Create a Business Plan
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A business plan is a blueprint for a successful business start-up. It should be the result of careful study and hard work. Your business plan explains how your catering business will operate, how it will be structured and managed and how it will be financed. If you need money to get started, the business plan is what investors and lenders will look at to make their decision.
Even if you don’t need outside funding, you should put together a business plan. The process of writing one forces you to think through all the aspects of your catering business. Once you’ve finished your plan, you can use it as a guide to your day-to-day operations.
A completed business plan increases the chances that your catering business will succeed.
The SBA has a guide on the web for writing a business plan. Start with Business Plan Basics.
Money and Accounting Issues
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Get paid
You’ll want to start taking credit cards soon after starting your catering business. Usually you need a “merchant account” to take credit cards. The merchant account is provided by a third party-they accept credit cards and deposit the funds into your bank account (after deducting fees for their service). This used to be the sort of thing your bank would do, but with the expansion of e-commerce, there has been a huge growth in the number of credit card processors.
Sitepoint has a good article comparing several “payment gateways,” although the article is really aimed at people conducting web commerce. Another article, “Merchant Accounts 101” can be found here. Talk to your local banker to find out more about merchant accounts. Reading these articles beforehand will arm you with a little knowledge and some new banker-type words to work into your conversation.
If you can’t work out something with your bank or having a full-fledged merchant account is too expensive at the beginning, you could opt for a Paypal for business account. That would enable you to take payments on your website. They’ve also recently added a feature that allows you to bill customers via email. When your customers receive your emailed invoice and pay it, the money is deposited into your Paypal account. Then you can transfer funds into your bank account or withdraw directly from Paypal using a debit card.
Track expenses (and profits!)
It’s essential to keep good accounting records. If you don’t already have one, find an accounting program that works for you. CNET has reviewed several software solutions for small business accounting. Accounting software reviews at PCMag.com is another good place to find software reviews and comparisons.
Keep the IRS happy
The U.S. Internal Revenue Service website offers resources specifically for small businesses and the self-employed.
Another resource you should really consider is the Ultimate Small Business Tax Reduction Guide. The package includes 3 tax-saving ebooks, 13 total bonuses), a 90-day guarantee, and a promise that you’ll save at least $2,000 on your business taxes
Set Up An Office
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You probably don’t need to set up a separate office when you first start out (unless you want to). But you will need to make sure you have some basic office supplies around so that you can look professional.
Stay organized
Get one of those portable file totes to keep client files, permits, copies of regulations, and other essentials that you might need with you. Find a specific location at home to store tax records, warranties for any products you buy, and other things like that.
Planning and keeping track of appointments and dates is central to your catering business. Discover what works best for you. You could keep everything on your computer, use a PDA (personal digital assistant like Palm, Pocket PC, etc), or even a planner/organizer that you actually write in.
A good digital camera will come in handy so you can take pictures of your own work to sell to future clients, and also to help you remember things you like about events you attend.
Stay in touch
Don’t forget to track your business related phone calls. As your business expands, you may consider getting an additional phone line or cell phone account just for your catering business.
The explosion of email, Internet chatting and cell phone usage has not yet displaced the “old-fashioned” fax. The ability to fax documents like proposals, menus, and invoices may be important depending on your particular mix of clients.
Instead of investing in a dedicated fax machine, take a look at eFax. I’ve been using eFax for at least six years and it’s a perfect (and cost effective) way to send and receive faxed documents.
Decide on a Name and Create Your Identity
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The entire process of naming your catering business and creating an identity is known as “branding.” Don’t rush through this important step. One of the core principles of branding is to create uniformity and flow in your logo use, color standards, business stationary and website presence.
Name your catering business
What do you want to call your new catering business? Will you make something up or use your own name? Deciding on a name and creating your identity can be a lot of fun, especially if you enjoy creative activities.
Get a matching domain name
Search for an internet domain name at the same time, so your domain name and website will match your chosen business name. Even if you’re not ready to build a website right away, you’re going to need one sooner or later. More and more people are turning to the web for information, even to find local providers.
Purchase a domain name that’s the same as your chosen business name or at least includes your business name. And don’t be tempted to get anything but a “.com” address. In everyone’s mind, “dotcom” means business and if your domain name ends in “.com”, they’ll know you mean business too.
Get a website for your catering business
If you’re ready to move quickly on setting up a website for your business, you might want to go ahead and find a “web hosting provider”. A web host is a company that provides space on their computers (called “servers”) so your website can be accessed on the Internet.
Many hosting plans offer a free domain name if you sign up for a year. Netfirms is currently offering this benefit. PowWeb is another hosting company that offers free domain names with a new hosting account. I have two of my websites hosted by PowWeb and have been very pleased with their service.
If you can pay a year’s worth of hosting in advance, you should be able to get a more-than-adequate hosting plan for as little as $5 a month. Be wary of anything cheaper, because you don’t want to give up reliability just to get a good price. You want your website to be available when potential clients go looking for it.
Build a successful website for your catering business
I don’t want to spend too much time getting into website building in this guide, but you might want to take a look at the services offered by SiteSell.
Get a logo for your catering business
As you brainstorm ideas for a name, you’ll also want to think of possible logo designs for business cards, letterhead, your website, etc. If you’re the creative type, you may be able to come up with your own ideas. Or you may have a friend who’s into graphics and design.
Branding is an essential part of starting your business
Don’t ever feel like you’re spending too much time on names, logos and branding. The name and design you choose up front will provide identity and continuity in everything you do and use-business stationary and cards, order forms, invoices, promotional brochures, menus and your website.
If your catering business really takes off, you may be branding things like spice mixes, sauces, baked goods and other food items. You could sell these from your website or even give them away as gifts to clients. The point is to keep your name in front of the consumer as much as possible.
Investigate Legal Issues and Permit Requirements
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Depending on where you live, you probably will have to work with several levels of government to be sure that you satisfy all the legal requirements. Local zoning laws may affect where you can do your cooking and how much of your catering business you can actually handle from home. You’ll probably need some sort of permit from the city you live in. It may not be fun and easy getting everything set up legally, but when it’s required you don’t really have a choice.
Starting a business illegally is a bad idea.
State and local taxes
There may be state and local sales taxes to pay. Every state in the U.S. has a website, so you should be able to find this information on the internet. Pay special attention to which goods and services are taxed.
There are links to the business section of every U.S. state official website (as well as the main portal for each state) here.
Health department regulations
Since you’ll be dealing with food and people, you’ll need to find out your local health department regulations. Health department regulations alone may determine whether you can run your catering business completely from your home, or if you’ll need to do some on-site cooking and preparation, or even put together a kitchen somewhere else.
Document everything
As you do your research, learn to document all of your business-related conversations. Later on, when you’re trying to remember exactly who told you what about which form or regulation, you’ll be glad you kept some notes.