You want to start your own catering business, but you are still undecided. Between financial independence, the various benefits and the many risks that come with being the one in charge, this article gives you some pointers that could help you succeed in this great adventure. Here are 5 challenges your catering business could face, and solutions that will put a smile on your face.
EVERY BUSINESS HAS ITS CHALLENGES! WHATEVER THE FIELD.
Whatever your business’s field, it will have to face growth challenges. To develop your business, you will need to stay constantly alert, sensing problems before they arise and planning solutions ahead. Essentially, your job will be to recognize and overcome the pitfalls that could block normal growth.
Most of the challenges a young business faces are common to all businesses. The only difference for the survival of the business lies in its manager’s ability to meet them successfully.
THE HOSPITALITY INDUSTRY: A HIGH FAILURE RATE FOR NEW BUSINESSES
New businesses, especially those in hospitality, have a considerable failure rate. And for good reason: hospitality is a highly competitive sector, and its big names, already well established, leave no room for the small fish to settle in (so to speak). On top of that, the hospitality sector is going more and more digital. New businesses must be ready to face ever-accelerating cycles of technological development, now that digital marketing has become a matter of survival for hospitality businesses.
Food service, an integral part of hospitality, is no exception to the rule that “the strongest crush the weakest.” From this point of view, the only solid foundation for a catering business’s success is intensive, dedicated, high-quality work by its staff. What matters most for the new owner is to excel in their field while offering an innovative service that sets them apart from the competition. To get there, we offer forward-thinking solutions here, adapted to the challenges of each type of catering business.
1ST CHALLENGE: THE CHALLENGE OF BUSINESS MANAGEMENT
By definition, business management brings together all the concepts, knowledge, methods and techniques needed to run an organization well while ensuring a high level of performance. More specifically, managing a catering business covers many aspects: human resources management, event management, optimizing operating costs, designing and adopting an aggressive marketing strategy, and supporting customers. The manager must therefore develop all the skills directly or indirectly related to these management aspects.
Another important and essential challenge in running a catering business: a good manager must have a meticulous command of logistics, a key to the harmonious and rapid development of the business.
For example, they must make sure that:
- the customer receives a quality dish at the right temperature on their table;
- the service given to the customer is ideal, at the right time and in the right place;
- the service is provided by professional staff;
- services delivered through last-minute orders are of high quality.
A VERY LONG LEARNING CURVE
Running a catering business requires particularly specialized skills. That is why it pays for the manager to take complete business management training specializing in hospitality. The best bosses of Canada’s largest companies all started at the bottom of the ladder before reaching the top. Here is a non-exhaustive list of the major management challenges the young catering business will face, and for which the manager will need to find the right solutions:
- Management planning;
- Market monitoring;
- Constant attention to cash flow management;
- Openness to change;
- An innovative service offering.
SOLUTIONS TO THE MAJOR MANAGEMENT CHALLENGES
For a new catering business, the challenge of optimal management rests essentially on the quality of its human resources. The development and growth of a catering business are built on the management ability of its manager. You have two options for finding the right person.
The first is to promote the best person in the company: the one with the most experience and proven knowledge of the sector. This choice always pays off, because this person already knows the business well (a real plus) and has a full theoretical and technical command of the food service and catering sector. The business also has much to gain from this promotion: already part of the industry, this person has contacts or has already built a good reputation. That is always good publicity for the brand.
The second option, somewhat more costly, is to recruit someone from outside for the management role. At this level, it is important to make the right choice, because the future of the business will rest in their hands.
2ND CHALLENGE: STAFF TURNOVER
THE LABOUR CHALLENGE
For many years now, Québec restaurant owners have struggled to find a chef, servers or even a dishwasher. Only long-established businesses manage, more or less, to keep their workforce, at the risk of seeing it poached by the competition. For a new catering business, the labour shortage is a real challenge driven by the demographic situation of the province of Québec. Young people aged 15 to 24, who make up 40% of caterers’ workforce, are becoming increasingly scarce. Soon, they will join the ranks of endangered species.
Another crucial challenge for new catering businesses is, of course, how easily employees can change jobs. This situation is fuelled first by the glaring lack of qualified staff in the field, then by employee motivation issues. In other words, the newcomer to the sector must give employees every assurance regarding, for example, pay (better pay) and advancement (as they gain experience).
INVESTING IN HUMAN CAPITAL
The labour challenge is a key issue for the young business’s growth. Solving it means making concessions, especially in a highly competitive environment like the food service and catering sector. Investing in your workforce is the key to getting out of the crisis.
Since motivation and skills are essential components of dedication and quality work, the young business must:
- plan professional training for passionate employees, and convince the others by showing them its value;
- invest in improving employees’ working conditions. A better living and working environment increases employee productivity;
- raise pay for good performance and, where appropriate, award individual performance bonuses;
- involve staff as much as possible in achieving the brand’s business goals.
Restaurant owners would also like to develop an “Employer of choice” certification to identify the best businesses that stand out for how they manage human capital.
3RD CHALLENGE: OPTIMIZING WORKING HOURS.
Working hours are also a real headache for the new catering business.
THE CHALLENGE OF ORGANIZATION
To better see the new business’s growth through, management must anticipate a technical challenge: organization. The food service and catering sector is, above all, the field where mastering event organization matters most. Staying alert for long hours to follow the progress of preparations, making sure the relevant standards are respected, working smart, dealing with far-fetched situations and handling unusual (unruly) customers will be part of the daily life of the young business’s staff. And to manage all the stress these kinds of situations create, staff will need nerves of steel.
PUTTING GOOD PRACTICES IN PLACE
To counter this 3rd challenge, the new business can play the technology card. To do so, the manager must not shy away from criticism by refusing to take risks. Over time, technology remains their best ally. All large companies produce and use information to move forward. Staying informed means knowing the new techniques for setting up venues (events) or for handling the most critical situations in moments of high pressure.
Besides technology, logistics management also stands out as a strength for preventing poor organization. Since the purpose of logistics is customer satisfaction, the business must put this aspect at the forefront of its food service and catering activity. To get there, it is better to take an approach that favours automating known processes, so you can personalize your customer approach.
4TH CHALLENGE: SATISFYING CUSTOMERS
Making a customer happy after providing the service is the hardest and most complicated part. Especially for a new business.
THE CUSTOMER SATISFACTION CHALLENGE: A MATTER OF SURVIVAL FOR THE CATERER
First and foremost, customer satisfaction means offering customers products and services that meet their needs, expectations and standards. More and more businesses, especially in food service and catering, are realizing that customer satisfaction is essential to the lasting development of their activity. This customer satisfaction challenge revolves around a few important points:
- customer dissatisfaction with the quality of the services offered. The economic and financial impact of customer dissatisfaction on the business’s growth is considerable;
- the difficulty of acquiring new customers. A caterer has more trouble finding new customers than keeping existing ones. However, customer satisfaction remains the best way to build their loyalty.
- Continuous improvement of the offering. What is at stake with customer satisfaction is economic: the growth and longevity of the caterer’s service offering.
A DRIVE FOR CONTINUOUS SERVICE IMPROVEMENT
Healthy, dynamic growth for the new catering business depends on its ability to offer quality services at the right time and in the right place. The most relevant improvements are those that serve customer satisfaction, meaning the services offered actually meet all of the customer’s expectations (in quality and quantity). Using metrics to gauge customer satisfaction is also a good approach. It lets you test the waters and, eventually, determine what pleases customers or leaves them dissatisfied.
5TH CHALLENGE: THE ABILITY TO ADAPT TO ANY SITUATION
Complacency and routine are major threats to the growth of a catering business.
THE CHALLENGE OF CONSTANTLY ADAPTING TO ONE-OFF CHANGES
While an event is being organized, last-minute changes can happen. Nothing says that only large businesses can deal with these changes quickly and effectively. They are often variables over which the business has little or no control. For example:
- An increase in the number of people;
- a change of time;
- receiving product B instead of product A;
THE SOLUTION FOR STAYING ORGANIZED AND IN CONTROL.
To stay competitive and maintain a good level of service quality, the caterer must:
- Put efficient processes in place to be ready for anything when organizing an event (make an equipment list, purchase orders…);
- Train teams dedicated to different tasks;
- Give employees responsibility for better follow-up on how tasks are carried out;
- Hold meetings before and after events;
CONCLUSION
Recognizing and overcoming pitfalls and challenges is essential to the development and growth of a catering business. Although the catering world is full of sharks, a new business can definitely carve out a place in the sun if it rises to the challenge with effective solutions, both in managing its human resources and in satisfying its customers.
