Does a fire ignite inside you whenever you think about cooking or baking? Are people always telling you that you make the best food? Are you the go-to person who cooks and bakes for local events? Becoming a catering industry professional may be in your future.
Starting a new catering business from home can seem impossible at first glance, particularly when you don’t know where to start. But EventPro has your back! We’ll walk you through all of the steps to help get you on your way to success.
Starting your own business comes with a lot of work and startup costs, but if you devise a strong business strategy from the beginning, procuring a business license, following legal considerations, and finding potential customers is easier to handle.
Specialization is essential for your catering company to succeed. You don’t want to overextend your capabilities and services, so choose one or two niches and hone your skills. The type of events you could cater include:
Bear in mind that the type of food you make will dictate your niche. If you love to prepare fancier dishes, weddings, adult parties, and festivals are the events to consider. If you prefer making lighter meals, such as salads and sandwiches, look at corporate, sports, and school events. If you want to focus solely on baking, children’s parties and parish events are great areas to pursue.
With your niches in mind, do market research to determine the competition you will be up against and whether or not the market is saturated. If you’re determined to join the many competitors in your region, you will have to have something that makes you stand out, such as the type of food you serve or unique services. You will want to review what competitors offer and their reviews to see if customers complain about a lack of anything.
Your business plan will outline the current and future goals of your home-based catering business. Business plans are useful (and required) when applying for a loan. You will need to provide many details, including:
A business plan helps catering businesses to stay on track and accomplish their goals. It’s also required when applying for loans.
Food businesses need to keep their target demographics in mind when designing their menu. It’s also important to measure that against the food preparation you’re used to doing. Variety is an essential part of the menu to prevent customers from being bored with your offerings. You also must provide a good amount of items. Too many or too few affects the success of your business.
Pricing will be determined by the following:
Since costs change with each passing year and in each city, you will need to do local research to crunch relevant numbers.
The menu will provide you with the ingredients you will need to get. As you’re ramping up business, you can start by purchasing from a wholesale club. But you will want to start frequenting the local farmer’s market and build relationships with restaurant suppliers and food service vendors. Buying ingredients in bulk at reduced prices will limit the strain on your wallet.
Some states in the U.S. do not allow individuals to operate a catering business using their residential kitchen. This means that you will have to rent space and new catering equipment at a commercial kitchen for off-site food production that meets regulatory standards set by your local health department. It’s a best practice to contact your health department to get all of the information you need about all kinds of requirements, such as inspections, permits, and insurance.
It’s recommended to search through listings to find a space if you have a full-time home-based catering business. Going this route means that you will need to invest in cooking equipment and ensure that you have enough space to prepare food and store it for a large number of people. If you’re planning to cater events on weekends or once in a while, you can speak with your local restaurants, church, or community centres about renting their space for several hours.
As we mentioned in the prior steps, there are various factors that require money when starting a catering business:
Research the prices for the items you need. Once you have the big picture of the funding you need, add 30% as a security measure. A successful business is prepared for emergencies.
When registering with your country, province/state and municipality, you need to decide on an eye-catching business name. Take your time to find the right one since it will be the name on your catering vehicles and all of your marketing materials. Check your state or province’s website to ensure that your business name is available for your use.
As mentioned in Step 2, there are various business structures that you can select, such as:
The business structure determines how you will be taxed and personal liability for all debts collected by your business entity. Does your catering business have more than one owner? What are your plans for the business’ future? Consult your business plan and speak with an accountant or attorney, so they may review it and provide recommendations.
With your business structure selected, register with your province or state where your food business operates. Many food businesses forget to register with each state in which they plan to operate when they expand the reach of their catering services. Remember that there will be an application fee and other registration costs. U.S. citizens will receive an Employer Identification Number (EIN) from the IRS, which is required for every food business with employees.
If you start a catering business that will offer alcohol, you need a liquor license. Your local health department and other authorities will request that you procure other permits and licenses for:
Remember that you will also need to pay the applicable fees for the permits and licenses.
Cooking and serving food means that your small business will have inspections. The health inspector will be looking at a myriad of factors, including:
Inspections will be scheduled and spontaneous, which means that your kitchen space must be kept clean and organized.
Wedding caterers and other professionals in the industry need insurance to protect their investment. Here are a few insurance options to look into:
Beware that your homeowners insurance coverage may change since you will be operating your catering business out of your home. Speak with a local insurance agent to learn about your province or state’s laws, so you can purchase a customized policy for your catering business.
If you don’t want to use your personal bank account to pay for your business’ expenses and costs, there are other options out there to help you get started. You can use one or more of these options at a time:
We hope that you find this guide helpful as you begin catering for your local events. You can always make changes as your business grows.
When you’re all set up and about to look for potential customers, make sure you’re ready to handle them. EventPro’s catering management software offers many features that simplify the planning of large and small events, from invoicing to communication to CRM.
Worry less about business operations and more about your delicious food. Whether you offer bento, sit-down, or buffet-style catering, EventPro software keeps everything organized and at your fingertips to save time and avoid unnecessary frustration.
Book a demo today to use for your catering services!