Doing a Competitive Survey
Surveying and analyzing the catering competitors in your area is one of the most important pieces of research you can do. Without knowing what the offerings are, what the prices are, how much to pay servers, and whether to levy a service charge, you won't be able to price your services competitively.
Pick Your Targets
After you have done your preliminary research, you will be familiar with the major caterers in your area. Focus on the most popular and largest caterers first. Then look for specialty caterers.
If you're located in a relatively small area, you'll be able to include almost every caterer in your competitive review. However, if you want to start a catering business in a metropolitan area with a population of more than 100,000, narrow your search and pick representative companies to survey. Choose ten to twelve caterers at the most for your competitive review. Choose caterers who represent the catering market in your area. Choose a couple of very high-end businesses, a couple in the middle of the market, a couple at the lower end, and a couple of specialty caterers.
Begin by studying the Web sites of your fellow caterers. How detailed are they? How many pages do they usually have? What kinds of photos do they have? What do you like about them? What's missing? Can you e-mail the caterer directly from the Web site? Are prices listed, or do you have to call for information? What kind of concept and positioning do they have? Is there something that makes this caterer unique? Looking at the Web sites will give you a better idea of what each caterer is trying to accomplish and how they fit into the local market.
Set up a spreadsheet for yourself so you can compare the data on your potential competition. Make a separate column for each of the following categories:
Type of business (e.g., specialty, on-site, off-site)
Owner or manager's name
Company phone number
Company Web site
Average price per person for a seated/buffet lunch
Average price per person for a seated/buffet dinner
Service charge information
Number of years the company has been in business
Notes on the company's reputation (e.g., friendly service, decadent desserts, creative food stations)
Create a separate “information sheet” for each business in your competitive survey. Call each one and have them prepare a proposal for you. Tell each one you're planning a dinner party for 100 guests. Have a total budget in mind for the entire party and give the same budget to each caterer. Talk with each company, noting who talks with you and how the conversation unfolds. Is it the owner or a sales associate? Is the person professional, friendly, and articulate? What kind of rapport does she establish with you? Pay attention to the questions she asks you. They are your key to determining whether she understands your vision for your dinner party.
Don't feel guilty about asking other caterers for proposals, but be courteous and make sure not to call them during a peak time such as immediately before Thanksgiving or at the height of wedding season. Here are some sample questions to ask:
How long have you been in business?
What kind of facility do you work out of? Do you have your own commercial kitchen or do you share a commercial kitchen with others?
What kind of catering jobs do you specialize in? Do you tend to do more formal dinner parties or catered outdoor picnics — or are you equally comfortable with both?
How long before the event starts do you arrive?
Who are your clients? (Get names and at least two to three references.)
What are your ideas for the dinner party? What can you do with the quoted budget?
Ask caterers for a detailed proposal. You should receive the proposal within a week. If you don't, there's something wrong. Either they're too busy for new business or they don't have their act together. Either way, it's a good sign for you that the local climate could support another caterer.
Evaluate the Proposals
Read each proposal carefully, quickly noting what you like and don't like about each one. What is written well? What is missing? What is confusing or misleading? How was the proposal delivered? How did it look? Is the proposal comprehensive and clear? Are there any surprises? Is dish rental included in the price? Are table linens included? Does the proposal include everything you asked for? If you're unclear about anything, call the caterer back and ask for clarification.
Compare the proposals and examine the following. Record information on your spreadsheet:
What is the per-person charge?
How many entrée choices are there? How many side dishes?
Is the price of staff included? How much does each staff person cost?
How much deposit is needed?
Is a service charge added on to the bill? If so, how much?
What forms of payment are accepted?
What other charges are there, if any?
What type of menu did they provide? Continental? Italian? Ethnic?
How receptive was the caterer to your ideas?
How much creativity is there in the proposal? What suggestions did the caterer provide?
Did the caterer want to see the event space before she sent you a proposal?
What was left out or unclear?
Did you get the sense that the caterer really wants the job?
Ask to see photos of the caterer's jobs online, or meet with him in person. See how each caterer sets up his buffet stations. Does he use chafing dishes, or does each dish come out plated from the kitchen? How much food does he put out? Just enough or plenty for the hungriest of groups?
Once you have all the information from the competition compiled, you'll start to see some patterns. You will notice price ranges. You'll also start to see patterns in the kinds of food that the caterers in your area provide and the types of customers and functions they cater.
Hopefully you'll start to see a niche where your business can fit. Maybe all the caterers offered similar types of food, and there's a need for the type of healthy, fresh cooking you specialize in. Or maybe most of the caterers focused on formal dinner parties, and there's room for you to enter the market specializing in more casual catering for brunches and buffet dinners.