How to Start a Catering Business: The Complete Guide
How to Start a Catering Business: The Complete Guide
How to start a catering company
Starting a catering business can be an exciting venture for those passionate about food and hospitality. Whether you dream of catering weddings, corporate events, or intimate gatherings, this guide will walk you through the essential steps to launch your catering company successfully.
1. Outline your services
Begin by deciding the type of cuisine and events you want to specialize in. Will your focus be on gourmet meals, vegan options, or buffet-style service? Identifying your niche helps you determine your target audience and sets the tone for your brand.
Regardless of the type of food, catering services fall into two main categories: on-site and off-site.
On-site catering involves preparing and cooking food directly at the event location, such as a hotel or wedding venue.
Off-site catering means the food is prepared elsewhere and transported to the event location, which is common for business luncheons or private gatherings. This option is flexible, meaning you may either prepare everything at home or start at home and complete the cooking and plating at the event venue.
2. Conduct research
To ensure your catering business is profitable, focus on income and expenses. Before starting, calculate how much you'll need to spend to launch and run your business, and estimate how long it will take to recover those costs. This involves considering all startup expenses, including equipment and ingredients.
Once you have a clear picture of your expenses, think about how you'll cover them. You might use personal savings or a small business loan or grant. Even if you don't need external funding, having a financial safety net can help with unexpected expenses like equipment repairs or rising food prices.
Decide on the scale of your business based on your goals. A full-time operation catering large events will have a busier schedule than a side hustle or hobby. Compare expected income with expenses to ensure your business can be profitable.
If you're wondering how to start a catering business from home, first check local regulations. Some areas require enhanced ventilation, a three-compartment sink, or durable, non-porous surfaces such as stainless-steel countertops.
3. Write a catering business plan
A solid business plan is critical for outlining your goals, strategies, and financial projections. It should include:
A company overview
Market analysis of competitors and demand
Details on your menu offerings
Marketing and sales strategies
Financial plans, including funding sources and budgets
This plan will serve as a roadmap for growth and can help you secure a grant or loan if needed.
4. Choose your business structure & company name
Decide on the legal structure of your business. Different structures work best in specific situations:
A sole proprietorship works well for single-owner operations, offering full control to the business owner, but does not protect your personal assets from lawsuits.
A limited liability company (LLC) is ideal for safeguarding personal assets against lawsuits or business debts.
A partnership is suitable when launching a business with co-owners.
When you've decided which structure is best for you, choose a memorable name. Check your state’s business database and search the federal trademark database to make sure the name isn't already taken. Then register your business and entity with the relevant authorities in your state and get an Employer Identification Number (EIN) from the IRS.
5. Obtain licenses and permits
Catering businesses require specific licenses, permits and insurance, which vary by location. Common requirements include:
Food handling permit
Health department permit
Business license
Caterer permit
Alcohol license (if applicable)
Liability insurance
Workers’ Compensation insurance (if hiring employees)
Consult local government agencies to ensure compliance with regulations. Any errors in licenses could result in financial or legal trouble later on.
6. Create your menu and pricing
Design a versatile menu that caters to diverse dietary needs, such as vegetarian, vegan, or gluten-free options. Tailor offerings to different events—weddings may require plated meals, while corporate events might prefer buffet-style service.
Design your menu based on your service style: buffet options should be simple to present and store. For off-site catering, choose dishes that maintain quality during transport to meet client expectations.
When deciding your catering prices, factor in food, labor, and overhead costs to ensure profitability. Consider offering a tiered menu with dishes at different price points to suit various budgets.
7. Secure equipment and supplies
Invest in essential equipment like cooking appliances, refrigeration units, serving dishes, and utensils. To minimize upfront costs, consider renting items like tables and chairs initially before purchasing them as your business grows.
If you operate from home, ensure your kitchen meets local health standards. Alternatively, consider renting a commercial kitchen space optimized for catering operations.
Consider buying second-hand equipment or borrowing items instead of purchasing new ones. Buying ingredients in bulk can also help save money.
8. Build relationships with vendors
Catering businesses can access wholesale suppliers for bulk ingredients at lower prices, including specialty items. Early communication with vendors helps identify the best prices, delivery times, and customer service.
Build relationships with local farmers or small producers for unique ingredients. Additionally, sourcing linens, flatware, and plates from rental vendors allows you to offer added value and charge higher rates.
9. Hire staff
If you're working solo or only catering small events, you may not need employees. For larger businesses, recruit skilled professionals for both front-of-house (FOH) roles (servers) and back-of-house (BOH) roles (chefs). Proper training ensures smooth operations and excellent customer service.
10. Develop a marketing strategy
Promote your business through social media platforms, online advertising, and local networking events. Create a website to showcase your menu, provide testimonials, and attract potential clients.
Join Fash, which helps to increase your company’s visibility and gives you access to leads for customers in your area who are searching specifically for catering services.
Your ideal audience may also influence your approach. For an older audience, traditional marketing methods like local ads may be effective. However, if your target is younger and tech-savvy, focusing on social media is likely a better approach.
Encourage your clients to leave positive reviews and to refer their friends and family. Word-of-mouth advertising is one of the best ways to gain new clients.
11. Launch your business
Set an official opening date and plan a launch event to generate buzz around your services. Offer special promotions or discounts to secure initial bookings.
Starting a catering business involves careful planning but offers rewarding opportunities for creativity and community engagement. By following these steps, you can build a successful venture that delights customers with unforgettable culinary experiences.
FAQs about starting a catering business
What licenses do I need to start a catering business?
To start a catering business, you’ll need several licenses depending on your location and the services you'll offer:
General business license: Required to legally operate in your city or county.
DBA license: Needed if you operate under a name different from your legal business name.
Liquor license: Required if serving alcohol.
What permits do I need to start a catering business?
Besides the long-term licenses listed above, you'll also need multiple permits to start a catering company, which are more temporary and often require regular inspections.
Food service permit: Ensures compliance with health and safety regulations for food preparation
Health Department permit: Necessary to meet sanitation standards
Caterer permit: Specific to catering operations; often linked to health inspections
Can you run a catering business from home?
Running a catering business from home is possible but it depends on local regulations. Some states have "cottage food laws" allowing home-based food sales, but these often restrict food types. Check local health and business regulations for specific requirements.
Ensure your home kitchen meets health standards and obtain necessary permits and licenses. This may include a business license and food handler's permit. Renting a commercial kitchen might be necessary for more complex food preparation.
Is catering a good business?
Catering can be a lucrative venture with careful planning and cost management. Catering businesses often have higher profit margins than traditional restaurants, from 7% to 15% and sometimes 20% or more. Catering also allows for flexibility in the size of operations, which can help manage risk and adapt to market demands.
However, some challenges of catering include fluctuating food costs, intense competition, and seasonal demand fluctuations.
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.