How To Start A Catering Business

Image of a Catered event

How To Start A Catering Business: Are You Aware Of These Issues?

Catering Business Overview:

Your day as a caterer may start very early, with you preparing meals and organizing equipment and vans to drive to party locations.

Parties may be weddings, bar mitzvahs, birthdays, retirements, and so on. After cooking the meals, you will have to transport the food and your staff to the location and begin your setup.

After setting up, you must serve the food according to schedule and finally, everything must be cleaned up and packed up before you leave the party.

Skill Set:

A background in the culinary arts is plus
Party-planning skills are a plus
The knowledge of proper dining etiquette is a must
An eye for decorating
Time management skills
People skills
Common Business Skills

Employee and Job Consideration During The Start-Up Phase or In The Future:

Servers
Cooks
Delivery people
Common staff positions needed to run some businesses

Approximate Daily Hours Needed:

Open for inquiries from 9 am to 5 pm. Actual events, however, may occur during morning, afternoon, and evening hours.

Equipment, Supplies, & Services During Start-up OR In The Future:

Kitchen equipment and utensils
Serving utensils, dishes, and silverware
Mixers, juicers, food blenders
Skillets, pots, pans
Tables and linens
Condiment trays with salt, pepper, sugar, cream, etc.
Means of transportation
Refrigeration unit(s)
Specialty equipment such as panini grills and chocolate fountains
Van or box truck
Office Equipment

Monthly Expenses and Operating Costs To Consider:

In addition to our list of common business expenses, your catering service will require a budget for the ongoing cost of acquiring required the food you will be serving, disposable supplies such as (Sterno cans, possibly plastic ware such as glasses dishes, for casual events, and cleaning supplies.

Licenses:

You will need a food handler’s permit for both you and your employees. If you plan to serve alcoholic beverages, you will also need a liquor license.

See Our Page on Licenses and Permits

Approximate Startup Cost:

If you start out of your home, you may be able to start for around $2,000 USD. However, Entrepreneur Magazine estimates that startup costs can range from $10,000 USD to $50,000 USD.

Tips & Considerations:

Regular checks will be conducted by health officials
Food temperature must be monitored at all times
You must conform to all applicable food service laws
Consider the type of catering you want. Some specialize in weddings. Others may only cook vegan meals. Some run a restaurant in conjunction with catering. There are even franchises such as Café Ala Carte®.
It may take a full day, week, or even month, to prepare for a full-course event. Other events may only require finger foods that only take a few hours to prepare and set up.

Pros and Cons:

The Pros:

There is an opportunity for high revenue
Freedom of being your own boss
A wide variety of creativity in menu planning

The Cons:

You may encounter considerable competition
Working long hours, including holidays
Dealing with people at sometimes stressful special events, like weddings
Staying current with all food service rules and regulations

Type of Customers You Need to Attract:

The types of customers vary greatly. Caterers serve weddings, fundraisers, parties, religious ceremonies like christenings and bar mitzvahs, and many other events. Smaller caterers may serve breakfast or lunches at offices.

Statistics:

According to Inc.com, the catering industry is a $7 billion USD business annually.
A survey done by the National Association of Catering Executives (NACE) reports that in 2010, 44% of their members noticed an increase in business party clients.

For more statistical information, please refer to Valuation Resources and First Research.