How to Start a Catering Business: A Practical Guide
If you’re a culinary genius in the kitchen and love sharing your food with others, why not take the next steps and start your own catering business?
A catering business is an excellent investment if you’ve got what it takes – the initial overheads are lower than opening a restaurant and you can decide to expand at your own pace. Something to bear in mind, however, is that the competition in the catering industry can be quite fierce, so planning your business carefully is key.
Let’s go over what you’ll need to do to ensure that your catering company hits the ground running.
Making an Inventory
The first thing you’ll need to do is make a list of everything you will need to start your catering company. Start by listing what you already have and what you’ll need to purchase.
This list should include everything from equipment to packaging. For instance, you might need to purchase a chest freezer to store frozen items in, and you’ll also need disposable containers for soup, platters for sandwiches, etc. You’ll also need warming trays to keep food hot when you serve food at events.
Choosing a Niche
Once you’ve made a list and have an idea of what equipment and other items you’ll need to purchase, you should do some market research.
Choosing a niche that will set you apart from your competitors early on will ensure that you have less competition and that you don’t stretch yourself too thin trying to cater for every event in your area.
There are many different catering niches to choose from – the main niches are weddings, school events, adult parties, children’s parties, sports events, festivals, or corporate events.
The niche you choose should suit the type of food you specialize in. For instance, if you enjoy catering for light lunches by making pastries and sandwiches, you should choose a niche that supports that – like daytime events such as corporate events or school functions. If you prefer cooking gourmet appetizers and fine dinners, consider adult parties or weddings.
Drafting a Menu
When you know what niche your company will be catering to, you can begin to draft your menu.
When planning your menu, it’s essential to consider your target demographic and what you know how to cook. Make sure you offer enough options (including vegetarian and other dietary restrictions) but don’t make your menu too big or rely on ingredients that are costly or difficult to source.
Once you’re happy with your menu, test it out and modify recipes as needed.
Creating a Business Plan
Your business plan is vital for your business to succeed – and the more detail you put in, the better. Create an outline of your mission statement and detail how you plan to differentiate yourself in the industry and make a profit.
Your business plan will help you keep track of your goals and help attract investors if you need funding.
Once you’ve drafted your menu and made changes accordingly, you’ll know what ingredients you’ll need for your dishes. In the early phase of your business, you may be able to get your ingredients from a wholesale club to save on costs.
However, when your business starts to grow, you should look into establishing business relationships with local farmers, food service vendors, and restaurant suppliers. This will help you reduce your costs further when you buy in bulk.
Finding a Space for Food Prep
Unfortunately, using your kitchen for food prep may be against the law in your state. Contact your local health department to enquire about regulations, inspections, and permits to be sure.
If operating a catering company from your home is illegal in your state, you’ll need to rent a space. You can either rent a commercial kitchen full-time or on an as-needed basis. The upside to renting a commercial kitchen is that you won’t need to purchase equipment.
Calculating Startup Costs
Before opening your business, make a list of your expenses. This list should include the cost of rent (if applicable), serving and industrial equipment, transportation, payroll, registration costs, and business insurance.
Customize the list to what is applicable in your business – for example, if you are not serving desserts, you won’t need specialized pastry or baking equipment. If you will be serving deep-fried food, you will need to purchase or rent at least one deep fryer.
Once you have completed your list, shop around for the equipment you need. Compare prices online and at specialized kitchen stores to find the best prices. When you know how much money you’ll need to invest, add 30% onto the figure to safeguard against emergencies.
Registering Your Business
Before you start your catering business, the final step is to register it. Decide on a strong name that represents your brand and check your Secretary of State’s website to make sure it hasn’t already been taken.
Next, you will need to decide on your business structure. Your business structure will determine your personal liability if anything should go wrong and dictate how your business will be taxed, so choose wisely. It’s a good idea to consult an attorney to discuss your options.