When you are thinking about starting your catering business, it’s easy to be put off by the daunting task of organising your finances. But, as any business person knows, this crucial part of your business must be dealt with meticulously, and on a regular, on-going basis. If you don’t have a head for figures, make sure that you have a partner who does or that you can rely on an accountant to deal with the necessary sums. This chapter covers: I’ll try to make this as engaging and informative as possible. Pay attention at the back!

Your Business Plan

Having a business plan is not only important for your bank, it’s also a great way to focus your ideas and work out if what you’re planning really is viable.

The first thing you need to do is work out an initial proposal. In this you will need to include:

• name and location;
• who your customers will be;
• content of the menu and drinks list;
• staffing costs;
• purchase costs;
• rental;
• projected income.

Business plans are, of course, not a guarantee for success but they help to identify the strengths and weaknesses of an idea, and will greatly improve your chances of succeeding. When you have finished your initial proposal, you can build on it to create a more detailed plan. You should include the following information.

Introduction: your catering business’ purpose, your expertise and history and those of your partners, your staff (should you have a chef lined up, for example, if you’re not doing the cooking yourself?), your Unique Selling Point (what is going to make it work and make it different?)

Executive summary: this describes the business in general terms. Make this short and to the point to make it easy for others to follow.

Overview: your mission. What are you looking to achieve? Why do you think it will work? Make this as clear and as short as possible too.

Business environment: market research into your type of catering business, its potential location, problems and possible solutions, the competition and expansion potential (selling at farmers’ markets, for example).

If you are asking for a bank loan make your presentation professional-looking. A messy jumble of ideas randomly put on paper will not improve anyone’s chances of getting to the next stage of discussions. Instead, choose a business-like font, put ideas under headings, check the spelling and present it in a titled folder with perhaps some clear drawings. Make several copies to hand out.

Estimating Your Start-Up Costs

First of all, estimate your start-up costs. These checklists are a guideline.

Your capital costs:

• your business premises (if not run from home);
• the equipment needed to start your business (see Chapter 3);
• your marketing tools (e.g. printing of cards and menus, telephone, mobile, website, computer, printer);
• initial office supplies (e.g. filing cabinet, bookkeeping book);
• basic food and supplies (start-up basic ingredients such as dry goods salt, pepper, flour, rice, pasta);
• required tools (see Chapter 3);
• any legal costs if setting up dedicated premises;
• accountancy costs;
• loan charges if applicable.

Once you have made a list of these items, make a list of the estimated operating costs:

• utility costs (water, electricity, gas);
• insurance coverage;
• business rates (if applicable);
• employee salaries;
• rent (if applicable);
• taxes;
• equipment maintenance (put a sum aside for this).