How to Create a Meaningful Financial Plan for Your Catering Business

Writing out a financial plan for your catering business is an essential action that helps outline not only what you have mapped out for your catering company, but also how your finances tie into this, making all your prospective strategies possible. However, this comes with a range of factors that can affect your financial performance and forecasting.

In 2022, the UK contract catering market value rose by 36%. While this signifies an increase in the number of opportunities within the market, this doesn’t justify leaping into your business idea without a well thought out financial plan. Success comes from a watertight strategy that accounts for all possible influencing factors. Here is how to create one.

Why Your Catering Business Should Have a Financial Plan

The number of finance-dependent elements of your business that tread the fine line between success and failure is significant. From effective budgeting for setting realistic financial goals and efficiently distributing resources, to cash flow management that accurately monitors the day-to-day incomings and outgoings of your catering business, the influence of finances is existent in every business decision that you make.

A well thought out financial plan helps minimise risk by accounting for both existent and potential influences on your profitability. From fluctuating food prices, to changes in demand, to the unpredictable nature of event catering, an effective plan can help nullify these factors and place monetary emphasis on the areas of your business that require it most.

What to Include in Your Financial Business Plan

Every financial plan for a catering business should take a look at the big picture before diving into the finer details of what makes your company tick – and what doesn’t. All elements need to be taken into account, from the potential revenue streams, to seasonal patterns, to common costs. Only when all aspects of your business are considered is your catering financial plan likely to succeed in steering you towards success.

A good starting point for any successful financial plan is to accurately outline the following:

Goals

No financial plan is complete without strategically selected goals. If you don’t know what your overall aims are, your business plan – and, by association, catering business – is sure to stray from the path. Be ambitious but realistic with these goals. If you select targets that are beyond the realms of possibility the rest of your financial plan will collapse when you inevitably miss the mark.

Strategies

It’s all well and good outlining your goals, but if you don’t have an idea of how you are going to achieve them, then you are unlikely to achieve them. Much like any good restaurant business plan, everything from concept to delivery needs to be included within the strategy section of your financial plan. This includes costs that must be considered, from staff to equipment to ingredients, as well as potential revenue streams and how you mean to acquire them.

Capital Requirements

There is no use creating a financial plan for your catering business without having a required budget in mind. By taking founding expenses, investments and start-up costs, as well as your equity capital, into consideration, you will be able to accurately outline exactly what kind of capital you require. This adds clarity to make it easier to calculate how much external capital you will require.

Potential Risks

Part of the financial plan for your catering business should consist of the potential negative factors that could be a detriment to your company’s success. Again, revenue streams should be considered here, but more importantly you should always bear potential negative influences in mind. This will likely include external factors such as seasonal fluctuations, catering to partners’ needs and, for those in event catering, the natural unpredictability that comes with the industry.

Future Projections

Using the data at hand and your knowledge of the industry, you should mark out financial projections for your catering business. Leveraging the financial data available to you and all the information amassed above, you should earmark what the future looks like for your catering business’ finances. This is the information that will help attract the attention of prospective investors and give you a rough guide of what the future holds for your catering company.

How The Engine Room Can Help

Coming from a combination of operational and financial backgrounds, our team of catering consultants at The Engine Room use their experienced commercial mindsets to give you a new perspective on your business, including what is working well and what isn’t.

Our team works closely with yours in order to get a more rounded view of how you function and what your aims are. After gaining this inclusive perspective, we are able to mould a financial plan suited to your business’ unique needs using tried and tested techniques.

If you would like our advice on how you can improve the profitability of your catering business, get in touch with our team on 020 8629 1594 or at enquiries@the-engineroom.co.uk.