We all know the story because we are all living it right now. Overnight our entire event catering revenues for 2020 disappeared. Maybe a few of your clients have called to book a shower or graduation drop-off, but a catering company can’t survive for long on occasional small events for 10–15 guests. Some questions you are probably asking include:
- How long can or will you drain your savings to pay the rent for your commissary kitchen?
- What do you do now that your PPP funds have been exhausted?
- Do you sell, close, declare bankruptcy?
- Are there any catering companies making profits in 2020?
- Is anyone out there even treading water and just breaking even?
The answer to all of these questions is you’re only a revenue stream away from overcoming the current conditions.
Here is how I know. I started The Festive Kitchen more than 25 years ago baking brownies for a burger bistro in the Dallas area. I knew nothing about the food business. I was a great cook and had excellent hospitality skills so I figured I could make a little extra money for my family 15–20 hours a week and call myself a caterer.
Fast forward seven years. Company sales were 80 percent weddings and 20 percent high-end social catering. Our social clients started to frequently request items they had at one of their catered events. I decided to meet the demand and open a little retail shop. It was just a two-door refrigerator, a 4-foot table, a calculator and handwritten receipts in front of our production kitchen.
Unfortunately, I failed to account for the average 15-mile distance that most of our social clients were from our catering kitchen and the major five-year renovation starting on the main highway these customers used to visit our shop. There was no way they were going to travel that distance to come buy our food, which at that time consisted of four flavors of cookie dough balls and two frozen hors d’oeuvres. I jumped off a cliff and signed a lease on a tiny little store in the middle of the affluent neighborhoods we served.
That was in May 2001. Four months later 9/11 happened. All catering events stopped but the little store kept churning. Why? Families must eat in the good times and the bad.
I learned a valuable lesson in the weeks following 9/11. My company must have MRS (multiple revenue streams). When one revenue stream is not doing well, then one or two of the other revenue streams make up the difference.
Fast forward to 2009 to The Great Recession. Traditional event catering tanked again. By that time, I had more than eight revenue streams and my company showed no loss in company sales year over year. It was unheard of!
Again in August 2010, The Festive Kitchen was the most affected small business in the U.S. due to the historical egg recall. We should have been forced to lay-off employees and possibly close the business, but again, the MRS kept us at positive net profits.
Here we are 10 years later and faced with one of the worst business disruptions in recorded history. The Festive Kitchen is at 96 percent of pre-pandemic income. Why? MRS!
And I’m not alone. I have several members of my coaching program, The Catering Coach, who have established MRS to balance out their yearly slow event months. Right now, they are surviving. Some are just treading water, all are keeping their doors open, and one is at 87 percent pre-pandemic numbers with forecasted end-of-year gross sales higher than 2019 with 0 percent catered events. This is a company that in 2019, 80 percent of gross sales were off-site catered events.
Here are just a few proven MRS :
- Operate a retail food shop. Your customers love your food. They want your food. They are buying from the grocer, Costco, Sam’s Club, a farmer’s market. Why not from you? Establish your shop at your catering kitchen. Contact your database and start selling what they need every day for every meal. NOT just family dinners. Sell them egg salad, chicken salad, cookie dough, frozen pizza, granola, etc.
- Find hidden contracts for catering. I know a caterer that is almost at 100 percent pre-pandemic sales due to a new contract to provide daily meals for kids through her state education system. Yes, as a caterer you love the pretty on a plate. The pretty on a buffet. A sack lunch may not be pretty, but it’s profitable! Get over the “pretty” if you want to stay in business.
- Be a co-packer. This is one of the revenue streams that is making a huge sales impact for one of my Catering Coach members.
- Be a food manufacturer. My company manufactures and sells wholesale more than 15 items to one of the top three gourmet grocery retailers in the U.S. You can find our products in their stores throughout Texas.
- Sell your items online to your current database. Your customers can pick up from your kitchen, or you can deliver to them. Online food shopping has exploded! Don’t get left at the starting blocks.
Currently, The Festive Kitchen has 11 revenue streams with number 12 launching in a few weeks. Are all 11 fully operational since COVID-19 began? No. But does it matter which revenue streams are operational? What matters is the company is not only surviving but thriving. We had record sales and profits in 2019, and our forecasted 2020 sales and profits could match last year. You can do the same. You’re only a revenue stream away from overcoming massive business interruptions now and in the future.