What is the difference between a restaurant and a catering establishment?

In a restaurant, the paying customer will order their meal to be consumed either in or out of a dining establishing using a system that relays the desire food items to a kitchen. Typically, the kitchen will prepare, or in some cases, simply finish preparing the chosen menu items which will then be delivered to the guest for consumption. Consumption can take place in the restaurant as a dine-in customer or packaged to be taken out of the restaurant as a carryout customer.

A catering establishment typically works with customers that pre-order their menu choices, either for a group of guests, or for themselves. The main difference is the fact that restaurant typically handle production at the time of the order, while caterers handle production after the order.

On the business side, restaurants have to have a very good handle on the volume of business they will see on any particular day because they will have to predict the items that they will need to have in stock to produce the menu for the entire day. Since food products are often perishable, the costliest part of running a restaurant may be determining the proper amount of product (and staff) to have on hand to produce all the items without running out of stock, while at the same time not having an overage of unused stock (or staff) that will perish. Unused stock that perishes adds significantly the bottom line of any restaurant. It's something that must be factored into the overall menu costs.

From the business side, caterers often, but not in all cases, have a small advantage in terms of inventory costs due to the fact that clients will pre-order their meals first, giving the caterer an accurate total of what items (and staff) will be needed to prepare the entire menu for any order. In this way, caterers can more easily control costs by minimizing the amount of unused products (and staff), while also ensuring that they have enough on-hand to cover the volume of business needed.

Often restaurants that have a good handle on their costs will incorporate some type of catering menu into their business help utilize excess product, as well as allow utilize down-time in the kitchen to prepare orders ahead of time for catering guests.

To the guest, both types of establishments can utilize similar features such as music, decor, and service staff to create a similar experience. However, if a guest is ordering and paying for a meal on the at the time of consumption or take-out, that typically means they are in a restaurant establishment. If the guest is only consuming a meal that has been pre-ordered or partially pre-ordered (in the case of plated choices or buffet choices in catering), that would mean it is a catered event.

Although they both have a great deal in common, and often will fall under the same business heading, there are significant advantages and disadvantages that come with both types of operation. From a business perspective, it's therefore advantageous to combine a restaurant-catering dual approach when aiming for the best financial outcome.