Business formulas in the catering industry

A business formula is a total image that a company conveys to guests or potential guests through its offering and working methods. Every company has its own formula. One formula has limited opening hours and a wide range, many different types of preparations and personal service, while the other formula has long opening hours, a narrow range and self-service.

business formulas

Business formulas are very important in the catering industry. In the catering industry, the business formula must attract guests and compete with colleagues. Guests in the catering industry have three choices.

  1. Quick or extensive food.
  2. Spend a lot or a little money.
  3. Company image.

These choices have been further expanded by the entrepreneur into a business formula. From the kitchen’s perspective, the chefs must adapt their dishes to the guests, this is also called guest-oriented or market-oriented work. Every company makes different choices and thus focuses on a specific target group. In this way the companies distinguish themselves from the others. This could be, for example: the types of dishes, opening hours and the wine list.

How do you describe a business formula

You can describe the word business formula as: a vision that has been developed by the entrepreneur who can be both conscious and unconscious. The difference is that with a conscious business formula someone knows why how and what he does and can also explain and reason about it, and the entrepreneur has often conducted an investigation. A business formula that has been devised unconsciously comes more from someone who relies on his feelings and cannot actually explain why certain decisions have been made. Because there are so many types of companies, something is needed with which you can describe and compare all these companies. A business formula consists of a mixture of properties. Every formula in the catering industry is characterized by emphasizing one or a combination of the 6 P’s:

  • Product _
  • Presentation _
  • Staff _
  • Place _
  • Promotion _
  • Price _

Each P represents part of the business formula and is part of the offering. At a luxury restaurant the emphasis is on price and the other 5 P’s are automatically adjusted accordingly. However, for a roadside restaurant the emphasis is on space because they focus on people who spend a long time on the road.

What is a target group

Before you devise or develop a business formula, you must first know which target group you want to reach. A target group can be anything. Some examples are: age category, business people or people who are traveling. The first choice and condition before an entrepreneur comes up with a business formula is to determine the target group. The entrepreneur can do this based on vision or on feeling. The most important thing is that the entrepreneur must be able to do it, want to do it and have the ambition to do it.

The 6 P’s

The 6 P’s must match the target group chosen. If this is not the case or one of the Ps is out of balance, the business formula would not work or not work as well.

Product _

The quality of the product and the presentation of the products.

Presentation _

By presentation we refer to the organization of a company. This is both material, such as the furniture and decoration, and intangible, such as the music and atmosphere.

Staff _

Self-service restaurants, cafeterias and luxury restaurants are all examples of formulas that provide clues about the company’s workforce. The staff is an intangible product consisting of service and operation. For example, a luxury restaurant has many staff who pay close attention to all details, while a self-service restaurant has fewer staff.

Place _

Roadside restaurants and station restaurants are formulas that provide clues about the location of a business. The location gives the guest an idea of the design of the other 5 P’s

Promotion _

By this we mean advertising and increasing brand awareness. There is a difference between internal and external promotion. We mean internal promotion, including menu cards and appropriate decoration. An example of this is the menu, which is extensive and clear. It is also completely graphically designed, so it does not only contain plain text. External promotion is all promotion outside the company, such as a website.

Price _

Each business type gives expectations about the price, such as a luxury restaurant or a fast-food company. The price level gives a good indication of the other 5 P’s. The price is determined by many factors, including quality and requirements such as craftsmanship and the location. All these factors must be in line with the other 5 P’s.