How to Start a Catering Business

Ready to be your own boss? Do you have a passion for cooking, entertaining, and event planning? Try catering!

Having your own company is appealing, and there are lots of benefits to it, but it does not come without hard work and attention to detail. If you have good management and organizational skills, and enjoy being creative in the kitchen, a catering business might be just up your alley.

Catering is one way to break into the food and hospitality industry without needing a brick and mortar location, rigid hours, or massive overhead costs. In many ways, it is a more affordable, flexible, and lower-risk business venture than opening a restaurant.

However, there is still significant work, time, and money that need to be invested in order to build a successful catering business of your own. Before you get rolling on your business journey, here are a few things to consider.

Nail Down Your Catering Concept

You need to hash out the “what” before you can figure out the “how.” This may change and evolve depending on the “how” and other experiences, but it is good to have a rough outline to go on for your catering business. Are you going to have a niche cuisine or a niche clientèle? Does your catering business have a theme?

Have fun getting creative and coming up with a name that is catchy and reflects your vision for the company.

What’s Your Menu?

You don’t have to finalize anything until later down the road, but figure out what your specialty will be, or what cuisine and types of food you’ll serve. It’s important to find your niche, but also include some versatility to accommodate different palates and dietary needs.

The types of food you serve might also vary depending on local trends, types of events you cater (such as weddings vs. business lunches) and competition in your area.

Don’t forget to consider how you would like to serve your food. Would you like to stick to buffet style only, or will you offer plated meals, or cocktails with small cocktail food items?

Where Will You Cook?

Will you be cooking on-site or off-site? On-site means you’ll bring the ingredients and cook them in a kitchen at the event venue. Off-site cooking consists of doing most, or all, the cooking at home or at your brick-and-mortar location and then transporting it to the event.

Both on-site and off-site cooking is going to require planning and organization. If you opt for on-site, you are at the mercy of the venue and what space and equipment is available there. Make sure to figure out what you’re going to be working with prior to the event so that you are properly prepped and prepared the day of.

If you opt for off-site cooking, you will need to secure a spot for the prep and cooking prior to the event. You can utilize sites like your home kitchen (with the proper permits, of course), or a commercial kitchen such as a rented ghost kitchen. Don’t forget to plan for the proper transportation of the food from the off-site cooking location to the event.

Decide What You’re Capable of and What You’re Willing To Do

There are a lot of questions to ask yourself before putting together a business plan. Think about what your dream catering business would look like, but also be realistic about what you can accomplish and how much time, money, and energy you're willing to put in to get there and stay there.

• Is this going to be a full-time or part-time gig?

• Will you have employees or is it just you?

• How long will each catering event take you?

• Do you want to focus on catering for specific events (weddings, birthday parties, corporate events, etc.)?

• How large of events can you handle with your kitchen and manpower?

• How much will you charge?

• Also, what can you cook well?

You can have anything you want, but you can’t have everything you want. Prioritize what is most important to you while still thinking practically about the business endeavor.

Money Matters

While cooking and entertaining may be a passion, catering is a business. It is important to treat it like one. Of course, we hope you have fun working in catering, but at the end of the day, it is your career and your means of making a living. Having a plan when it comes to the financial side of the business will help ensure your security and profit margin.

Secure Funding

Even though starting a catering business is less expensive than starting a brick-and-mortar restaurant, there will be significant overhead costs, like equipment, ingredients, permits, etc. Create a plan and a budget as to how you are going to pay for all this.

With some research and time invested, you can secure a business loan, an investor, save to fund with your own personal money, or any combination of these options.

Create a Financial Plan

Once you have the appropriate funding, you should create a financial plan for the business for when it is operating. Do some diligent research and ask yourself some questions like:

• What are your food costs?

• How much will each job cost you, overall?

• What can you realistically charge to make a decent profit margin?

• What are standard rates for catering in your area?

• What are other catering companies charging?

Once you’ve answered these questions you should be better prepared to draw up your own business plan taking into consideration how much you will spend on a typical catering job and what you can charge for your services.

How are You Going to Market?

You’re starting out as a small business, perhaps you want to stay that way, perhaps you want to grow significantly, either way you need to market your business in order to attract potential customers. Networking and word of mouth is great, social media too, but depending on your situation and goals, it might be worthwhile to create additional marketing strategies.

Get the Correct Licenses and Permits

You can’t legally start working until you’ve acquired all the correct permits. You’ll need both business licenses and working permits along with various food and beverage certifications.

The correct permits will vary state to state. For example, some states require caterers to obtain a liquor license, some do not. Make sure you check your own state’s catering requirements.

Permits for Starting a Catering Business in Arizona

In Arizona, you need:

• A public health permit

• General business permit

• Doing business as (DBA)

• Employer identification number

• Home occupation permit

• Caterer permit

• Building health permit

• Food handler’s permit

• Catering business insurance

• Catering license

Yes, this all costs money, so keep that in mind and budget both money and time for everything. You will be dealing with the health department and other government organizations.

Learn the Secrets of the Caterer

The Regional Economic Development Center (REDC) at Yavapai College is a resource center committed to educating and nurturing professionals, job seekers, and growing businesses in Arizona. We provide a wide array of learning and career opportunities for individuals while strengthening the community and its economy in the process.

REDC has even more resources to get your budding catering business off the ground. Secrets of the Caterer is a short and affordable course teaching you how to develop and hone in on your cooking and party planning skills to create a successful catering business. Everything from the fundamentals to cooking for large crowds and working with clients will be covered by a seasoned caterer who knows the ins and outs of the catering industry.

To learn the basic skills every caterer should know, sign up for the REDC catering course today.