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, organizing and loading equipment, and food into vans to drive to party locations. Parties may be weddings, graduations, events, engagements, bar mitzvahs, birthdays, retirement parties, etc.
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 culinary arts.
- Party-planning skills.
- The knowledge of proper dining etiquette.
- An eye for decorating.
- Time management skills.
- People skills.
- Common Business Skills.
Employee Considerations:
- Servers
- Cooks
- Delivery people
- Common staff positions needed to run some businesses
Hours of Operation:
Open for inquiries from 9 am to 5 pm. Actual events, may anytime, but usually in the afternoon and evening.
Equipment and Supplies
- Kitchen equipment and utensils
- Serving utensils, dishes, and silverware
- Mixers, juicers, food blenders
- Skillets, pots, pans
- Tables and linens
- Condiment trays with salt, pepper, cream, sugar, etc.
- Means of transportation
- Refrigeration unit(s)
- Specialty equipment such as panini grills and chocolate fountains
- Van or box truck
- A large assortment of food warmers
- Office Equipment
Monthly Expenses To Consider:
In addition to our list of common business expenses, your catering service will require a budget for the ongoing cost of acquiring 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:
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.
- 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 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.
Starting Your Catering Business
The areas you’ll need to address include some of the following points:
- Writing a Business Plan
- Funding Your Business
- Selecting a Business Name
- Get Your Tax ID
- Get Special Permits
- Registering Your Business
- Create Your Corporate ID
- Accounting System Considerations
- Etc.
In my post, The Essential Steps To Start a Business, you’ll find all the details, plus some important points to consider before you start any business.