Once the holiday season is over, there is usually a big lull for caterers until wedding season kicks in. It’s like hibernating, hunkering down until wedding season arrives. They are waiting, waiting, waiting until the time they start generating profits again. In the meantime, caterers are searching for ways to keep their employees busy and paying them out of a backup account. They have employees doing things like rolling forks in napkins for a 200-person picnic in April or cleaning out files at a pace slower than a turtle so they can “have some hours.” Those hours, by the way, are your money.
Let me ask you this: is this a good use of your money? It is never easy to cut hours for employees, but caterers who don’t cut hours during their slow periods are spending the money in their backup accounts needlessly. I used to do the same thing until I consulted with David Scott Peters at TheRestaurantExpert.com, who told me, “Sandy, this is a business, not a charity.”
Now I pay my employees according to the needs of the business.
About that hibernation period and that backup account. Cutting costs is one way to get through those low season periods, but there are ways to diversify your catering revenue streams to increase your net profits today and be proactive about increasing your company profits so you avoid severe low season periods. There is nothing wrong with being a wedding catering specialist or a corporate catering specialist, but in the low season, it makes it really tough to meet payroll without drawing from your backup bank account.
I was in that same boat, but 12 years ago, I decided to diversify as much as possible so I wasn’t drawing on that backup account. It was the best decision I ever made. Besides the mainstays of wedding and corporate catering, we have found multiple out-of-the-box corporate catering jobs that are not on most caterers’ radars. For example, we are the exclusive caterer for a hotel. It provides repeat business on a consistent basis. In addition, two retail food shops have created a niche market for us with women who do not cook but who want to serve handcrafted food to their family and friends. Today we have seven different catering revenue streams, which translates into stability for my employees and their families. It translates into very few ups and downs of revenue during the year. It translates into no hibernating.
A few years ago while attending a Catersource conference during the height of the recession, I was seated at a table of fellow caterers during a luncheon. We were asked to go around the table and take turns talking about how the recession had affected our business and what we were doing about it. There were 10 people at my table, all owners of catering companies across the US. Everyone at the table reported a 35-40 percent drop in gross revenue and a huge loss in bottom-line profits. I was supposed to be the last person at the table to share about my company, but right before I started to talk, we were told the luncheon was over and it was time to go to our next session, so we adjourned. I was so glad I did not get to speak because my company gross sales were up 1.5 percent and bottom-line profits were up. I don’t think others at the table could bear that kind of news.
Since that time, I’ve had a change of heart in sharing about catering during a recession. If you are diversified, you should be recession proof! It can be done and my company is proof. In fact, I have found great motivation in developing friendly competition with fellow caterers. A catering friend of mine and I are competing for who will hit their sales landmark first. We have both won once. I’m looking forward to seeing who will break the tie in 2016.
You wouldn’t have added catering to your restaurant if you were not creative. Be proactive. Put on that creative thinking cap and get out there to look for any outside-the-box ways you can cater food and create multiple revenue streams. Your net profits and your company profits will reward you.