Probably the dumbest catering question ever but...is there any money in it???

[Bigpappa1]

I can only imagine that question has been asked a thousand time before, but I can't find a real answer. I had considered doing some catering "on the side", when my kids get older. Right now I don't really have time, even though it could help me pay for and justify the smoker I want. Still, though, I wonder: is there any money in it? I know that's a terribly open-ended question, but I just mean what kind of margin can someone reasonably expect? How many people do you need to serve to really make it worth it? For those of you that do it, how many options do you give people, particularly for sides?

[thirdeye]

Business is business. I think part of your answer has to take into consideration the basic business principles. And the most basic starting point is writing a business plan.

There are plenty of sources for information on how to do this, online, books, your public library, State small business agencies, and Federal small business agencies. A lot of your specific business plan will deal the the specifics of your catering business, but it will also include things all businesses must deal with. Try to be as realistic as you can, and take into account all the formal requirements like licencing and insurance for example. If you have to cut corners in order to turn a profit, you would never survive if your business expands.

I took a business class put on by our Small Business Development Center which was underwritten by US West and a couple of banks. This lowered the cost to about $150, and they had 7 or 8 night sessions that were 3 hours long. We learned about a business plan, how financing works, taxes, payroll, unemployment, profit, loss, liability insurance, etc, etc. By the 4th or 5th session, everyone in the class had a draft business plan. They arranged for speakers to come in and give a talk and answer questions. All in all, it was a good learning experience, and I was a business owner/partner for 40 years.

[mtbchip]

Keep the pleasure of cooking alive, don't mix it with a commercial endeavor. Yes there is MONEY in it. YES, money is NOT everything.

[FF931]

I started a year ago legally... “Is their money in it?” Answer is yes. Do you have have the following to get the business is the hard part. We did great this year almost to good if that can be a problem. I have 2 daughters 8 & 4 and I’m a full time firefighter. Most days off I’m cooking and almost every weekend. Money and business are great but my family time has decreased severely.

[Bigpappa1]

Originally Posted by FF931

I started a year ago legally... “Is their money in it?” Answer is yes. Do you have have the following to get the business is the hard part. We did great this year almost to good if that can be a problem. I have 2 daughters 8 & 4 and I’m a full time firefighter. Most days off I’m cooking and almost every weekend. Money and business are great but my family time has decreased severely.

That's kind of what I figured would happen. Both my parents are self-employed, with separate businesses, and I know what it takes and the sacrifices one must make. It's a big commitment. The sales/following part I think I can manage, it's what I do for a living. If I can get our little company into some of the Fortune 500 companies that I have managed to, I bet I could get it done in the catering business, so long as I put the hours in (and had a product worth a crap...kind of an important detail).

Thanks for the feedback, that perspective is really helpful.

[Pedro7]

We've been doing it on the side now for two years legally. Have insurance, kitchen, etc. I also have two young kids (4 and 1). It's a big commit/ask to leave the wife with two little ones by herself on her day off and it is hard to commit a day to BBQ instead of them. We live for the big events and are selfish with our time. Big events/pig roasts/parties we can make good money. Small catering jobs we just bow out of. If I have an open weekend that may have the demand that warrants running the smoker (like this weekend for super bowl, for example), it's worth it more for practice as we'll maybe make only a couple hundred. It's a waste of a day otherwise.

If you want to actually make money you have to go full commit. We basically break even for the year and it funds our hobby for maybe a future business as we build our brand locally. It's paid for our equipment (Meadow Creek TS250 smoker and everything else), but nothing really more than that. With that said, we've been doing favors (doing events at cost, mostly) for a lot of local places to get us exposure to folks in our area. We are now reaping the rewards of those and are starting to book up a lot of weekends this year at full price from those connects and their connects. We are expecting this year to be in the green.

[HBMTN]

Yea there is money in it. I invested $15k to open our business and then I made about $5k and spent it on needed equipment. We then made $2k and grew a little quickly and needed a new refrigerator and better steam table and spent it on those times. Following that, we made some more money and we're still growing and needed more equipment and I took that money we made and spent it on that equipment. Then we had an even better growth spurt and made about $10k. That was about the time I needed a catering van and I spent the money on that. At this point in the game, the business was growing rapidly and we were making even more to the tune of about $30k profit. This was also about the time we outgrew our mobile trailer set up and needed a commercial kitchen. So I decided to build a commercial kitchen and I spent $80k of the $30k I made on a new kitchen (lol). That was four years ago and I've made a little money along the way since but yet again I've outgrown things again and am getting ready to spend some money I've made and buy a $12-$20K smoker.

Now I'm seriously joking about the above. That means I'm serious but joking about it. Yes, I've made money but I've spent a vast majority of it feeding the growing business. I told a restaurant friend of mine that I'd be glad when I had finally bought everything I need so I could make a good profit. He laughed and said, "It doesn't work that way because when you finally buy everything you need then the stuff you bought back, in the beginning, starts to go bad and then you just start buying it all over again!"

Just in case I didn't mention it, it's been worth every penny!

[gtsum]

I think everyone’s definition of “making money” is different and what is needed for your specific lifestyle. IMO there is going to be a whole lot more work and time than there is money/profit. One thing is for certain, it’s a lot of work and can be very rewarding for the right person.


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[HBMTN]

Originally Posted by gtsum

I think everyone’s definition of “making money” is different and what is needed for your specific lifestyle. IMO there is going to be a whole lot more work and time than there is money/profit. One thing is for certain, it’s a lot of work and can be very rewarding for the right person.


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You are very correct and maybe the best way to define "making money" or "is there money in it" should be to look at it from a business point of view. For any business to be profitable, there must be profit left after paying a fair wage for all work done. This means paying yourself an hourly wage or salary for all the work you do. Just the way you would have to do if you owned the business and did not operate it but paid a general manager to do so.

As a business owner, you need to turn a profit or make money simply from owning the business and not just from running it. If the business doesn't make money independent of you being paid a fair wage to run it then all anyone does has done by making the investment is created themselves a job. You can get one of those anywhere with no investment risk.

This should be the goal of anyone starting a business. I hope that in the next 2-5 years I'll have my business to the point where it will function independently of me whether I'm running it and or paying a general manager to run it when I'm not there. Only then have I or anyone created something other than a job.