California defines a caterer as a business preparing food for clients to eat in the venue of their choice. Starting a catering business in California in your home is an option, but you have a limited range of food that you can legally serve. Working out of a commercial kitchen costs more, but you have greater flexibility.
Home Catering Business License
Starting a catering business in California from home requires you to qualify as a "cottage food" business. There are two classes:
- Class A sells food directly to customers. This includes but isn't limited to sales from your home, bake sales, farmers' markets or via a community agriculture subscription.
- Class B can also sell through restaurants, grocery stores or food trucks and pushcarts.
Both class A and B have to meet state requirements:
- You register with the local environmental health agency for a permit to sell food from home.
- You have only one full-time employee, not counting members of your family.
- You complete a food-processor training course and meet food prep and sanitation requirements for cottage food.
- You provide appropriate labels for the food.
- If you make $50,000 or more in sales, you don't qualify as a cottage food caterer.
As a cottage food business, you can only sell goods that the state considers safe. Baked goods, hot chocolate mix and donuts qualify, for instance, but meat, cheese and fish wouldn't be acceptable.
Selling Prepackaged Food in California
A cottage food business selling prepackaged food in California has to label the packages in compliance with state law. That includes your name and address, the name of the food, a list of ingredients, the weight and a statement that the food came from a home kitchen. Everything has to be written legibly in English.
Standards of Cleanliness
Just like a commercial kitchen, your home catering kitchen has to meet cleanliness standards. Although your local government's health department reviews your permit to sell food from home, the California Food Act sets the standards:
- Utensils and equipment must stay clean and in good repair.
- Keep small children and pets out of the kitchen while you're cooking.
- You have to wash, rinse and sanitize all food-contact surfaces and utensils before each use.
- The food preparation and storage areas have to be free of rodents and insects.
- There's no smoking in the kitchen while you're making food to sell, and nobody with any contagious illness can work with the food.
- You have to wash your hands with drinkable water before making or packaging food.
Using a Commercial Kitchen
If your business vision doesn't fit with a home catering business license, the alternative is a commercial kitchen. Setting up a kitchen of your own is pricey, but you may be able to rent space from an established kitchen part time or cut a deal with a local restaurant to use its kitchen. Sharing space can save costs until your business turns a profit.
Rules for Serving Alcohol
To sell alcohol at an event you're catering requires another permit from the state's Alcohol Beverage Control Board. You apply to the ABC Board for a permit, which may cost from $142 to $976 depending on the population in your area. You'll also have to apply for a permit for each specific event, requesting it at least three days in advance.
Register Your Business
To stay within the law, you have to complete the same paperwork as any other business. That includes registering your business with local government and possibly registering your business name. The exact rules for registration will depend on your local government's ordinances and regulations.
Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com