How to go national with your catering brand12th May 2017
Running a successful business in the catering industry is no small task. As exciting, diverse and flamboyant as the industry can be, it’s also extremely competitive. To take your business from an SME to a well-known and fully trusted national food brand you need to invest ample amounts of time, effort and funds to make it big. But with intense dedication and the right advice, there’s no reason why you can’t succeed in this endeavour. The Business Finance experts at Rangewell have come together and are once again offering you advice on how to transform your business into a highly successful national brand.
4 points to consider first
1. Decide what type of catering business you’ll run
A simple first step but far too many businesses fail because the owners can’t decide on exactly what type of establishment they’re going to run. If you’re running a restaurant do you wish to specialise in Asian food, fried chicken or fish and chips, pies and so on? Should your goal be to become a food producer, are your chosen products going to be frozen vegetables, houmous, microwave meals or something more exotic?
Establishing your brand’s identity is vital, you simply can’t be all things to all people. Attempting to do so usually ends in disaster as your customers won’t be able to understand what your business stands for. When you’ve decided, take the opportunity to go and do research. Become the expert in your chosen area and consider how you can do things differently in order to produce a superior product and service. After all, you can’t be a pizzeria set inside a fish & chip shop.
2. How to form the foundations of your business.
Forming the foundations of your catering business can be tricky. If you’re going to run a restaurant you’re going to need access to a commercial kitchen that’s located in an area where your target audience can easily see you. The kitchen itself must be able to hold and support all the equipment too. But at this stage, many SME restaurants will have very tight budgets.
Most SME restaurant owners tend to run their establishments on Leasehold properties, meaning that they’ll be renting the space for an agreed period and rent. You’ll also be responsible for insurance, admin, maintenance and so on, despite renting. In Central London, you could be looking at around £3,500pm whilst in Wandsworth, you may be paying £1,500. As such, it really does pay to look around before deciding on a location. Freeholds are an option where you own the land, but taking the cost into consideration, it is exceedingly rare.
Meanwhile, food producers need to acquire a factory space in which to manufacture and package food, as well as a platform on which to sell it. When choosing a factory you need to ensure that they can handle and support the quantities that are needed. You’ll also need to ensure that their staff have the skills necessary to produce it. At an early stage you need to consider selling your produce anywhere you can. Your aim should be to acquire a contract with a popular supermarket. When it comes to acquiring a factory space, many food producers choose to hire as it will allow them to move to a larger, more specialised factory if necessary.
3. Growing your catering business
Growth has always been vital in business, especially if you’re going to become a national food brand. There are many ways you can choose to grow your business, all of them requiring careful consideration. Ultimately, whether you’re a restaurant owner or food producer, you’re focus should be based around pleasing your customers in order to develop your brand’s reputation.
For restaurant owners, expanding into new areas is going to be essential. Subsequently, you’ll need to do research into other areas, ensuring that the demand for your brand is strong. One way of testing the local demographic is to use mobile kitchens. If there is a strong demand and it makes financial sense, you can then think about establishing an entirely new branch. As such, this will only boost the necessity for new dining room furnishings and highly specialised, state-of-the-art catering equipment within your business.
On the other hand, food producers will need to acquire essential contracts with supermarkets. This will, undoubtedly, mean moving into another a much larger and more specialised factory complex that will grant you access to more skills, equipment and storage space. Although renting may serve as a foundation, choosing to own your own factory may be more fitting financially and will firmly cement your brand into the industry.
4. Applying for finance
At every stage of your catering business’ development, ensuring that you have a constant rate of growth is essential. However, although it may be tempting to dip into your own personal finances, this can often do more harm than good. You’ll be depriving yourself of key funds that you’ll need later. Instead, why not leave your own funds where they are and apply for business finance?
Whether you need new equipment, other premises or a fleet of vehicles, the alternative finance industry can help. But with thousands upon thousands of finance solutions to choose from, finding the right one for your business can be challenging. That is why more and more business owners are turning to Rangewell when it comes to acquiring business finance. With our services, we can help source the perfect finance solution to suit your business’ needs exactly, including Business Loans, Leases, Hire Purchase and so much more!
Typically Secured or Unsecured, business loans are excellent for raising capital for a wide array of purposes, including acquiring new equipment, expanding a new branch or factory, refurbishments and more. Applying for an Unsecured loan lets you can borrow anything from £5,000 to £250,000 without the need to set aside assets. Meanwhile, Secured loans help you acquire larger sums ranging from £5,000 to as much as £1,000,000. In exchange, the lender will require you to set down assets as security. With both options, you will be required to comply with a fixed monthly repayment scheme, plus interest.
Leasing agreements allow your business to borrow equipment typically for a period lasting between from 1-3 years. When discussing leases you need to understand the two types available:
- Operating: With this agreement, you borrow the asset for a portion of the asset’s projected working life span. No responsibilities, such as maintenance, repairs, registration and so on, are transferred over to you at any point. At end of the term, you’re free to either extend the lease or hand back the asset. It’s unlikely that the lessor will extend an offer allowing you to purchase the asset in question.
- Finance: Again, you’ll be required to commit to a monthly rental scheme. But this time the term can cover most of, if not the entire, lifespan of the asset concerned. You will also be required to accept certain responsibilities regarding maintenance, repairs, registration, administration and so on. Once the agreement has elapsed you are free to return, extend or purchase the asset from the lessor.
Hire Purchase Solutions:
If you require large, heavy and often very expensive pieces of equipment, a Hire Purchase solution is certain to be of great help. This solution is designed to help you acquire an asset and become its eventual owner by having an alternative lender purchase the asset on your behalf.
Before you can install and make use of the asset, you’ll need to provide a deposit to the lender equal to a sum in the region of 10% of the asset’s total worth. Once paid, you can then make use of the asset whilst keeping up with fixed monthly repayments to the lender, plus interest. Once the repayment scheme has been concluded you become the asset’s owner.
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