There are many reasons you may want to start a catering business. Maybe you are fresh out of culinary school and are looking for your first job. Maybe you want to expand your restaurant business and get some extra income. You may just have a passion for providing food for your friends’ dinner parties and events. In any case, the question is: “How to start a catering business?” Catering set up may present some challenges. That’s why here we bring you the 5 crucial steps that will get you on your way to set up a thriving catering business.
How to Start a Catering Business – 5 Steps
Follow these steps on how to start a catering business to make sure you comply with the law and you head for success:
1. Research The Rules and Regulations in Your State
The least fun but most important aspect of catering set up is ensuring your business follows all local rules and regulations.
The key question is, Do you need a license to start a catering business? To operate any type of food establishment, regardless of the size or the food it serves, you need a Food Establishment License. The Department of Health in your state is the institution providing this license. Also, if you hire staff, they must have received training for Food Certification.
There may be more licenses required depending on your establishment and the state where you are opening your catering business. It is simply impossible to tell you every regulation of every city and state, so you’ll need to do some research. Most cities have online resources regarding the regulations to open a catering business.
2. Build Your Menu
When you want to start a catering business you need to create a cohesive and comprehensive menu. Delicious food is key in your catering set up. Obviously, you will want to include dishes that you and your employees are comfortable cooking. However, for the best results, you may need to research other catering businesses in the area, so yours can offer unique and different dishes. Consider basing your menu on some sort of theme, preferably one that is not present in any other catering businesses in your area. Check here additional tips on menu prices and menu design.
3. Take Care of The Finances
How to start a catering business? First, by making sure that you have the proper funds. The question “How much will it cost me?” is probably the most important one in your catering set up. Learn here how to calculate the costs and expenses of any restaurant business. One key factor to have in mind when thinking about finances is the number of employees you will hire. That will determine the type of business you are, which matters when filing your taxes. You will also need to figure out a way to keep records of your sales and set up how you are paying for your ingredients. A POS, or Point Of Sales System, is a great tool to manage the finances of your catering business.
4. Choose The Right Transportation
Many catering businesses set up some delivery system or even cook the food on site. This requires some consideration. How are you going to transport food? Even if you have a large vehicle, you may need to rent or purchase a large van in order to get all the food to your destination. Probably you will also need to transport your cooking equipment, tables, and containers for the food. How you set up your transportation will differ depending on your goals, so you will have to carefully consider all of your options.
5. Advertise Your Catering Business!
Your catering set up may involve a lot of work, and you certainly don’t want it all to go to waste! In order to have a successful catering business, you need to know how to advertise effectively. Consider holding a big event for your opening and advertising through flyers, social media, and word of mouth. By getting a large group of people to try your food, you can get new customers and build your customer network. You can even begin talking to restaurants and other businesses in the area, and see if there is any need for catering services. The important thing is that you are proactive in trying to find clients. It may be a lot of work, but it will surely pay off when those orders start flying in.
Other FAQs on Catering Set-Up
Catering set-up involves many other factors and considerations. Make sure you check this list before starting your catering business:
How much does it cost to start a catering business? Your start-up costs will vary widely depending on the size of your initial catering business, the resources you already have to start, and your state’s requirements for selling food made from home. Expect to invest $10,000 to $50,000 to set up a professional catering business. However, if you start with small events or focusing only on part of the menu (like cakes and desserts), you can open your catering business for less.
Do caterers serve the food? Yes. Your catering business should coordinate not only the preparation of the food but also the delivery and the presentation of food for clients. This means you have to create a team of servers for your company (the number will depend on the size of your business and the size and nature of the event your catering for). Of course, you don’t need to hire full-time employees for this task Simply have a list of independent contractors or even students you know you can rely on when you are organizing your next event. Chances are you’ll need to increase the size of your team during the peak season (which for most catering business stretches from April to July). Make sure you read How to hire employees for the peak season.
How much money can you make as a caterer? It will depend on the nature of your business and your location. Sokanu.com estimates the average salary for caterers in the U.S. in $48,000. As a starting catering business, you can expect to earn about $30,000, while high-end caterers and established businesses often can earn up to $80,000.
What is needed for catering besides the requirements mentioned above? Have in mind all the additional responsibilities involved in a catering business, since they go way beyond preparing and delivering the food. Decorations, furniture, tents for outdoor events, utensils, etc. have to be accounted for. A comprehensive catering business will also take care of the music, lighting, and clean-up.
We hope you have obtained a good insight on how to start a catering business. Subscribe to the Camino Financial newsletter to receive weekly tips and resources that will help you better manage your restaurant business.