7 Simple Steps to Grow Your Catering Business

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We all know that the first step in delivering great food to our customers is to ask them “Where would you like this delivered to?. We often then go to Google Maps and look up the address. Sometimes we even do a street view to check on the ease of delivery. Why is it then when we want to move our business from here (today’s sales) – to there (increased sales and profit) we don’t have a road map to show us the way?

In my years in the catering business I had always dreamed of coming up with a simple way to track my sales and expenses and then compare them to a plan for growth & profit. My accounting software would tell me what I did last month and I could compare it to what I did for the same period last year but it wouldn’t tell me how I was progressing toward my future goal.

Then I found Excel! With some help from the incredible teaching resources available on YouTube (type in almost any question about Excel on YouTube and you will find an answer with detailed instructions) I created an Excel Spread Sheet that can act like a road map to your success. Follow these seven easy steps to achieve your sales and profit goals.

1. Define your markets. If your company was like my company, we had a number of different markets with different busy times and slow times. Each market segment had different price points and different costs. While you can just have an overall sales target, it is good to focus and define your market to get better results. Even if you only do wedding catering or own a office catering business, there are differences between types of events. For example if you only do weddings, you could do weddings in venues, weddings in Tents and in home weddings. The weddings in venues may require less equipment but may have higher fees. The tented weddings may require more equipment, the in home weddings may be smaller. The trick is to think about the differences.

2. Come up with goals by using your historical data. How many weddings will you do this year? How many cocktail parties? Are there times of years when your target market is busier? You know your business, you know the ebbs and flows. Plan for them by defining them. You can think of this like a topographical map, what are the hills and valleys on your road to success? How far can your vehicle take you before it needs another tank of gas? How hard or easy is it to find staff? What is the weather like? Make sure your goals are achievable. Plan for success!

3. Create Factors you can use in your projections. Typically how much of the total budget is dedicated to each expense area? Food, Staff, Equipment Rentals, Bar? For example if a wedding for 100 costs $15,000 ($150 pp) and the Price you charge for food per guest is $60 per person then price of food for the guest expressed as a percentage is 40%. This is a helpful tool to have when a customer says I have a budget of “X”. However when doing projections you will need to have one fixed number. In the attached spreadsheet I have used the Food Cost per person as the starting point. I created factors based on the ratio of the Food Revenue to the other revenue. (I have included Factors in the attached spread sheet. I will do another blog post on how to find your own.) The attached spread sheet has different factors for different types of events. For example a wedding that starts at 5 pm and goes to 1 am will have different revenue Factors than a Cocktail Party that starts at 6pm and ends at 8 pm.

4. Know your Costs! Once again using historical data enter your cost percentages. If your food cost is 28% for weddings and 35% for Drop off corporate menus, enter these costs (Column O in the spread sheet). Remember this is not a profit and lost statement, it is a projection. So put in what you want the costs to be based on your market and your ability to sell the product.

5. Map your Route! Using the attached spread sheet enter your information. Once you have entered your Market Segments, enter the number of events you will do in each market segment. The factors you have created will then populate the rest of the spread sheet.

6. Find your Gross Profit. Gross profit is what is left when you subtract the Cost of Production from the Sales. To find out your net profit (before tax and depreciation) Enter your Fixed Costs. Your overhead comes out next. You will end up with a good idea of how your year will be financially.

7. Track your progress. When we plan a trip, we always watch the odometer to see how far we have traveled, we check the road signs to see where we are. Do the same thing with your sales. Once a month enter your actual sales into the spreadsheet. Check out how close you are to meeting projections. Celebrate your successes!

This simple projection spreadsheet will give you the tools to plan your year. If you see that you have 10 weddings in June but none in April, maybe you need to lower your prices in April (have a sale). Maybe you see that you need to offer a special deal in April or maybe you may even find that with the worked booked you have reached your sales target and can take a month off! The idea of a projection of revenue is to give you the knowledge of what is to come to allow you to know if you are on track to achieve your goals. It gives you the control to manage the future!

To receive a copy of the spreadsheet by e-mail, please email andrew@higginseventrentals.com.

Andrew Zimbel, Business Development Manager at Higgins Event Rentals, having owned a catering business for 35 years, managed three major Toronto Venues. His passion is to help his fellow catering business owners become profitable.

By | 2016-12-21T23:01:15+00:00 May 8th, 2015|Blog|Comments Off on 7 Simple Steps to Grow Your Catering Business

About the Author:

Andrew Zimbel is the Business Development Manager at Higgins Event Rentals a Toronto supplier of event solutions for over 35 years. While his goal is to develop Higgins Event Rentals to grow, his method is to help customers grow their businesses thus creating more demand for the services at Higgins Event Rentals.