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SMALL BUSINESS | Small Talk: Advice From Small-Business
Experts

Ingredients of a Successful Caterer

July 07, 1999|KAREN E. KLEIN | SPECIAL TO THE TIMES

Q: I'm interested in starting a business doing dinners or cocktail parties in private homes for no more than 25 people. I have a culinary background and the personality to pull this off, but how can I get started? --Laura Pampu, L.A.

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A: Do some thorough test marketing and research before you think about obtaining a business name, license and insurance, all of which you will need.

It's difficult to limit a catering business to events like small dinners because of the intensive labor needs and the small profit margins. You need to demonstrate that there's a demand for this kind of service and that you'd be able to get bookings without an existing showcase for your cooking, such as a restaurant or other retail venue.

Money in catering is typically made with volume. It takes almost as much work to do a dinner for 25 as for 100. Unless this is a labor of love or a side business that doesn't have to generate much profit at first, it may be difficult to pull off. If you start with preparing hors d'oeuvres for larger cocktail parties, have a production kitchen and a way to transport your product, and perhaps an agreement with a bartending service, you could book several parties a night and your economy of scale might be better.

Think about your personnel needs and your role. If you've got the culinary knowledge and the personality, you may want to devote most of your time to selling and meeting with potential clients. Don't spread yourself too thin on the operations side. If you're doing all the cooking yourself, presumably you'd only be able to handle one event a night, which won't generate much income. Design some leeway for yourself, so the business can be parceled out among key people.

You will come up against competition from established caterers and restaurants, so make sure you plan how much you can charge per person and how many events it will take you per month to make a profit.

A few other things: If you cook at your clients' homes, are you prepared to deal with the variations in equipment you will encounter? Do you have supplemental equipment you can bring in and a way to transport it as well as your ingredients? Can you supply things like folding tables, linens, plates and silverware and offer your clients a full package? Can you make an arrangement with a party rental company to get a commission on rentals of such items? And, finally, can you build up enough start-up capital to survive the slow build-up that a business of this kind will probably need?

--Robert Wemischner, certified

executive chef and co-author,

"Gourmet to Go"

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Q: I have an idea for a new kind of paper auto air freshener and am looking for a manufacturer. Would they let me tour their facilities and share information on production processes?--Michael Shoyoye, L.A.

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A: Even if you've got the best idea in the world, you cannot just go to a manufacturer and ask to walk through the plant. Before you approach any manufacturer, have some detailed drawings of exactly what you want to do with your product. Make sure that you have a finished model that will look exactly like your production model.

Break down the various elements of your design in the drawings, then identify the production steps you need and find manufacturers who specialize in those individual processes. You'll need a chemical fragrance compound, for instance, which will probably be manufactured by a cosmetics company. You'll also need a housing and a mounting or hanging component.

Look at the Thomas Register of American Manufacturers (http://www.thomasregister.com) to identify some potential producers of your various components and then approach these companies with your specifications. Most will be glad to give you a quote if you appear professional and can identify exactly what you need. For instance, you'll need to know what fragrance or fragrances you'll be using, how long you want the fragrance to last, and how much your can spend.

Once you've chosen the manufacturers, you'll need to hire an assembler or arrange to assemble the finished product yourself. If you want to market and sell the product yourself, you should have a product description sheet printed up with the specifications of the product and pricing details, and possibly a fragrance strip similar to those used for perfume ads.

--Henry Keck, founder, Keck-

Craig Inc. product engineering

firm, Pasadena

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Q: I am an independent manufacturer's representative supplying plastic sheeting directly to manufacturers of many products, including signs, refrigerators and automotive parts. Is the Internet for me? Where would I find the search engines that find plastic supplies and suppliers? How do I get listed as a supplier so the companies could contact me directly?--Jim Armor, L.A.

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A: In today's market, in which huge revenue-grossing sites exist in niches such as scrap metal, in which companies move thousands of tons of raw material through the Internet, there is no reason you shouldn't be there too.

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