How To Start A Catering Business

If you are a person who is equally passionate about a) food, and b) owning your own business, getting into the catering industry can be a great way to marry your two passions and start a small business you’re excited about.

But if you’ve never launched a business before, you might not know where to start. What steps do you have to take to successfully launch a catering company? How do you get the word out about your new venture? And how can you ensure that your food business is sustainable in the long-term?

Let’s take a look at a step-by-guide for starting your own catering company so you have everything you need to build a business that not only allows you to make amazing food, but to make a profit at the same time.

Choose Your Niche

The term “catering” can be used to describe a number of different business types and services. So, the very first step in building a successful catering business? Choosing your niche — and figuring out what kind of catering services your business is going to offer.

If you’re not sure what you want your business to focus on, there are a few questions you’ll want to ask yourself, including:

• What Type Of Food Will My Business Specialize In? Is there a particular food type or dietary category you want to specialize in (for example, gluten-free or vegan)? Specializing in a certain food category can help you stand out to clients looking for that type of cuisine — and make it easier to get hired by those clients.
• What Kind Of Clients And Events Will My Business Serve? There are a huge variety of clients and venues that need catering services — and knowing what types of clients and venues you want to serve can help you narrow down your niche and better speak to those clients and venues. For example, do you want to create menus for corporate events — or do you want to specialize in weddings? Do you want to cater upscale cocktail parties — or focus on children’s birthday parties? 
• What Do I Do Better Than Anyone Else? There are plenty of niches to explore — but if you really want your business to be successful, you should build it around a niche where you already excel. For example, if your expertise is in high-end desserts, you should definitely consider building a catering business around sweets — instead of trying to be a “jack of all trades” and building a menu around appetizers and savory dishes.

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The point is, there are tons of different niches you can explore when building your catering business — and before you get too far into the business-building process, it’s important to decide which niche and business type is the right fit for you.

Create A Plan For Your Company

Every successful business starts with a business plan — and that includes catering businesses. So, once you’ve decided what type of catering company you want to build, the next step in the process is drafting a plan for your company.

Think of your business plan as a roadmap; it gives you clear direction on how to get from where you are now (a business idea) to where you’re trying to go (a successful, profitable business).

But what, exactly, does that roadmap entail? Your plan should include detailed information about starting and growing your business, including:

• Business Name. What are you going to name your business — and how does that name represent your brand?
• Target Market. Who are your potential customers? What are their catering needs? Where are they currently getting those needs filled?
• Competitor Analysis. Who are your biggest competitors in the market? What kind of market share do they have? How are you going to differentiate yourself from those competitors and convince customers they should work with you?
• Business Location. What kind of kitchen space are you going to use to prepare the food for your catering business? For example, are you going to cook from your home kitchen or are you going to rent commercial kitchen space?
• Equipment And Supply Needs. What kind of catering equipment do you need to get started? What kind of supplies do you need, whether you’re stocking your own kitchen pantry or renting a commercial space?
• Start-Up Budget. What are your startup costs? What funding sources are available to you (for example, are you going to pursue private investors, apply for a small business loan from the Small Business Administration, or fund the business through your own personal savings)? And how you are planning to spend your start-up capital to get your business off the ground? 
• Catering Services And Pricing Structure. What services are you going to offer your clients — and how are you going to price those services? For example, are you going to charge clients an hourly fee or are you going to charge by food item?
• Operational Strategy. How are you planning to operate and manage your business?
• Caterers And Catering Staff Needs. Who do you need to hire in order to get your business off the ground? How many caterers do you need to hire? How do you plan to hire, build, and train your team?
• Marketing Strategy. How are you going to get the word out about your catering business and find new clients?
• Revenue Goals. What are your revenue goals? How much revenue do you need to bring in in order to cover your costs and drive profit?

Crafting a business plan takes time. But a detailed plan is an absolute must if you want to set your business up for success in the long run — so make sure you invest the time into creating as detailed a business plan as possible.

Take Care Of The Legal Side Of Starting A Business

Once you have a plan for your business in place, you’ll want to take care of the legal side of launching and running a catering business. 

So what, exactly, does that entail? Some steps you’ll want to take to legally establish your business include:

• Choose Your Business Structure And Register Your Business. There are a number of different ways to structure your business; for example, if you’re a one-person catering operation, you may choose to structure your business as a sole proprietorship — or you may decide a limited liability company (LLC) makes more sense. Whatever business structure you choose, it’s important to take any necessary steps to legally establish your business and register it through the proper channels.
• Get Licensed And Insured. As a caterer, there are certain licenses you’ll need to operate — like a business license and a liquor license (if you want the ability to serve alcohol at events). In addition to getting licensed, you’ll also want to get liability insurance to protect your business.
• Open Up Business Bank Accounts. One big mistake rookie business owners make is mixing their personal finances and their business finances, which can make for a huge headache come tax time. Make sure to establish business bank accounts from the get-go — and keep all business expenses and financials separate from your personal accounts.
  

Stock Up On Equipment And Supplies

When you draft your business plan, you’ll identify all the cooking equipment and supplies you’ll need to launch your catering business — and once you’ve legally established your business, your next step is to get out there and get that equipment and supplies.

Depending on your budget, you may want to start off by only securing the equipment and supplies that are absolutely necessary to get your business off the ground — and then continue to build your inventory as you land more clients. Or, you may choose to rent a space that’s equipped with everything you need — and instead of purchasing the equipment and supplies yourself, just roll the cost into your monthly rental fee.

In addition to the equipment and supplies you’ll need for food prep and serving, you should also think about the tools you’ll need to effectively manage your business. For example, if you want your clients to be able to pay for your catering services with a credit card, you’ll need to invest in an online payment platform or a mobile payment solution. If you want to track your client invoices and business expenses, you’ll need to invest in a bookkeeping software. If you’re planning on hiring caterers, a sous chef, or other staff, you’ll want to invest in a payroll and time tracking tool that will allow you to keep track of employee hours, and make sure your team gets paid accurately and on-time.

However you decide to manage the process, having the equipment, supplies, and tools on hand that you’ll need to a) prepare food and cater for your clients, and b) successfully manage your company is a must before you start marketing your business — so make sure you have everything you need before you officially launch your catering company to the public.

Hire And Train Staff

If you’re planning on building a team, you’ll also need to go through the process of hiring and training staff.

Depending on your business model and the types of clients, events, and venues you serve, staff you may want to consider hiring for your catering business include:

• Chefs
• Catering Managers
• Servers
• Bussers
• Bartenders
• Food Stylists

Because your staff will be handling food, training is extremely important to ensure the safety of your clients. This includes training on food preparation, food handling, food safety, and food waste. There may be additional trainings your state or local jurisdiction requires for businesses in the food service industry; check with your health department and make sure you provide any required trainings for your staff. 

Get The Word Out

You have your plan, your catering equipment, and your staff. You’re ready to start taking on clients and catering jobs.

So, it’s time to start marketing.

There are a number of different ways to spread the word about your business, including:

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• Social Media. Social media is a great way to connect with potential clients in your area — particularly localized social media apps like NextDoor.
• Advertising. Online advertising (like Facebook Ads or Google Ads) can help to build your online presence, target your ideal customers, and drive buzz and interest around  your business. Depending on your audience, you could also explore traditional advertising, like buying an ad in your local newspaper or posting flyers at local businesses.
• Word Of Mouth. One of the best ways to land new clients is through a recommendation from an existing client. As you build your catering company, offer your existing clients incentives for referring new business, like discounts or referral commissions. You can also ask existing clients to write reviews for your website and on third-party review sites like Yelp or Google Reviews to help build your reputation and attract new clients.

Bottom line? As you’re getting your catering business off the ground, you need to spread the word to as many potential clients as possible — so it’s important to focus on building and implementing a robust marketing strategy.

Get Out There And Start Your Catering Business

Launching a new business can be daunting. But now that you know everything you need to know about starting a catering company, what is left to do? Get out there and build your business!