With lower startup costs than a restaurant and the ability to determine your own hours and dishes, a home-based catering business can be an exciting entry into culinary entrepreneurship!
With no brick-and-mortar, “customer-facing” space needed, starting a catering business from home can be more affordable**, and a great way to either supplement your full-time income or replace it entirely.
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Still, this is a big undertaking. However, you can follow this step-by-step guide for helpful tips in getting your home-based catering business off the ground, and start wowing clients with your delicious food!
How To Start A Catering Business From Home: A Step By Step Guide
Catering services are generally split into two categories—on-site and off-site. With on-site catering, the food is cooked and completed at the event location, like a wedding venue or hotel. With off-site catering, food is cooked somewhere else and then brought to the event location. This is often the case with catered business lunches and private parties.
As a home-based caterer, you may have the option to work either of these methods into your business. You could do the prep work at home, and bring everything to the event location for the final cooking and plating. Or you could do all the cooking from your home kitchen, and deliver the completed dishes to the venue.
The method you choose could be influenced by your city and state catering regulations, so make sure to do your research before determining your business model.
How To Start A Catering Business In 9 Steps
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Before you file any paperwork or spend a dollar to establish your business entity, you need to know what is possible (and legal) in your area.
Benefits Of Home Based Corporate Function Catering Business
Does your city/county/state even allow for catering out of your home? And if so, does your kitchen meet the health department guidelines? These rules may require extra ventilation, a three-compartment sink, and non-permeable surfaces, like stainless steel countertops. Rules vary from state to state and city to city, so make sure to get the specific details for your region!
You may find that while you can operate the business side of your catering operation from home, you may still need a commercial kitchen rental where you can do the actual cooking for off-site catering. You may have to rent a shared commercial kitchen, or you may be able to cut costs by operating out of a kitchen at a local church, restaurant, or community center. Get creative!
There are two factors to a business’ profitability—income and expenses. Before you jump into your new venture, start sketching your financial outlook and making some projections so you can build a profitable business.
How To Start A Catering Business From Home: A Step By Step Guide By Ewan Kay
There are costs associated with every business—your job is to figure out how much you may need to spend starting and operating your catering business at home. Additionally, you should calculate your anticipated income to determine how long it may take to recoup those startup costs.
Keeping your expenses low at the beginning can help you become profitable sooner. Instead of buying all new equipment and serving dishes, what can you find second-hand or borrow? Can you purchase and store ingredients in bulk to save some money?
After you figure out your potential startup expenses, think about how you’ll pay for them. Will you be able to cover these startup costs out of your personal bank account, or do you need to seek a small business loan or grant? Even if you don’t need outside funds right away, you may want to secure a loan just to cover any possible emergencies that may occur as you get up and running. Unexpected expenses can crop up, like higher food prices or broken equipment that needs repair.
How To Start A Catering Business From Home
How many events can you reasonably cater per year? And how large do you plan for those events to be? This is a vital part of your planning process and goes to the very heart of your home catering business.
It’s not all about how many events you can do—it’s about how many you want to do. Flexibility is part of the appeal of this business model, so it’s up to you to decide what you want your business to look like.
Is this going to be a full-time venture with a team that serves large weddings and corporate events? In that case, you want every weekend to be booked.
How To Start A Home Based Catering Business, 5th (home Based Business Series)
Or do you envision it as a supplemental business to your full-time job, or a fun money-making hobby? If that’s what you envision, you may only plan to do one small, high-end dinner party per month, focusing on personalized service and top-shelf ingredients.
Do you plan to be a company of one? This will limit the size of the event you can manage, but it may also reduces your expenses.
These factors determine how much income you can make per year. Build out a rough calculation of the amount you can expect to make versus your anticipated expenses to make sure there’s room for profitability.
How To Run A Successful Home Based Catering Business
If financial planning seems a bit daunting, ’s Online Food Entrepreneurship program can help you grasp the culinary math fundamentals to start a food business, such as money management, purchasing, receiving, menu pricing, inventory, and more!
Check with your Secretary of State (if you’re in the U.S.) to make sure that the name hasn’t already been registered. It’s also a good idea to do a web search of the name to make sure there are no catering businesses that already hold that name. Remember, you want to make it easy for people to find and remember you.
A sole proprietorship is the easiest to create, but it doesn’t keep your personal and business assets separate. A limited liability company will protect your personal assets from business debts or liability, but it is a little more complicated to set up. If you’d like help with setting up your business, consider contacting a local small business center.
Starting A Catering Business: How To Start A Catering Business
Keep your personal funds and business funds separate, so you can accurately track your profit and expenses. This may also make paying your taxes much easier at the end of the year!
Each state, county, and city will have its own requirements for permitting and licensing. To start, you’ll probably need a business license. Contact the Small Business Administration (SBA) to get guidance on the rules in your local area.
If your state allows you to cater from your home kitchen, you may need an annual health inspection from the local health department. You may need a food handler’s or food manager’s license as well.
How To Start A Food Business From Home
And if you plan to sell alcohol as part of your catering services, you’ll likely need a liquor license to stay in compliance.
Long story short: be diligent in your permits and licenses! An error here could lead to financial or even legal trouble down the road.
Want to know more about the licenses and permits you might need? Read our guide to licenses and permits for catering businesses.
How To Start A Catering Business From Home (even If You're A Complete Beginner)
Even if you take proper precautions, any time you cook for others there is some element of risk. If someone gets ill from eating something you cooked—even if it’s not your fault—you may face liability. Liability coverage can protect you and your business if something unfortunate happens. A specialty insurance provider like the Food Liability Insurance Program may be a good fit for this type of business.
You may also need to update your homeowner’s insurance since you’re running your business out of your home. Contact your insurance company for details.
Caterers may choose numerous specialties, from regional cuisine to farm-to-table to plant-based catering. Choosing a specialty in your menu plan reduces your pool of possible clients, but it also makes it easier for you to stand out and market directly to your ideal customer. After all, if I’m a client who wants to serve guests a gluten-free, vegan meal, I’m probably more likely to hire the gluten-free vegan caterer than a “jack of all trades.”
Love Cooking? Why Not Start Your Own Catering Business From Home
“The most valuable part of my cation has been the knowledge I gained from all of the Chefs. Each one had a different take on things. It was a great experience.”* Kathy Gadison, Culinary Arts Graduate
To avoid reinventing the wheel for every event, you can opt to offer a set number of dishes that customers can pick from. You may also want to establish “tiers” in your menu, with each tier having a different per-person cost. This gives your customers flexibility in choosing their dishes while still working with their budgets.
When pricing your menu, consider your food costs, labor costs, and additional overhead (insurance, kitchen rental space) to make sure you can cover all of your expenses and still have some profit left over from each event.
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Also, consider your service method when designing your menu. If you’re only offering
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