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3 Benefits of Offering Restaurant Catering Services

3 Benefits of Offering Catering: Buffet catering burger and dessert trayToday’s guest post comes to us from Justin Guinn of Software Advice, a resource for software buyers that features detailed reviews and research on thousands of software applications:

According to the National Restaurant Association’s 2017 Restaurant Outlook, restaurant industry sales will reach nearly $800 billion this year. That’s a lot of cash to go around to the 620,000 restaurant businesses trying to get a piece of the pie—an average of $1.3 million for every restaurant business, to be exact.

While $1.3 million seems like a lot, the top 100 independent restaurants are making between $12 to $48 million annually which drastically drives down the average per restaurant. Obviously industry income isn’t distributed on an average like this, but the point remains the same:

Restaurants need to grow their piece of the pie. If they don’t, somebody else will take it.

An efficient and practical way for restaurants to stretch their bottom line is by offering catering. We’ll explore the three key benefits of taking on catering service:

  1. Capture Additional Revenue Streams
  2. Increase Exposure and Strengthen Brand
  3. Increase Ordering and Optimize Food Costs

Capture Additional Revenue Streams

Moving into the catering business enables your restaurant to capture a new, unique revenue stream. By simply telling patrons about your catering offerings, you can turn a couple of average tickets into large catering contracts. You may even have the opportunity to set up some recurrent jobs, creating a sustainable revenue stream as opposed to one-off catering gigs.

Aside from being another way to make money, catering offers a much easier and more efficient operation than traditional restaurant services. Catering services enable you to know in advance exactly what’s being made and how much of it is needed for the service. By cooking what’s in your contract, you know you’re not taking any surprise losses. And since you’re providing a catering menu for customers to choose from, you can make sure that your items are optimized for great margins and returns.

You’ll want to consider your labor expenses and factor these into any catering contracts. Sit-down, served meal services differ greatly from buffets and serve-yourself services. It might be the case that you exclusively offer non-served catering options to keep costs down and returns high.

Increase Exposure and Strengthen Brand

Along with revenue, stepping into the catering service realm provides greater exposure to your core restaurant brand. This of course can be a positive or a negative, depending on the quality and success of your catering services. But assuming you nail down all the components and offer quality services, you stand to deliver positive, memorable experiences that could drive new customers to your restaurant.

Capitalize on catering exposure by setting up branded materials. These could be signs or posters (keep it classy and appropriate to the catering job at hand), plates and other serving ware, business cards, and even branded uniforms. You essentially just want your guests to know who it is that’s serving them such a delicious meal and dining experience. You can even hand out discount or buy one, get one cards.

If you do get a catering business going and choose to offer discounts for those customers and their guests, you need to track these discounts to determine their value for your business. A restaurant POS system with customer management capabilities is what you’d want to manage such a task. This type of tool will help you track customer interactions and record valuable information. You can also leverage your CRM to keep track of valuable event details and contact information.

Increase Ordering and Optimize Food Costs

One of the understated benefits to restaurant catering is its impact on a restaurant’s bulk food orders. To accommodate catering needs, restaurants increase food order quantities, which can often result in receiving goods at a discounted rate. Even without achieving greater bulk price discounts, a catering business can be a great outlet to sell products that might not be served at the restaurant and thrown out.

In order to get a good snapshot of what these products might be, you’ll need to leverage detailed food/inventory management capabilities. This will help you see where you have surpluses in products. You can then use this information to adjust catering menus to account for these otherwise wasted products.

Most restaurant POS systems on the market today offer some form of inventory management capabilities. Key features of these systems include detailed reporting on the quantity of items in stock as well as the value of your current inventory. Some systems even offer recipe calculators that enable you to calculate the cost of a dish based on the combined price of all the raw ingredients and the number of portions made per batch.

Next Steps

Before jumping in and capitalizing on these restaurant catering benefits, it’s important you make sure your business can take on additional work/services. If you and your employees and your equipment are maxed out, there’s no reason to start catering at this time. You may need to focus on growing and scaling your restaurant until catering actually makes sense for your business.

If catering is a fit and you want to jump in, now is a great time to bolster your technology and adopt some new POS software. We at Software Advice can help you narrow down your POS search and determine the best three to five systems for your business. Groupon also provides a great option to get exposure to your new catering services via special offers. Take advantage of both services to put your restaurant in the best position to prosper from catering.

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Justin Guinn headshot

About the Author:

Justin Guinn is a Market Researcher at Software Advice, covering technology and changing trends in two distinct markets: retail/restaurant point of sale and field service. His work has been cited in dozens of notable publications, including The New York Times, Forbes, The Huffington Post and TIME Magazine. Currently, Justin’s research in the retail and restaurant verticals focuses on navigating the complexities of mobile point of sales, digital payment systems, and the evolving customer experience. You can connect with him on LinkedIn or follow him on Twitter.

Any views, opinions, advice, or endorsements herein are the author’s and are not necessarily the views of Groupon or its partners.

  1. Yes Catering business is beneficial but you need specialization, In restaurant business the customer order according to your menu but in catering you have to serve according to customer’s menu.
    I agree on that aspects that in catering you are saved from any surprise losses.

  2. My friend recently opened up her own restaurant and she was thinking about maybe starting a catering service, but was unsure. I think this article had some great information about what kind of benefits this could provide her, like how it could give her more exposure. Thanks for the great advice, I will definitely show this to my friend!

  3. Great post. This is very efficient and practical way for restaurants to stretch their bottom line is by offering catering.

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