# A few questions from a startup caterer



## Southern (Dec 30, 2018)

Hello everyone! 

I am starting my catering company next month. I plan on providing corporate catering to businesses doing lunches and corporate events. I have a limited experience as a caterer though I’ve been working as a restaurant kitchen manager for a few good years (corporate chain restaurants; I want a business of my own!!). I am very result-driven and want to make this venture work! This is going to be my first “big” business. I did my local farmers markets this passed season and it went well. 

I have been trying to learn as much about the industry as I can, and it’s a lot! I have a few questions for those chefs/caterers who have successfully worked in the corporate catering segment. 

What was the most challenging for you when you first started out? 

What kind of advice would you give to a new corporate caterer (maybe an advice that no one gave you when you first started out?)? 

Are there any good sources besides this great forum (books maybe?) where I could learn more about the biz from? Working for another caterer is not my option, unfortunately. 

What are your recommendations for a better menu-building? I don’t have any special software, just a calculator! 

My startup is going to be very lean. I found a rental kitchen. I got an accountant who he put together my S-Corp paperwork which I plan to register in January. I do have a marketing plan. Been in touch with the local Chamber of commerce and a small business admin center (don’t have SCORE around me). I don’t want to quit my current job until I build a client list.. it’s a lot of work hours between my job and my baby business but I am determined to make it happen! 

What else is possibly out there? Sorry that I am asking so many questions at once. Any advice is much appreciated!!!


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## peachcreek (Sep 21, 2001)

Hello Southern and welcome to ChefTalk.
I had a catering business for many years coupled with a sit-down cafe. What I found with my catering business was it helped having someone actively market to our target customers. We made sure to get an appointment with someone who could have some influence, if not the decision makers themselves when possible. We also would market for events months in advance. About now I'd be talking up Super Bowl, Valentines and further out, even summer events. We found most businesses booked Christmas parties no later than August. I also had two ways of handling caterings~ first was pre-planned and anything you want. The other was the pick-up-and-go style that we could accommodate quickly.
I also found that being flexible counts. I had clients who would call me on the fly forgetting they needed lunch for the office that day, can I fit them in? My answer was always YES! Why? That way they were more apt to throw more business my way if they knew I would help them solve problems. I found that approach worked very well. Trust and reliability are very important parts of business catering. Then go represent yourself and your food impeccably!
Good luck with your new business!
Tessa


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## sgsvirgil (Mar 1, 2017)

Its all trial and error and making educated guesses along the way. You go with what works and move away from what doesn't. Accept the fact that you are going to make mistakes from time to time. Be flexible when necessary and uncompromising when needed. Experience will tell you when to be these things.

However, the most important piece of advice that I can give that applies to anyone who is starting their own business in the food industry is this: _do not get impatient and over extend yourself, especially your menu._

Focus on and feature your strengths when it comes to your food. Its always better to offer a few excellent menu items than it is to offer large varieties of average items.

Always draw attention to yourself and your business in a positive way. Make sure your employees embrace this as if it were their own business.

Keep it simple. Simple sells. Try not to over think things. If its not the best quality, don't let it into your kitchen or let it out of your kitchen.

Follow these simple rules and you will do just fine.

Good luck.


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## chefbillyb (Feb 8, 2009)

peachcreek
I also found that being flexible counts. I had clients who would call me on the fly forgetting they needed lunch for the office that day, can I fit them in? My answer was always YES! Why? That way they were more apt to throw more business my way if they knew I would help them solve problems. I found that approach worked very well. Trust and reliability are very important parts of business catering. Then go represent yourself and your food impeccably!

I agree with Peachcreek 1000%. Once your client knows you'll take care of them and their guests you'll be the number 1 caterer to call for future events. If I had a catering I would always give them more than they expected. When you make the event planner happy that will also make her/him shine in the eyes of the corporation. When my client called it wasn't if I could, it was when would you like it............ChefBillyB


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## bluwaterman (Dec 30, 2018)

*However, the most important piece of advice that I can give that applies to anyone who is starting their own business in the food industry is this: do not get impatient and over extend yourself, especially your menu. *

This.... Im a big fan of smaller menus. They allow you to do what you do to an exceptional level, especially starting out. You can grow later if need be


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## sgsvirgil (Mar 1, 2017)

bluwaterman said:


> *However, the most important piece of advice that I can give that applies to anyone who is starting their own business in the food industry is this: do not get impatient and over extend yourself, especially your menu. *
> 
> This.... Im a big fan of smaller menus. They allow you to do what you do to an exceptional level, especially starting out. You can grow later if need be


I think you're gonna do just fine.


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## jimyra (Jun 23, 2015)

Why are you filing a S-corp? This sounds like a way to make your accountant money not you. Do you have a marketing person or an advertiser, there is a big difference?


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## Southern (Dec 30, 2018)

I appreciate everyone’s feedback!! I have already picked up a few great ideas!

I want to offer a set menu for each day of the week to my potential clients. Basically a setmeat-and-three. Salads, soups, beverages and desserts as additional “check boosters”.

I did some research online, talked to a person from my local chamber of commerce and our accountant. All said that S-Corp has better tax benefits vs LLC. I don’t know anything about accounting so I’d rather have a professional do my numbers. I have my S-Corp paperwork ready to be registered with Probate judge, but I am yet to do that. What kind of a business entity do y’all have for your catering business? With an S-Corp I am required to do payroll every month - and that’s obviously something my accountant is gonna make his money on. He’s willing not to charge me a full fee until I get my business on ya feet in a few months.. What are your thoughts? Thanks!


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## Southern (Dec 30, 2018)

About the marketing person. I don’t have an advertiser. My sis in law worked as a marketer for a good while so she’s willing to help me with that part.


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## chefbillyb (Feb 8, 2009)

Southern, Welcome to CT. When I started my Catering business I also had a Food Service Management company. I had the in house cafe and catering for the largest employer in town. I wanted to expand from this to be a bit more known with other businesses in town. I asked the COC if I could offer a free Hors D' oeuvre buffet at their office/Hall during a lunch hour and invite all the business owners that were members of the COC. That gave me a chance for them to see what I could do for them in any and all catering. I also had pictures of my past Buffets along with my menu's on a separate table with my business cards. You can touch base with a lot of people and give them a chance to try your foods and see your Culinary abilities and presentations. This wasn't only for Corp accounts, This was to show further clients what I could do for any future function they may have.........Good Luck......ChefBillyB


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## Southern (Dec 30, 2018)

Thank you, ChefBillyB! 

That’s an awesome idea! So from what I understand, catering business is not the only service that your company offers? What other services do you guys provide? Have you tried to expand into the retail/wholesale segment with any of your products? What business entity did you pick for your company? I start thinking if I’m doing the right move getting ready to register an S-Corp.. maybe I’d benefit from having some other entity better...
Thanks!


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## chefbillyb (Feb 8, 2009)

Southern, my business was pretty good size having three accounts with Vending, Cafeteria and Catering for about 5000 employees. That being said, If I only had a catering company I would try to have a small everyday operation to help put food on my table. It takes time to get established in your community. There are caterer's in your area with a head start and already catering to these corps. What you need to do is get your foot in the door and be better than the last caterer they had. You just can't be "OK" you need to be bragged about. When a party planner for a Corp event changes caterer's they better be right. The change of caterer's are on their backs. You need to show them they made the right choice. 
If I didn't have my other Corp established I would have had a Food truck or some kind of Summer concession contracts to fall back on. I may also look into local Farmers markets to start a small food service and also promote my catering....


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## sgsvirgil (Mar 1, 2017)

Southern said:


> I appreciate everyone's feedback!! I have already picked up a few great ideas!
> 
> I want to offer a set menu for each day of the week to my potential clients. Basically a setmeat-and-three. Salads, soups, beverages and desserts as additional "check boosters".
> 
> I did some research online, talked to a person from my local chamber of commerce and our accountant. All said that S-Corp has better tax benefits vs LLC. I don't know anything about accounting so I'd rather have a professional do my numbers. I have my S-Corp paperwork ready to be registered with Probate judge, but I am yet to do that. What kind of a business entity do y'all have for your catering business? With an S-Corp I am required to do payroll every month - and that's obviously something my accountant is gonna make his money on. He's willing not to charge me a full fee until I get my business on ya feet in a few months.. What are your thoughts? Thanks!


This all depends on what you pay yourself and whether or not you plan on having any profits left over after you are done paying yourself and your employees.

A small business, especially a food service business, with such small margins is not likely to have any profits left over after you and your employees get paid.

But, here is the kicker. If you are a sole proprietor, you can form an LLC and choose to be taxed as an S-Corp. Your accountant should've explained that to you very clearly. So, you can actually have your cake and eat it too. You have 75 days from when your start your business to select a business entity and your choice of how to be taxed i.e. S-Corp, C-Corp etc. Every year, you have 75 days from January 1 to change your elections.

Here's a quick example of how the taxation differs between an S-Corp and LLC. Remember, as a sole proprietor, you can form an LLC and choose to be taxed as an S-Corp.

If you are an LLC owner taxed as a sole proprietor and you have 50,000 in profits, you will report $50,000 in income and pay Social Security and Medicare tax on that entire $50,000.

However, if you are an LLC owner and you choose to be taxed as an S-Corp and you have determined that a reasonable salary for yourself would be $25,000, the business now has a $25,000 profit that must be reported. Most importantly, you and your business will only pay SS and Medicare tax on that $25,000, not the full $50,000.

An LLC also provides protection for your personal assets in the case your business accrues some sort of legal liability because the LLC is considered a separate entity from its owner(s). This is particularly a good idea if you own assets such as a home, real estate etc.

Good luck.


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## Southern (Dec 30, 2018)

sgsvirgil said:


> This all depends on what you pay yourself and whether or not you plan on having any profits left over after you are done paying yourself and your employees.
> 
> A small business, especially a food service business, with such small margins is not likely to have any profits left over after you and your employees get paid.
> 
> ...


Don't laugh, but no, my accountant didn't go that deep into explaining why I should choose LLC over S-Corp or anything else.. he did - successfully - our tax returns so naturally I went to him for his business advice. Hmm so you registered your biz as an LLC, am I right? What happens if you want to sell it? I guess that would be a question to an accountant, and maybe I need to find me another one.. if you know the answer, I'd appreciate it!

I'm thinking business lunches Monday thru Friday, plus try my best to get booked for some corporate events. I'm also thinking about a line of baked goods - in the future - that I could offer to wholesalers/retailers. Farmers markets - I am definitely going to do those this year again. They were good to us last year.

I'm trying to think what else is out there for me, but like I said, this is for the most part new to me. Thanks!


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## sgsvirgil (Mar 1, 2017)

Southern said:


> Don't laugh, but no, my accountant didn't go that deep into explaining why I should choose LLC over S-Corp or anything else.. he did - successfully - our tax returns so naturally I went to him for his business advice. Hmm so you registered your biz as an LLC, am I right? What happens if you want to sell it? I guess that would be a question to an accountant, and maybe I need to find me another one.. if you know the answer, I'd appreciate it!
> 
> I'm thinking business lunches Monday thru Friday, plus try my best to get booked for some corporate events. I'm also thinking about a line of baked goods - in the future - that I could offer to wholesalers/retailers. Farmers markets - I am definitely going to do those this year again. They were good to us last year.
> 
> I'm trying to think what else is out there for me, but like I said, this is for the most part new to me. Thanks!


I was an LLC and depending on the ebb and flow of the business, I chose to be taxed as an S-Corp.

If you sell you business, then, you simply "wind up" the LLC in accordance with the terms of the operating agreement. Otherwise, you sell it just like any other business.

I sold my business to my Executive Chef a couple years ago. It was not a complicated process at all.

I'm not suggesting that you get rid of your accountant. That's for you to decide. What I am suggesting is that you consult with experts to provide you with proper advice, especially when it comes to tax law. I would suggest a good starting point is with a tax attorney.

Good luck.


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