Article

5 keys to building a successful catering platform

Catering is more than another revenue stream; it’s a chance to build an entirely new retail channel for your restaurant.

July 20, 2010

By Erle Dardick

Operators have spent a considerable amount of time and energy building their existing retail clientele. The ones that have been successful at delivering a consistent and predictable experience have most likely nailed down the service, quality and experience equation.

Operators that are experiencing flat sales growth, which happens in a mature environment, must look at new channels for growth. The traditional model of growing a retail food business is typically to duplicate the retail experience in another market. While this might be a good strategy, it is critical to the success of the business that you look at all possibilities of maximizing additional revenue channels out of the existing four walls.

If you are thinking about launching a catering platform, here are five steps to consider.

1. Look at why it’s necessary for your business.

As managers of foodservice operations, we must always look for growth opportunities.

In order to service the organization properly, managers must consider the opportunity to spin off a catering business from the existing assets. By focusing on the catering opportunity, organizations will be offering additional services to existing clientele, as well as gaining new clients that may not have even considered coming into your locations had they not had a positive catering experience.

One beautiful byproduct of succeeding in this revenue channel is that the incremental sales are layered on top of your existing sales. And so, as it adds to the volume of sales -- and volume is a key element in the success of any multi-unit restaurant environment -- it increases the efficiency of your existing assets. Also, it increases the opportunity of your buying power and allows for better turnover of raw material inventory.

This all leads to fresh product going out the door, both in your catering channel and your retail channel. Also, as catering orders are coming in and being executed against, activity within your facility will increase and so too does the energy buzz associated with creating a great all around customer experience for all of your revenue channels.

2. Make the paradigm shift.

Catering in a multi-unit environment is not just an add-on business. Catering is a business unto its own. It has its own specific business logic and requires a separate set of resources from existing operations. The paradigm shift here for operators is typically large.

If you look at your store as a manufacturing facility, it is likely that your plant is underutilized. Your current revenues are geared around specific meal times, and the consumer is driven to your location to fulfill a specific demand.

Catering fills the gaps. The dynamics of the order and the demand driving the orders are completely different from your regular dine-in or take-out orders. To survive and compete in this segment, you will need a completely different set of business subsystems to be successful. These subsystems are a direct result of your organization’s ability to make the paradigm shift that catering is a different business and needs to be resourced as such.

3. Establish your strategy.

Catering should be an effective and profitable way to leverage your existing location, staff and brand. But to do your dine-in, take away business and your catering business well requires understanding of each side of the business. As the managers, you must make sure that you do not ignore one while “dabbling” at the other.

Each organization must establish a proper overall business strategy. As part of that strategy, it must be agreed upon that catering is in fact a business that makes sense for the brand. To make such a decision, the executive team must first understand that catering can have a substantial impact on the bottom line. It just makes sense.

To really establish a strategy for your brand, you must look to your experts. You must first understand your menu as it relates to your catering customers’ experience, all the way through to the impact that execution of your menu will have on operations. You must understand that a catering strategy IS NOT the same as a dine-in or take-out strategy, and as such, your menu can be branded differently, as long as the flavor profile is consistent with the overall brand.

As an organization, you must understand the subtleties that lay beneath the business process as well as the expectations that are in the minds of your customers. You must understand the relationship you have with business to business selling, as opposed to consumer based selling.

You must have a single individual that is ultimately responsible for this business unit, and that person needs to have resources allocated to them to be able to properly promote and execute on the program.

Your executive team must buy into the idea of growing revenue in this channel, and there needs to be a deep commitment to the strategy throughout the whole organization.

4. Implement your strategy.

To implement your catering strategy, you need to make sure that there is a single point of contact for all issues as they relate to the operations of the catering business. One can only assume that if you are implementing a strategy, your organization has taken the time to make sure the strategy that is agreed upon is being supported by the executive team.

During the implementation of the strategy, resources should be allocated to proper IT infrastructure for systems that not only facilitate best practices of a multi-unit catering operation, but systems that also enhance the customer experience and ultimately enforce good policies and procedures that support that experience.

Finally, to successfully implement your strategy, it will require a deep commitment to education. This will be required from marketing and messaging through internal training, and in every part of the organization that a catering order touches. Customer service, accounting, delivery, store manager, kitchen staff and so on.

5. Measure the results.

Catering has it’s own set of metrics. You must develop the right metrics for your organization. Measuring data across catering transactions requires a deep understanding and commitment to tying the catering team’s compensation to the metrics that are important to your organization.

Again, hiring an expert in this area might be helpful as there are basic measuring elements that your strategy and compensation programs should focus on for maximum benefit to the brand.

* Erle Dardick is the visionary behind MonkeyMedia Software. Using his entrepreneurial experience and his expertise in turning around food businesses, he used his deli as a launch pad to capture the intellectual property of the food business into the software.