Sumptuous Cuisine Catering
Executive Summary
Sumptuous Cuisine Catering is a local catering company serving both business and private clients in
Doeuvreville and the surrounding towns within a ten mile radius. Established in 2005, the business
has operated a catering kitchen and specialized in full-service catering and event planning for
upscale events in the region. The business event management, event staff, a variety of cuisine for
breakfasts, lunches, dinners, and appetizers, alcoholic and non-alcoholic beverage service, floral
design, space design and decor, musicians and DJs, event equipment and furniture rentals, and other
event services. Sumptuous Cuisine Catering seeks to expand its operations to a dedicated venue,
called The Sumptuous Ballroom, located in Doeuvreville, with a mortgage on the space, its own cash
reserves and the issuing of a convertible debt to angel investors.
The addition of The Sumptuous Ballroom to the services provided by Sumptuous Cuisine Catering
will enable gross margins to rise above their previous levels and industry averages as rentals of
space provide high gross margins. Both existing and new clients will be interested in using this space,
and in the additional services Sumptuous Cuisine Catering provides. Top line sales will grow from
their current level in 2009 to more than double in 2012. Net profits will rise three-fold from 2010 to
2012 after this acquisition, even with the expected increases in operating expenses. Sumptuous
Cuisine Catering will seek to utilize the space on at least 40% of days by the end of year 3 to achieve
these results.
Objectives
Sumptuous Cuisine Catering has set the following objectives for the first three years of the launch of
its ballroom:
Renovate and upgrade the interior of the ballroom
Hire and retain a facilities manager to run the logistics of the new space
Produce a positive return on investment for the ballroom acquisition by the end of the second year
Utilize the ballroom on 40% of days by the end of the third year
Mission
Sumptuous Cuisine Catering offers top-class event experiences with flawless execution to business
and private clients in the Doeuvreville area. With Sumptuous Cuisine Catering running your event, the
food will be delicious, the service will be excellent and the guests will be wowed.
Keys to Success
Keys to success in the catering and event business include:
Managing and exceeding client expectations
Balancing expert opinions and advice with care for the client’s preferences and vision
Exhibiting a sense of professional showmanship on the day of the event – the show must go on
Protecting the client’s interests and liability even when it requires unpopular decisions
Sumptuous Cuisine Catering keeps these keys in mind through all events they have managed and
catered in the past and will renew their efforts as they open their own catering venue.
Company Summary
Sumptuous Cuisine Catering is a local catering company serving both business and private clients in
Doeuvreville and the surrounding towns within a ten mile radius. Established in 2005, the business
has operated a catering kitchen and specialized in full-service catering and event planning for
upscale events in the region both at client sites and at event spaces and halls. The business became
the in-house caterer at Corporate Hall, a corporate meeting space, in Doeuvreville in 2008, and has
developed expertise related to managing client events and event planning. For most events,
Sumptuous Cuisine Catering provides referrals to additional vendors, manages client rental
equipment needs, and provides event management expertise on the day of the event.
Company Ownership
Sumptuous Cuisine Catering was founded by partners Rudy Electrum and Tosca Cabrini. Built from
the ground up by these partners, Rudy owns 49% of the business and Tosca 51%. The business is
established as an LLC.
10% of shares will be given to angel investors who purchase $270,000 in convertible debt to help to
finance the expansion of Sumptuous Cuisine Catering. This will dilute Electrum’s shares to 44% and
Cabrini’s shares to 46%.
Company History
Over the past three years, Sumptuous Cuisine Catering has made significant advances, developing
its core business significantly after somewhat slow growth for its first two years of operation. Gross
and operating margins have steadily improved and the business has continued to invest in kitchen
and delivery equipment, as well as some of its own event furniture.
Sales have grown due to increasing partnerships with venues, like Corporate Hall, and event
planners, like Jackie Lyman Associates and Your Perfect Event LLC which refer clients and
subcontract work to Sumptuous Cuisine Catering. These referrals and partnerships have accounted
for 75% of growth in the past three years. Corporate Hall alone accounted for 15% of sales in 2009.
The remaining growth has been due to new client acquisition through marketing and referrals to
clients directly.
Inventory has historically included raw materials for food as well as beverages and liquor. These have
been accounted for as inventory and attributed to cost of sales for each job. Cost of sales has also
included hourly wages to cater-waiters, event managers and other event staff, fuel for delivery, and
supplies for the event (paper napkins, etc). Cost of sales also includes vendor subcontractors who the
client pays through Sumptuous Cuisine Catering (generally rental equipment, florists, designers and
musicians/DJs). Sumptuous Cuisine Catering lets clients contract directly when they prefer and
recommends they contract directly with audio-visual and lighting providers.
Operating expenses have dropped from 45% of sales to 40% of sales over these previous three
years, while they have grown by $150,000 in absolute value.
Products and Services
Sumptuous Cuisine Catering currently offers the following products and services:
Event management
Coat-check, door check, and restroom attendants
A variety of cuisine for breakfasts, lunches, dinners, and appetizers
Non-alcoholic, wine, beer, and liquor beverage service
Wait service
Through subcontractors, Sumptuous Cuisine Catering offers:
Floral design
Space design and decor
Musicians and DJs
Event equipment and furniture rentals
Cakes
Through referrals, Sumptuous Cuisine Catering offers:
Lighting
Audio-visual rentals and support
Event security
Valet service
Future plans include the following additions with the opening of The Sumptuous Ballroom:
Ballroom rentals for half-day or full-day timespans
Space rental with a per-head full-service catering fee or as a fee separate from catering
and beverage
Facility management service
Market Analysis Summary
The catering industry serves private, corporate, and non-profit events with food, drinks, event
management and other services. Events are generally held by clients in order to celebrate,
communicate, or both.
Celebration: Parties and banquets as part of key events in life (birthdays, weddings, bar and bat
mitzvahs, engagements, bridal and baby showers, retirement parties, etc.) or for a business (holiday
or end-of-year parties, retirements, honoree galas, etc.)
Communication: Events to communicate a message for the benefit of attendees or the press (product
launches, press events, trade shows, conferences, presentations, lectures, fundraisers) or to
stimulate discussion (corporate meetings, summits, etc.)
The U.S. market for caterers was estimated at $6.9 billion in 2008 by IBISWorld. The market is prone
to economic cycles, as events, especially corporate events, are one of the first expenses cut during a
downturn. Celebratory events may be scaled back a bit, but are generally not canceled during a
downturn (i.e., spending on weddings, bar mitzvahs, etc., continues). The industry contracted by
1.5% in 2008 due the economic downturn and a similar decline is apparent for 2009. In 2010 the
industry is expected to return to positive growth. The industry is relatively mature, as 33,000 catering
companies serve the U.S., or one company for every 9,000 Americans.
There is a movement towards horizontal integration in the greater event industry, with some full-
service event providers growing to provide entertainment, audio-visual and technology, catering,
rentals, decor, venues and more. Businesses that provide these additional services may take on
assets that are not as fully utilized as a specialist’s would be, but they can earn greater margins on
the sales they make. With its opening of The Sumptuous Ballroom, Sumptuous Cuisine Catering will
become part of this integration movement.
Market Segmentation
The market analysis chart is provided for the Doeuvreville area in a radius of ten miles.
The corporate market is defined as businesses which hold at least one off-site event each year.
Businesses often have A/V and public relations needs in concert with their events which may serve a
marketing function for the business. Whether entertaining the press, clients, or board members,
businesses require professional execution, delicious food and drinks, and alignment between the
event managers/caterers and their business’s objectives for the event.
The private market includes households with a combined household income of over $80,000 per
year (those most likely to throw an upscale event in a rented venue). This group puts a great deal of
pressure on caterers and requires added attention, as lavish events may be uncommon for them.
They require hands-on work and planning as well as expert advice and referrals throughout the
process.
The non-profit market is defined as non-profit organizations which hold at least one off-site event
each year. Very price conscious, the non-profit market looks for in-kind donations and discounted
services whenever possible. Some non-profits realize the benefit of paying for great events which
lead, in kind, to improved perception of the organization and donations, while others will take the
lowest price available at the minimal quality level acceptable.
