Business and Finance Tips

Starting a small catering business can be a lot of fun. If you do it right, it can also make you a great deal of money. However, there are a lot of things that need to be done initially before you get carried away. If you don’t follow the right procedures, your whole business could wind up in jeopardy.

The first thing that every small catering business needs is a name and a business license. You will also want to determine how you will form your business entity such as an LLC, sole proprietorship, or corporation.

After that, you’ll want to get a tax ID number from the IRS. Be sure to look into which agencies handle the licensing in your state. You may be able to get some tips from other small business owners, since the process is similar for a lot of business owners.

One area where your small catering business may differ from other businesses is that you will need food service and liquor licenses.
The government takes food service very seriously and monitors the food quality, storage and preparation facility of every business where food service is involved.

Although a liquor license isn’t a requirement for a small catering business, it is a requirement for anyone who serves alcohol. Since most catered events involve alcohol, it would be in your best interest to get a liquor license. In fact, it could mean the difference between having a small catering business that flops and having one that thrives and grows into a large successful enterprise.

It is easy to become excited about the prospect of owning your own business, but remember that even a small catering business involves a lot of work. You may feel that you can juggle many tasks, but sometimes there just aren’t enough hands or enough hours in the day.

If you think about it, it really makes good business sense to hire some extra help, or at least line up some on-call helpers that you can bring in when you’re in a pinch. After all, larger events are going to require a lot more people to make things work efficiently.

Starting any business can be a strain on your wallet, so it will pay to remember this before you even begin. You may need to take out a loan. You can expect it to cost a few thousand dollars to get the right equipment and licensing, and insurance you will need.

Also, consider the costs of advertising and marketing, such as a graphic designer, newspaper or TV ads, or a company website and web master.

All of these things and more need to be considered before you ever try to get a small catering business off the ground.

Everyone who starts a business, even a small home based service business, wants to be successful. With the right attitude, motivation, and a bit of knowledge, you flourish. You can help to grow your small business with these 4 tips.

Tip #1 – You need to understand your customer. This means that you must know what your customer or client expects and be able to deliver what they need on time. This is particularly important if you have a service based business.

Tip #2 – Treat your customer well. This should go without needing mention, but many businesses still don’t adhere to it. If you treat your customer poorly, he or she will quickly stop being a customer. Remember, there are other companies doing the same thing you are, selling similar products or services. You need to be the best in every aspect, including customer service.

Tip #3 – Similar to the above practice of treating the customer with respect, you must also ensure that the customer respects you as well as your employees (if you have any). No one likes to be treated poorly, and if you find a client that is abusive in any manner, you need to consider just how important that client is to your business and drop them if you need to.

Tip #4 Communication is another key to success. Your customer might decide that they need you to make certain changes to a project when you have it partially complete. Go ahead and make the changes, but be certain the client knows the project might take a bit longer to complete.

The above tips can help you have a great relationship with your customers and can truly help your business become a success. A happy client will recommend you to others.

Have you read the papers lately? There’s a recession! Shocking! Of course, most small businesses wouldn’t have known that without our brilliant media telling us as much – ha! In fact, they were able to even tell us when it started – December 2007. Well, now that we finally know what most of us have felt for the past year or so, what do we do about it? We hunker down and position ourselves stronger than ever.

There are a couple of areas that you need to be very smart about when you consider what to cut. Be very careful about your marketing budget and your customer service.

Marketing is a critical lifeblood to your business but it seems that every time the economy goes south, small business owners start looking at advertising and marketing as a variable expense that should be slashed. Think very carefully about that. It might sound simple but if you zig while your competitors zag, you will be in better position not only during the recession (higher visibility) but after the recession (customer loyalty).

That brings us to the other very important area of consideration for your small business during a recession – customer service. Layoffs might be the first instinct for many small businesses but be very careful not to impact your most valuable asset – your loyal customers, who may be adversely affected by layoffs that impact customer service. See above – if we’re eating in to our competitors market share during a recession, we need to have exceptional customer service so those new customers stay with us.

Of course, a recession may be the best time to re-evaluate your Web efforts and strategies. Are there opportunities for you to expand your business through the Web? Can you create a customer loyalty program online and leverage that email file that you haven’t done anything with yet? Get creative. When times are great, we tend to get complacent. When things get tough, we need to get creative.

So, you might be asking “where do I cut?”. The difficult reality is that you may need to accept lower profit margins during a recession while your top line suffers. Be patient. Weather the storm. Harken back to the early days of ‘beans and rice’ when you first started your business. Hopefully, you won’t have to get that dire but accept the fact that you, as the owner, may make a little less this year. Consider it a reinvestment in your business. Don’t be stubborn and think that you ‘deserve’ to make as much as you did last year and therefore you must cut expenses in order to maintain your profit or draw. That is irresponsible and short-sighted.

What if you have shareholders to answer to? Be upfront and vigorously defend your decision to defend marketing, advertising, and customer service budgets. They may suffer as well with smaller profits this year as well – you’ll have to sell them on reinvestment now in the form of lesser profits rather than risk the long-term health of the business by being greedy today. You have to reassure them that things will improve. After all, a recession is cyclical so they will soon get a return on their investment.

If you do have to cut staff, take a close look at activities that you may be able to outsource – or maybe insource to your family. Administrative and bookkeeping tasks might be easier to outsource or have a family member chip in on in the short-term while you tighten the belt. Not ideal, but it’s also not a bad idea to periodically bring family members closer to the business to learn the ropes a bit in case you suffer a short-term disability where they may be called into duty.

Tough times can be lonely for small business owners. This may be your first experience in the weak portion of the business cycle. As a business owner, no one is going to tell you what to do and you are expected to be the one to set the direction. If you have doubts as to what you can do to survive a recession, don’t be afraid to ask other owners what steps they have taken. Sharing this information is beneficial to everyone because no one wants to throw in the towel. Think opportunity instead of challenge.