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A Profitable Feast Want to start a catering company? We've got the secret ingredients.

By Pamela Rohland

Opinions expressed by Entrepreneur contributors are their own.

Catering isn't for sissies, as Jill Albanese, 32-year-oldowner of Catering Works Inc. in Raleigh, North Carolina, haslearned. The pressure to perform--despite setbacks--adds to thecreative tension inherent in the job.

"This can be an unforgiving business," Albanese says."Doing someone's wedding is a one-shot deal. If you messup, it's over."

But even a hurricane that knocked out electricity for milesdidn't stop Albanese from going on with two weddingreceptions.

"We cooked with generators and modified our menu to includegrilled foods instead of baked," recalls the entrepreneur, whoopened her business in 1989, a year after graduating from culinaryschool. "We often have these big dramas, but somehow it alwaysworks out."

A little wizardry and lots of energy are the ingredients for asuccessful catering business, experts say. Limited funds? Not toworry: Catering is a business you can start on a shoestring andgrow faster than you can say souffle.

Many off-premises caterers--those who work independently andaren't employed by the hotel or restaurant industry--investless than $15,000 to start, mostly to rent a school or churchkitchen; get a food preparer's license from the local healthdepartment; and buy or rent equipment, utensils and tableware. As acaterer, you can wait until you land your first client, then buy orrent only what you need for that order to conserve cash.

No matter where you live, you'll find a market for cateringservices. There are about 41,000 off-premises caterers in theUnited States, and the industry is growing by 7 to 10 percentannually, says Michael Roman, president of CaterSource, a Chicagoconsulting and training firm.

Revenues for an off-premises catering business can range from$250,000 to $12 million a year, Roman says, with profits between 9and 28 percent. Ambitious caterers with excellent cooking skillsand business sense can gross up to $400,000 in the first 18months.

Despite high pressure, frequent staff turnover and sometimescapricious client demands, most caterers say they enjoy their work.Often, their love affair with food started early. Albaneseremembers how much she enjoyed baking desserts with her grandmotheras a girl. "In high school, I learned about Martha Stewartbefore anyone else did," Albanese recalls. "Her booksinspired me to become a caterer."

Beyond Appetizers

A knack in the kitchen isn't enough, though. In addition tofood preparation and presentation abilities, you need accounting,negotiating and people skills. The most successful caterers have abackground in food service as chefs or servers. If you don't,it's a good idea to learn the ropes in a restaurant orestablished catering company first.

Formal training at a two-year culinary institute is stronglyrecommended. "One of the biggest challenges caterers face issanitation," says chef John Carlino, 35, an instructor at theFlorida Culinary Institute in West Palm Beach and a formerrestaurateur and caterer. "Without training on how to [preparefood] properly, you can make a lot of people sick." Trainingalso exposes you to a variety of cuisines and preparationstyles.

Before turning on the stove, apply for a state fooddispenser's license, and get the facility where you'll becooking approved by the local board of health. Most beginningcaterers who don't have their own shops rent kitchen space froma school, church or community organization. Selling food preparedin a private residence that isn't up to code can land you injail.

A catering business can be started with bare basics if yoursavings is minimal. Sara Corpening and Mary Barber, 29-year-oldtwins from San Francisco, launched Thymes Two Catering in 1994 witha $10,000 business loan. In 1998, the company--which specializes inclassic, globally inspired cuisine and lists actors Jim Carrey andLauren Holly as clients--will earn $250,000.

Albanese started her business with $14,000 financed throughcredit cards and a bank loan co-signed by her mother. Her company,which offers party planning as well as catering, now earns $2million annually.

Dinner is Served

Since traditional advertising isn't an effective way to findcatering clients, you'll need other, more creative ways to tellpeople what you do. Corpening and Barber kicked off their businesswith a party where several hundred people, including friends andbusiness contacts, sampled their talents. "We got three ordersthat very night, and were off and running," Corpening says.Carlino sent letters to companies telling them he could caterparties or business functions. Albanese publishes a newsletter andhas a web site. You should also get the word out to social hallsand event planners who can make referrals.

As their companies grow, many caterers develop offshoots of thecore business. Albanese and her 34-year-old sister, Lorin Laxton,company vice president, have developed software for caterers, whileCorpening and Barber have written three books, Smoothies: 50Recipes for High-Energy Refreshments, Wraps: Easy Recipesfor Handheld Meals (Chronicle Books, $15.95 and $14.95respectively, 800-722-6657) and Simplify Entertaining(Reader's Digest, $17.95, 800-310-6261).

Despite the challenges, most caterers thrive on the adrenalinerush each day holds. "Even though I've been in businessfor 10 years," Albanese says, "I still get excited aboutgoing to work in the morning."

Market Places

Where can you market your catering business, anyway? Here are afew prime targets:

  • weddings
  • corporate functions (including conventions, business meetingsand training sessions)
  • parties on tour boats, buses or trains
  • beach parties, lobster-bakes, clambakes
  • birthday parties
  • bar or bat mitzvahs
  • golf tournaments, fun runs, charity sporting events
  • corporate jets
  • hotel openings, book signings, barbecues
  • grocery stores and gourmet specialty shops
  • other caterers

Get Cookin'

Ready to get started as a caterer? These resources can help:

  • Consultants: CaterSource, (773) 975-8446 or http://www.catersource.com , can refer you to cookingschools, information sources and potential mentors.
  • Membership organizations: National Association ofCatering Executives, (847) 480-9080; National Caterers Association,(800) NCA-0029.
  • Cooking schools: Peter Kump's New York CookingSchool, (800) 522-4610; Florida Culinary Institute, (800) 826-9986;Scottsdale Culinary Institute, (800) 848-2433.
  • Books and publications: Most caterers rely onconsumer-oriented books and magazines for ideas. Top titles includeMoosewood Restaurant Low-Fat Favorites, by The MoosewoodCollective, Bon Appetit magazine, Food and Winemagazine and Martha Stewart's Living magazine.

Pamela Rohland is a freelance writer whose work appearsregularly in national and regional publications.

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