Fresh Farm Catering Services
Fresh Farm Catering Services is a part-time catering business that will be operated from and hopes to expand to a physical location and become full-time as demand for services increase. Fresh Farmer caterers will mostly focus on, social events such as birthdays, campus parties, and later graduate to wedding catering services and corporate catering as the company grows. Normally, the company will serve parties or events of about 25 to 100 people with a large menu repertoire that will include creative inventions for the various target groups to cuisines, modern-day favorites, and traditional delicacies. At Fresh Farm, we will strive to meet our entire client demands to ensure mutual benefits and growth. Besides, we believe and understand the true meaning of quality food as a necessity to life and its contribution to human satisfaction and happiness. Therefore, apart from offering nutritious foods to all our customers, we will also have mouth-watering and tantalizing meals that will also be pocket-friendly to meet the economic needs of our clients.
Inspired by the need to go beyond great food, Fresh Farm Catering Services offer more attention to our services to bring to our client’s more personalized services. From us, clients will enjoy fresh, authentic, and homemade foods made with a family touch. We also intend to offer pocket friendly services to meet the economic needs of our clients.
Market and Competition
In the United States, the catering industry is a significant one accounting for over $8.12 billion in 2016 (“Catering services in the U.S. – Statistics & Facts,” n.d). A considerable amount of this amount is usually generated through special event parties, corporate functions, and weddings among others. Although the number of registered catering business is considerably high, there are loads of business opportunities across the U.S. in Miami Florida; the catering market is an interesting one. There are several caterers offering services that are quite similar to each other regarding price and menu options. However, this does not mean that there are no opportunities for startup entrepreneurs who are interested in running a catering business in the city.
As mentioned earlier, the company will mostly offer social events catering services to birthday parties, campus parties, welfare catering, and romantic catering among other small events. Practically, the target customers will be young people between the ages of 18 to 24 years who may want a caterer to handle their events. Other clients will be people with families who may want to throw a birthday party for themselves or their children and families. The romantic catering will cater for lovers who want to surprise their partners, but cannot cook. The company will be able to cook and prepare the location for the surprise dinner with candles, flowers, and create the right atmosphere for the lovers. The key is to offer an unforgettable dining experience not only with delicious foods but also with the right atmosphere and mood. The kind of welfare catering that Fresh farm Catering Services will offer will focus on religious bodies, elderly or homeless people homes and provide catering services to the people when they have special events.
Reaching out to the Consumers
When starting a new business, it is important for companies to get their potential customers to buy or spend on their products or services actively. According to Smith (2013), this can only be done through marketing the business to the target customers by using the right ways or methods. In this case, marketing for the special events will be online based, where the company intends to have a strong online presence through a website and social media. The company will also consider marketing through the school notice board to reach out to as many students as possible. For the welfare event catering, the company will have to approach and meet the people in charge and offer the company’s services at a fee.
The catering businesses within Miami in Florida provide catering services at client-owned and company-owned facilities. Similarly, majorities of these catering companies’ function as local businesses and are more focused on special events such as corporate events, wedding catering, graduation events, and birthday parties among other duties. There are also long-standing companies that have been in existence for over ten years and have a solid customer base. Nevertheless, and in order to understand the viability and potential profitability of the Fresh Farm Catering Services in Miami, we will take into account the five competitive forces of Porter’s model to analyze the market.
Threats of New Entrants
The threat of new entrants is determined by barriers to entry, ranging from economic scale, covering size and the scope of operations necessary to acquire viable cost structure, switching costs, and customer loyalty (Porter, 1991). Unlike the hotel industry, which is characterized by high start-up costs, the catering business requires some considerably low costs because the entrepreneur can even start from their home and expand the business later after generating enough capital and customer base. Due to this, the threat of new entrants is considerably high since some individuals can afford the startup capital.
Threat of Substitute Products
According to Porter (1991), substitute products can be existing or potential goods and / or services, which can replace the services offered and perform the same function. The products have the ability to reduce costs or provide better quality performance and value as a result of an invention. In the catering business, the threat of substitutes may come from new start-ups that provide services and at lower prices than the ones being offered in the market. However, this strategy is sometimes not sustainable, and Farm Fresh should be able to overcome it with a strong marketing team and excellent services. Thus, the threat of substitutes is considerably low.
Bargaining power of Suppliers
The bargaining power of suppliers usually depends on how powerful the suppliers are to industry as compared to the consumers (Porter, 1991). In the catering industry, the suppliers are the laborers or the experienced, trained personnel who are in high demand. Nonetheless, the bargaining power of the suppliers is weak. Still, for a sustainable business strategy for the long term, the company will have to get the best and ensure they receive high remunerations.
Bargaining Power of Consumers
In a given industry, the consumers may be convincing if they are more than the players in the industry and have the ability to force down the prices and reduce the industrial margin. As Porter (1991) notes, this means that they can purchase more from the industry and in large volumes and in return decrease the costs or increase through demand and supply. The catering business is flooded, and so customers have a wide range of options to go it. In light of this, their bargaining power is significantly high and are likely to bring down the costs.
Rivalry among companies often leads to aggressive pricings and promotion in battles to benefit and attract more clients (Porter, 1991). In the catering business in Miami, there is a high likelihood of some businesses lowering their costs to retain customers. Thus, the degree of rivalry is considerably high.
When starting a business, the IRS (2017), notes that it is important to decide the form of business entity to establish. The form of business also determines the income tax return the company is required to file. Normally, there are four common types of businesses, which include sole proprietorship, partnership, corporation, and S corporation. The company will be a sole proprietorship but keeps open the probability of going into partnership once the business expands. By being a sole proprietorship, it means that one individual owns the company
Fresh Farm Catering Services will be located in Miami Florida and will be operated from the owner’s house. Securing clients will mostly be through online marketing, where the company intends to develop a marketing package for their different services and market it to various target groups among other marketing channels. Later as the business expands, we hope to have a physical location in Miami Florida.
Before starting the catering business, the owner will need to obtain a license to give them the permission to open and run the business. Some of these licenses include the catering license, which will need to be renewed every year. Other permits include Air and Water pollution control permit, occupational health and safety permit, and fictitious business name permit. Similarly, some of the legal documents necessary for running the business will include a business plan, contract forms, health and policy documents, insurance documents, tax registration and permit documents.
Management and Startup Team
The company will have one managing director who is also the owner and the sole decision-maker in the company. The MD holds a Masters in Business and has a five years experience in running a business. The MD will be required to make decisions among them client acquisition, to vender selection, to the implementation of the business strategies. Typical of any start-up business that hopes to expand later as demand for services increase, the corporate structure will also change as the firm grows. Apart from the Managing Director, the company will also hire the services of two professional chefs who will take orders from the owner. The two will be responsible for overseeing the culinary department and ensure that food is prepared according to the demands of the clients and on time. The professional chefs will be expected to have a diploma and at least five years experience in a busy restaurant. Along with these two, the company will also seek the services of two servicemen or women who will be responsible for cleaning and serving as well as attending to any other duty as deemed by the management. The personnel will be expected to have a Diploma in the hospitality industry and at least two years experience.
Other Professional Services
The business will hire the services of a lawyer from time to time to advise them on legal matters involving the business. Along with the lawyer, the firm will also seek the services of an accountant to help in balancing and auditing of the company’s financial issues.
Since the company is expected to start as a small-scale business operating from the owner’s house, it is targeted that the start-up capital will not go beyond $30,000. In this context, the owner hopes to finance the business from their savings and collect additional funds through various means. The first source of funding will be from family and friends. The owner will approach family members and friends who have the potential to fund the business and give them a detailed proposal of the business plan. The second source of funding will be through loans. Here, the owner will approach lending institutions offering Small Business Community loans and convince them to fund the business. Of course, there will be a need for collateral, which will be the sole responsibility of the owner. The third source of funding will be through grants. The owner will be required to follow the procedure and meet the requirements as per the federal government rules on donations.
“Catering services in the U.S. – Statistics & Facts.” (n.d). Statista: The Statistics Portal. Retrieved from: https://www.statista.com/topics/2289/catering-services-in-the-us/
IRS. (2017). Business Structures. Retrieved from: https://www.irs.gov/businesses/small-businesses-self-employed/business-structures
Porter, M. E. (1991). How competitive forces shape strategy. Boston: Harvard Business School Press.
Smith, H. (2013). Learn small business start-up in 7 days. Richmond, Vic: Wiley.
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