If you’re a good cook and you like to entertain groups of people, starting a catering business might be just the career choice for you. Everyone needs to eat, and there is no shortage of business and social events that are centered around well-prepared food. Business meetings, weddings and social gatherings are just a few examples of the many different kinds of events that could use your services as a caterer.
Before you go any further with your idea, you’ll want to do some real thinking about what your life as a caterer will look like. It’s one thing to cook for your friends for fun; it’s quite another to put on a huge spread at a fancy event for a large group of people that expect perfection.
It’s still another to do it over and over again with consistency.
Many people who go into business as caterers don’t understand the amount of work that is required. You’ll get up really early most days to handle food prep and cooking, and a lot of your time will be on your feet in the kitchen, working over a hot stove.
At the events themselves, you and your team will be responsible for making sure the food gets transported safely, and that food presentation is flawless and well-executed. As the boss, you’ll spend lots of time supervising others, listening to complaints and fixing problems.
When you’re not cooking, you’ll be handling lots of paperwork – ranging from invoices to payroll, arranging and accepting food deliveries from vendors or doing the shopping yourself. You’ll spend lots of time meeting with clients, planning menus and inquiring about food allergies.
If you hire staff, you’ll be training them, and when you’re not doing any of that, you’ll need to market your business to get some customers.
The places where you choose to cook and serve your food will largely dictate your next moves as a caterer, so you’ll want to carefully decide what you would like that to look like. You’ll be spending a lot of time in those places, and the laws and permits required can be quite complicated, so you’ll want to know the implications of your choices.
You'll need to investigate this thoroughly because many states simply do not allow caterers to use their home kitchen. If yours does, you’ll be required to spend lots of time and money upgrading your kitchen to professional, commercial standards.
As is the case with any professional kitchen, you’ll be subject to health inspections by state and local health department officials to make sure your kitchen is up to par with the required standards. They’ll have a look at your food preparation areas, where you store your food, the equipment you use for cooking and refrigeration and how you handle waste disposal.
For many, when state law allows, the hassle and cost of retrofitting their own home is just not worth it. It makes more sense to look into other options such as commercial kitchens for rent by the hour.
Another option is to open a food truck, which is a new and popular trend in the food industry. This is a really great option if you have a niche food expertise (such as Mexican, ice cream, tacos or who knows what else). You can buy yourself a truck – there are many former food trucks out there already equipped and ready to go – and drive right to where your customers are.
Of course, it’s never quite that easy. On top of the usual concerns, you’ll undertake the extra cost of insuring the vehicle, getting it customized and dealing with any maintenance. That’s before you even start cooking.
Many food trucks fail within the first three years because of poor planning, poor concept and trends that die out, difficult local regulations that make it hard to find a place to park the truck to do business and improper marketing.
On top of that, you’ll be spending your whole day serving food in a small vehicle, on your feet and sweating in a hot environment, especially if you’ll be parked at outdoor events.
You’re probably getting the hint by now that using your home kitchen for a catering business will be too expensive to upgrade or not allowed at all by your state health department.
If you run your business from a food truck, the onboard cooking space will likely not be big enough or equipped to handle a large volume of food preparation or cooking, so you’ll have to look for commercial kitchen space for rent elsewhere if you want to cater large events.
Many caterers choose to go the route of finding a commercial catering kitchen for rent, and there are many available and affordable options. One of the biggest hurdles facing any food service business is finding a licensed commercial kitchen space for rent or commissary kitchen where the food can be produced legally within state and local regulations.
For chains and larger operations, it may be worth it to spend the thousands of dollars to rent and equip a space for their needs, but for smaller operations a shared catering kitchen for rent is usually more cost-effective.
A new trend in the food industry is the growth of shared-use commercial kitchen space for rent where chefs, caterers, food truck owners and other culinary professionals can prepare and cook their food, while giving them the flexibility they need to get out into the world and present their food.
These shared-use kitchens, also referred to as incubator kitchens, may be just the way for you to go if you are just starting out as a professional caterer. Typically, you pay for a membership or commercial kitchen for rent by the hour, and you get to rent out a cooking space alongside other food entrepreneurs – perfect for those who like to socialize or be part of a community space occupied by others.
In addition, you get the benefits of sharing resources such as cold storage, equipment and other cleaning supplies that would otherwise be too expensive.
You’ll still need to have your licenses, liability insurance and permits in place, but a huge part of your business needs will be taken care of by using a commercial kitchen space for rent or finding a commercial kitchen for rent by the hour.
Before you ever step foot in the kitchen, you’ll first want to figure out which laws you will be held to as a caterer. First, decide if you’ll be a sole proprietorship or if the business will be incorporated, which is usually the case if you’re going into business with other people.
It keeps the tax situation separate from your personal finances, and this corporate structure provides limited liability in the event that something goes wrong.
You need to remember that you are going into the food business and there are inherent risks involved. There is always the risk that someone could slip and fall, hurting themselves in the kitchen. If someone gets food poisoning at an event you are catering, you could wind up getting sued. There are knives involved, and hot surfaces, and many other risks, and you want to make sure that your house and other personal assets are free from liability.
Next, you’ll need to name your business and get it registered with the secretary of your state. That way, you’ll have a Tax ID number that will help you secure funding and start a payroll.
You’ll want to start thinking about creating a business and marketing plans at this point, as lenders and any investors will want to know how you’re going to make money in this venture. Business plans are essential in setting a road map to finding business success.
Shop around for some good liability insurance at this point, because as you are going into a risky business venture, you’ll want to make sure that you’re protected in case something goes wrong.
Try to find an insurer with experience in the food service business; they’ll be able to give you advice dealing with risks ranging from slipping and falling while serving guests, transportation accidents, and yes, the occasional food poisoning incident.
Once you have your business operations up and running, it’s time to finalize any permits you’ll need and start drawing up contracts for the business you get. A good employment lawyer can help you develop a written contract that you can have your clients sign before beginning work that will cover any potential legal issues, and usually you can modify the contract for any relevant circumstances related to individual clients.
Next, think about any special permits – other than your business license – that you may need so you don’t run into hardships later. Do you, for instance, need any local, county or city-based licenses in the area where you will be catering? If you’re doing an event in a location for one night, in another state for example, will you need a temporary permit? If you’re serving food at a festival, or on premises at a private venue, you may need a separate permit for that.
Don’t assume anything – always ask ahead.
Lastly, if you’ll be running a bar service, you’ll need to apply for any applicable liquor permits, both to serve alcohol to guests and also to employ people who will be serving the alcohol. Many catering clients expect liquor to be served at their events, so it’s a good idea to get these licenses so you won’t have to hire alcohol service separately. In many cases, you can charge extra for alcohol service.
At last, you’ve got your ideas in place, your licenses settled and your business up and running. Now, it’s time to buy any catering equipment you’ll need for serving your food and putting on a good show for your clients.
Search Amazon and visit restaurant-supply warehouses to find deals on equipment such as serving spoons, silverware, plates, warming trays and anything else you’ll need to serve your food. You may even need to rent a small storage space to hold everything, and perhaps a van to get everything to the venue.
Lastly, and maybe most importantly, take some time to promote and market your business. Make sure you have business cards printed that you can give out to guests at the events you cater.
It never hurts to have a website, or to start a blog, and you can also drum up a lot of attention with posts on Facebook or photos on Instagram of the food you serve and people enjoying themselves at the events you cook for.