Running a home catering business can be a lucrative source of income but this may not be possible if you do not know which mistakes to avoid.
Currently there are high rates of unemployment and people are looking into other ways of making some extra cash. In this regard, home based businesses have grown in popularity. Running a home catering business is one of the most common ventures. These are easy to start up and run but people still make a lot of mistakes when running this kind of business.
Mistakes People Make When Running A Home Catering Business
1. Not Doing a Market Survey
Many people running a home catering business simply take the plunge without any prior research. This is a grave mistake and could lead to a non profitable business. Most assume they can make money by simply cooking and selling food. This might work but it could take a while before you start making any major returns.
It is important to find out which foods are popular for most events and what rates they are sold for. This will help you know which menus will rake in more revenue. You also need to go to shops and markets where ingredients are sold and compare prices. Consequently, you will find out the places to get the best ingredients for affordable prices to increase your profit margin.
2. Not Having Enough Experience
There are a couple of home based catering businesses that have gone down simply because the owner did not have prior experience. Being a good cook alone cannot translate in success of a business. There are so many other aspects involved in that you need to know prior to your launch. Consequently, it is advisable to work for another caterer for a while or even go to other events so that you learn from others.
3. Not Keeping Proper Records
People running home catering businesses assume since it is mostly informal they do not need to do any paperwork. Some do everything through word of mouth and do not have any place to check on their past events. This mistake can cost the entire business if the owner is not keen.
It is necessary to always create reports for each event covered. Filing invoices, taxes and receipts will also help the owner track expenditure and income. This can be subjected to an audit and will help discern whether the business is profitable or not.
4. Not Investing In Advertising
In any business, there are always competitors. In order to continue getting clients it is important to market your business and ensure people know about it. However, most people running home catering business ignore this part. This in turn means low number of clients which affects the sustainability of the venture.
Investing in advertising is always a smart move. Even though clients may know you are running a catering business, they might not be aware of what it is you offer exactly. Hence, you need to entice them by showing the unique services and offers you may have. Putting out fliers, sending out emails and even placing ads in the local dailies are great for publicizing the business.
5. Not Leasing Home Catering Equipment
Some home based caterers buy this expensive catering equipment during start up. This is a great mistake especially for small scale businesses since it could take a long time before you recover the costs. You will end up spending most of your earnings paying off for the equipment and not pocketing anything for yourself. It is also a waste since you will not be using it as frequently and therefore, you will not get a return on investment quickly.
Get an Instant Quote on Your Equipment Lease, Free
The best part about running a home catering business is that you do not need expensive equipment constantly. You will only use them when you have an event coming up. This could be only a few days a week or a month. Therefore, there is no need to purchase it when you can lease it for less.
Some of the important supplies you can lease include serving utensils and display stands. Beverage dispensers and fountains are excellent for high profile clients. If you need to transport the food, lease food carriers which keep everything fresh and safe during transit. Other important items include serving carts, food warmers and catering furniture.
You will realize that you only need these supplies and equipment for some jobs and not for others. As a result, leasing allows you to get only what you need and save money on the rest. Get a trustworthy supplier and always inform them of your intention to lease well ahead of time. By avoiding these five common mistakes you can run a great home catering business.
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