The catering business is an exciting venture, especially for those who are passionate about food and hospitality. Over the past decade, there has been a growing demand for catered events such as weddings, baby showers, birthdays, corporate events, private parties, etc. In this article, we’ll explain how to start a catering business step-by-step.
Anyone can start a catering business. It does not matter what your education is or what you do. Starting this business is super easy and by the end of this article, you will be equipped with all the knowledge that you need to confidently launch your business and make it successful.
Table of Contents
1. Research Your Niche and Make a Business Plan
Like any other business, research is extremely important when you think of starting a catering business. It is important to define a niche you want to work in and then research your target market related to that niche.
This will help in shaping your services and the strategies you will need to efficiently promote your business. The target market for a catering business could consist of corporate events, weddings, birthday parties, etc and each one of them has its own preferences, needs, and budgets that will need to be considered.
After the target audience has been identified, it is time to decide the niche within the catering industry. Now it could be anything. Maybe you want to offer buffet-style service for casual gatherings or plated gourmet meals for upscale gatherings. You can also focus on doing themed catering such as serving ethnic dishes or seasonal dishes. This will not only help you stand out amongst your competition but also enhance your menu and branding.Â
After this, study your competitors and see what the caterers in your area are doing like what kind of services they offer. How do they promote themselves?
This will help you in seeing any gaps in the market and catering your niche according to that. All of this will lay out a solid foundation making it easy for you to start your catering business.
A business plan usually consists of an executive summary, and a market study to identify the target audience and the type of services you wish to offer followed by your pricing and marketing strategies.
After deciding on your services, you should develop a pricing strategy that consists of food costs, labor, and market rates. Then create a a marketing plan that defines the way you will attract clients.
2. Select Your Business Name and Create a Logo
Selecting the right business name is a really important step in how to start a catering business. You should choose a name that will reflect your brand’s value, niche, or the type of services you will be offering.
After thoroughly checking that the name you have decided is not taken by any other business, focus on designing a professional logo that will reflect your brand’s value. You can do this yourself by using templates from Canva.
Then register your domain. Your website and email should match as this helps in adding credibility to your business’s online presence.
If you are starting a business for the first time, here is a detailed guide on how to start a business. This guide includes all the essentials steps which are required to start a business.
3. Register the Business And Get an EIN Number
Before starting any business, it is essential to get it registered. For this, you will have to decide if you want to register your business as a sole proprietorship, LLC, or a corporation.
After choosing the structure, it is time to register the business with the state to complete the legal process and to ensure that the business complies with the laws and regulations of your particular country. After this apply for Employer Identification Number (EIN) from the IRS.
Registering your business and getting an EIN are essential steps. Â
4. Arrange All Licenses And Permits
When anyone thinks about how to start a catering business, the first thing that comes to mind is how to obtain the different permits and licenses required to start a business.
Generally, you will need to get a food handler’s permit which is required by anyone dealing with a food business. Then you will also need to check with your local government to see if you need a catering license.
Then you will need a business license to start your business in your city or state. After that, you will also need to get the health department permits which ensure that your kitchen or feed meets the necessary sanitation and safety standards.
Here is an article, that explains the 10 types of permits and licenses needed to start a catering business.
5. Find a Kitchen Space
If you are starting a small business then you will not need to find any space to run your kitchen as you can prepare food in your home but if you are looking to start your catering business on a large scale, you will need to find a location where you can set your commercial kitchen. It is also necessary in most cases to comply with safety regulations.
Commercial kitchens have the right kind of equipment that meets the legal requirements of preparing large batches of food. If you don’t have the money to buy a place, consider renting the space.
Many restaurants rent their kitchen space during their off hours. This is a cost-effective method as it can save you a lot of money especially. This will help you cut costs especially when you are thinking about how to start a catering business and save money in the beginning,
6. Get the necessary Kitchen Supplies and Equipment
To start a catering business, your kitchen will need to be equipped with a couple of things like food warmers, serving trays, pots, pans, and other things to prepare the dishes efficiently.
You will also need some sort of vehicle such as a van or a small truck to transport large quantities of food safely from one place to another. Vehicles that have refrigeration and heating options will need to be sourced for your business.
Additionally, you will also need to sort the packaging and storage for your food and for this, you will need to invest in reliable food containers and storage racks.
When anyone thinks about how to start a catering business, they don’t usually pay attention to these minor details, and later on, these things often end up affecting the budget.
7. Create Your Menu
This is where the fun begins. All the work that you did at the start while making a business plan will be put to good use when you sit down to create your menu.
You are well aware of the gaps in the market and what customers want. Start by creating a diverse menu that caters to various gatherings such as birthday parties, weddings, corporate events, private parties, etc.
To create a menu that is loved by the majority, go to tasting events and get your dishes tested. This will allow you to enhance your flavors and adjust everything accordingly.
To make your catering business successful, make sure to consider all dietary restrictions while making your menu. Some people love gluten-free meals or are vegan by choice so your menu should accommodate all guests. Your menu should be designed in such a way that it caters to every person. This will be the backbone of your business. All of these steps are essential when thinking about how to start a catering business.
8. Set Prices for Your Menu and Packages
You should include all costs such as raw material, labor, overheads, delivery, transportation, and marketing costs when you sit down to set your prices.
After fully accounting for all costs and setting profitable prices, focus on creating unique packages that cater to different event sizes and budgets. You can create service packages like basic, premium, and luxury which can help in attracting a wide range of clients.
One of the most important steps when wondering how to start a catering business is to set a price that will leave you with a good margin.
9. Arrange Funds
If you already have an investment set aside then you don’t need to do anything. But if you don’t have any investment, consider taking loans from family members.
If that is not an option, take small business loans or look for partners who can bring in the investment. Here is a detailed guide on how you can arrange funds to start your business.
10. Promote Your Catering Business
After doing all of this, it’s time to start promoting your catering business. Choose a marketing strategy after carefully assessing your competitors.
You should start by building a professional SEO-optimized website that clearly shows your services, menus, location, and contact information. Your website is your digital office so take your time in creating this. It should be unique and differentiate you from your competitors by highlighting what differentiates you from others.
After this, start your social media marketing by creating your business profiles on Instagram, TikTok, Facebook, and LinkedIn. Regularly post mouthwatering images of your food and engage with your audience to build trust.
Also, build relationships by networking with others. You can do this by attending local events and food affairs to get your name out and by interacting with others. All of this will help you in getting your business started.
11. Hire and Train Your Staff
When you start a catering business, you will need some staff to help you out. Even a small event will require some labor so you will need to hire and train staff so that your daily operations can run smoothly.
You should begin by hiring trained chefs, servers, and delivery staff who have some experience in the catering industry. Once you have such your staff, train them how you would like them to work.
Then move towards creating a clear plan that would explain how you would like your daily operations to be run. For example, what is the process for booking? Who is responsible for food preparation? This will clear any confusion and streamline the workflow.
12. Launch Your Business
Now you are done with everything and it’s time to open your doors for everyone. Set aside some investment and host a launch event to showcase your offerings.
You should invite friends, family, and local businesses to show your services. This is not just a chance to show off your delicious dishes in fact it’s also an opportunity to create buzz and get word-of-mouth referrals within your local community.
To make your launch even more lucrative you can consider offering special deals for early bookings. This can consist of discounted rates or some complimentary add-ons.
All of this can help you in starting a successful catering business.
Frequently Asked Questions
How to start a catering business from home?
To start a catering business from home, you need to check if home-based catering is allowed in your area. Then create a business plan, get the necessary permits like a food handler’s permit and business license, and set up your kitchen accordingly that meets safety standards. Once it’s all done, develop a menu and market your services through social media by posting videos and photos to get clients.
How to start a catering business with no money?
To start a catering business with no money, you need to use existing resources. Start by offering services from your home kitchen to minimize overhead, and rent the equipment as needed. For marketing use social media platforms.
How much does it cost to start a catering business?
The cost to start a catering business depends on different factors like location, size of business, etc. On average, it can range from $10,000 to $50,000 to set up a catering business. This includes all expenses like marketing, rent, permits, equipment needed, etc.
How to start a small catering business?
To start a small catering business, you should start by identifying your target market and niche, such as corporate events or private parties. Then move towards creating a business plan and obtain necessary licenses and permits Set up a kitchen that meets health regulations, develop a small menu that’s easy to manage from home, purchase essential equipment, and start marketing through social media and local networks.Â
Conclusion
If you are still wondering how to start a catering business, you need to stop and just take the first step. Doing anything for the first time is scary but you don’t know how you will do unless you start doing that thing.
Every business starts with a dream or a plan to gain financial liberty and to break free from the 9-5 slavery. Follow this detailed step-by-step guide about starting a catering business and scaling it further.
The food and hospitality industry will never go out of trend so starting a catering business is a great option. This industry will always remain in trend as people will not stop having events.
If starting a business seems too overwhelming right now, you can always start with something small like a side hustle that can later on be scaled into a full-time business.