Module 4: Starting Your Business

A. Identify the Location 

B. Creating a business plan 
C. Permits, Licenses and Insurance Policies
D. Sourcing, Purchasing, Receiving, and storing food and
beverage. 

I. OUTCOMES OF LEARNING

1. Develop basic understanding of fundamental concepts in starting business including the

following;
A. Identifying the location
B. Understand the key points in creating a business plan
C. Develop a basic knowledge about the permits, licenses and insurance policies.
D. Understand the sourcing, purchasing, receiving and storing food and beverages.

II. LESSON PRESENTATION

Once you’ve determined that you want to open a catering operation, you know you
have what it takes to succeed, you have a niche in mind, and you’re aware of your financial
capabilities, it’s time to get started. Now is the time to focus on the tasks at hand. Your
commitment to your project is paramount and will allow you to transform your vision into a
reality.

LOCATION

The identity of a catering business is based on its

potential customers, and your location needs to fit
your catering business’s identity. Although an off-
premise caterer can have a production facility in a
remote area and still target a specific clientele, an
on-premise caterer requires more visibility and a
desirable location in order to attract customers.

CREATING A BUSINESS PLAN

Your business plan will be the financial framework for how you run your business. You’ll also
need a business plan if you want to apply for a loan or a government grant. Venture capital
groups also require a written business plan when contemplating their involvement with a
project.
 Contents of a Formal Business Plan

 Cover sheet
 Statement of purpose
 Table of contents

Information about your proposed business:

 Description of the Business

 Marketing
 Competition
 Operating Procedures
 Personnel Principal (Owner, chef, sales, leader, and so on) and staffing requirement.

Financial Data

A. Loan applications
B. A capital equipment and supply list, including sample menus and unit cost of each menu
item C. A balance sheet (prepared with spreadsheet software)
C. A break-even analysis
D. Pro forma income projections (profit and loss statements) for three years, detailed
monthly in the first year and by quarters in the second and third years, stating the
assumptions on which these projections are based (e.g., at least 150 booked events per
year)
E. Pro forma cash flow month by month for the first year, quarterly for the second and
third years

Appendices

 Tax returns of the principals for previous three years

 Personal financial statements (all banks have these forms)
 Copy of proposed lease or purchase agreement for building space
 Copies of licenses and other legal documents
 Copies of resumes of all principals
 Copies of letters of intent from suppliers

Permits, Licenses and Insurance Policies

Starting your catering business, the right way will save you time and trouble down the road. Get
the best legal, insurance, and tax advice before you serve your first party platter. Make sure you
have the right business structure, adequate insurance coverage, health and fire department
permits and inspections, and are in compliance. You’ll also want to be aware of payroll taxes
and workers’ compensation payments, which you can hire a professional payroll service to
handle.
The following sections discuss issues that all caterers should address.

INCORPORATION

Incorporating protects you from litigation. There are different ways to incorporate in each state.
Before deciding, you should seek professional legal advice.

INSURANCE COVERAGE

Building or Property Insurance

A caterer should have insurance to compensate a loss of property. Any building and
property within it should be covered in case of fire, theft, and so on. The policy should also
cover any liability or the loss of potential revenue caused by the inability to provide services.

Liability Insurance

Every caterer should have insurance that covers injury or illness to clients, guests, and
employees resulting from negligence on the caterer’s part. There are specialized policies that,
through a historic evaluation, can provide maximum protection for the caterer.

Workers Compensation Insurance

Federal law requires all employers to provide workers’ compensation insurance to their
employees free of charge. This insurance will provide income to an employee when he or she is
out of work due to an injury or illness that happens at the workplace during work hours.

LICENSURE

All food preparation areas must be licensed by a local health department. Each state’s laws
differ, and may be enforced by local health departments run by counties, cities, or towns.

INSPECTIONS

Health Department

Foodservice establishments are inspected periodically. The health department inspector

typically arrives unannounced during a busy production time in order to get accurate data for
evaluation. He or she investigates refrigeration temperatures, storage techniques, the internal
temperature of food items, and many other things.

Fire Department

All businesses that have public access require annual inspection by the local fire and safety
 officials, who check for unobstructed exits and stairways, required width and length of
walkways and aisles, and overall building integrity. All exits must be marked with clearly lighted
signs.

COMPLIANCE

Occupancy Codes

Fire safety officials will measure any public space and set a maximum occupancy rate for it.
Many local fire inspectors do an initial evaluation of a property and make recommendations
prior to their inspection so any necessary changes can be made to accommodate larger
occupancies.

OSHA Standards (OCCUPATIONAL SAFETY AND HEALTH STANDARDS)

OSHA sets and maintains progressive standards for safety in the workplace. They include
proper coving (rounding of corners) of table surfaces, safety valves on oven pilot lights,
acceptable forms of flooring, and much more.

Sourcing, Purchasing, Receiving, and Storing Food and Beverages

Sourcing food and beverage products is about finding the best quality for the best
wholesale price. This is an area in which you’ll need tight controls, well-written product
specifications, and good working relationships with your suppliers.

III. IINTERACTIVE DISCUSSION

1. Why is it required in any food establishment to have a licensure before starting the
business?
2. Why is it important to choose a right location when starting a business?
3. What are the insurance coverage that is required when you are starting your business

IV. VALUES REFLECTION

How would starting a business change your life?
V. ACTIVITY ENGAGEMENT

Direction: You will be required to define and develop a new catering venture. Form a group of 3
N

and organize yourself into project teams. Create a business proposal draft of your own catering
O

T
service. Finalize your presentation and present to judges for funding.
A

VI. Research Exploration

Search for a start up catering business in the Philippines and list down the pros, cons and steps
to opening a Catering business.
 VII. Integration and Synthesis

2021 MARKET TRENDS OF CATERING BUSINESS

2021 has been filled with uncertainty and changes to the fundamental routines especially
for the catering industry. List down at least 3 Market Trends this 2021 for a catering
business.

VIII. ASSESSMENT MODALITY

Multiple Choices:

Read and understand the description after the number and choose your answer on the
letters provided. Please encircle the letter of your choice.

1. They sets and maintains progressive standards for safety in the workplace. They include
proper coving (rounding of corners) of table surfaces, safety valves on oven pilot lights,
acceptable forms of flooring, and much more.
A. Occupational Safety and Health Administration
B. Outstanding Safety and Health Administration
C. Occupational Shore and Health Administration
D. Outstanding Safe and Housing Administration
2. The identity of a catering business is based on its potential customers, and your _________
needs to fit your catering business’s identity.
A. Market C. Business Plan
B. Location D. Client
3. This includes the loan applications, a capital equipment and supply list, including sample
menus and unit cost of each menu item C. A balance sheet (prepared with spreadsheet
software), and a break-even analysis.
A. Business Plan C. Financial Data
B. Appendices D. Permits and license
4. The policy should also cover any liability or the loss of potential revenue caused by the
inability to provide services.
A. Incorporation C. Liability Insurance
B. Building or Property Insurance D. Workers Compensation Insurance

5. All food preparation areas must be licensed by a local health department. Each state’s laws
differ, and may be enforced by local health departments run by counties, cities, or towns.
A. Incorporation C. Licensure
B. Building or Property Insurance D. Liability Insurance

6. Many local fire inspectors do an initial evaluation of a property and make recommendations
prior to their inspection so any necessary changes can be made to accommodate larger
occupancies.
A. Compliance C. OSHA
B. Occupancy Code D. Licensure

7. This is an area in which you’ll need tight controls, well-written product specifications, and
good working relationships with your suppliers.
A. Sourcing, Purchasing, Receiving, and Storing Food and Beverages
B. Licensure
C. Insurance
D. Inspection

8. This insurance will provide income to an employee when he or she is out of work due to an
injury or illness that happens at the workplace during work hours.
A. Incorporation C. Liability Insurance
B. Building or Property Insurance D. Workers Compensation Insurance
9. Every caterer should have insurance that covers injury or illness to clients, guests, and
employees resulting from negligence on the caterer’s part. There are specialized policies
that, through a historic evaluation, can provide maximum protection for the caterer.
A. Incorporation C. Liability Insurance
B. Building or Property Insurance D. Workers Compensation Insurance

VII. NETWORK LINKS, DIGITAL SOURCES AND REFERENCES

Network Link
Google Classroom

Web Source & Pictures

https://www.osha.gov/aboutosha
https://vendedigital.com/blog/local-seo-businesses-without-physical-address/
Textbook
Anthony J. Strianese; Pamela P. Strianese, Dining and Banquet Management Fourth Edition,
2008 Delmar Learning.
Dr. Jake C Viana 2015, Food Service and Management II, Mind shapers Co., Inc.
Daryl Ace V. Cornell
Ephraimeul Jose L. Abellana
Food & Beverage Service Procedures Second Edition, Mind shapers Co., Inc.
Bruce Mattel, Catering: A guide to managing successful Business Operations, Second Edition 2016, The
Culinary Institute of America