot, schedule just a limited number of events, with reduced stress and income. You cannot afford to fail to deliver what you promised to your clients. Doing so will cost you much more than you’ll earn from turning down one more event. Just knowing how much you can comfortably take on for those three weeks will reduce or even eliminate this problem. You’ll learn a lot from your first holiday season, and future ones will be much more under your control.