By Jim Rand, catering practice leader.
I don’t need to tell you that your foray into the catering business could be a painful education without a solid foundation. Catering novices tend to make the same costly mistake: vastly underestimating the foundational process. While they may be all too willing to stand on their feet all day and work mad hours, they might neglect to pick out the right customers from the thickets—or slip up in branding. But this preliminary work is important. In fact, the absence of a solid foundation can prove fatal.
In a recent blog post I described the basics of the FEED formula, my method for creating a solid, scalable, and profitable catering business (read more). I touched on four pillars of support required to achieve this. In Part 1 of this two-part article, we’ll focus in on the first pillar, Foundation.
We’ll specifically look at:
In the next installment, Part 2, we’ll look at Restaurant Facilities and Logistics.
To define your target customers, ask these questions:
Your catering menu should sync with your restaurant menu so you don’t waste time or ingredients. Plus, this move will likely draw existing customers to your catering because they already have favorites. This menu alignment makes it convenient for everyone and keeps you centered on your expertise.
Too often at the ezCater office we have amazing food delivered in generic packaging. The only person who knows the name of the restaurant that handled the catering is the person who ordered it. Don’t make that mistake. Leverage your restaurant’s brand by branding all catering materials and equipment. Brand food containers and to-go bags, all “hot” delivery bags and coolers, delivery vehicles, staff uniforms, etc.
If you can’t afford custom-printed product packaging or embroidered uniforms, go to a print shop or office supplies store and have them print stickers with your logo on them. Put those stickers on everything. If your catering plan includes a buffet line, print cards with your logo, the name of the dish, and a brief explanation of its ingredients. It’s great reinforcement of both brand and product.
Omni-channel ordering is good for operators and customers. Technomic reports that nearly half of all catering customers phone in their orders. Over a quarter of those customers order online. Others email and text. Everyone benefits when they can order any way they like. Here are some other ideas for upgrading your technology:
Intelligent phone systems: Having a unique phone number for catering is a great idea. So is interactive voice response (IVR) that prompts customers to select your catering department and hear, “Hello, Gino’s Catering,” rather than, “Hello, Gino’s Restaurant.”
Third-party phone services: Outsourcing phone services and order-taking is a viable option for large, multi-unit restaurant companies.
POS system: If you take phone orders, input them directly into the POS system to reduce mistakes from misunderstood penmanship. Most POS systems offer online ordering integration and back-of-house integration. The latter is key for collecting valuable customer data. If you don’t use a POS, create a printed catering-order sheet that is easy to use. Set up the order form with numbers and checkboxes (easier to read) instead of letters. Also include modifiers (sauce on the side, vegetarian, etc.) for order customization.
CRM: Customer relationship management (CRM) software allows you to keep track of customers. When you create a central database of customer names, addresses, and order history, you can market your catering to those customers, customize promotions based on their expressed preferences, and reward them for loyalty.
Sales tracking and management: Sales management software tracks every aspect of your sales effort. It shows how successfully your team is generating new leads, pitching to them, following up, and closing deals. Having such relevant information at your fingertips allows operators to hold their teams accountable to sales strategies and goals. Chiefly, it shows them who should be compensated for their successes. Such software is far easier to use than tracking sales activities on spreadsheets.
House Accounts: Large catering clients who are regulars often request credit known as a house account, which is billed monthly. Good software tracks those sales appropriately, flags past-due accounts, and prompts salespeople to collect receivables. These tools can help operators to stay on top of finances and are useful for managing cash and avoiding debt from outstanding receivables.
Remember that any endeavor must begin with a solid foundation. A tree won’t grow without its taproot, a team can’t succeed without a proven playbook, and a skyscraper will collapse without deep pilings. Same for your catering business. Using the principles that I’ve just outlined, you’ll launch correctly and bypass unnecessary struggles toward profitability.
Ready for Part 2? Learn how to adjust your restaurant facilities for your catering business.