In the U.S., there around 12,000 catering businesses that create an annual revenue of over $11 billion.
Many caterers turn their passion into a profit and it can be a lucrative one. Perhaps you’re tired of working for an establishment and you want to start your own catering business.
If that sounds familiar, you’ve come to the right place. Here’s how to start a catering company.
Table of Contents
Choose Your Business Name
The first step for starting a catering company is choosing the name. It must be available across the country so search the Secretary of State and if it’s free, register and buy the domain name so you can trade online.
You should also decide whether you want to work as a sole proprietor or with a partner. If it’s the latter, you must apply to become a limited partnership, a limited liability company, or a general partnership.
Register Your Company
Next, register your company in the state you live in. Because you’re handling food, you may need other registrations depending on your state. Note that the health department may check if you’re preparing and serving food to ensure it’s clean enough.
You must also apply for an employer identification number (EIN) so you get a business tax ID number and learn how to apply for a company credit card.
Get Licenses and Insurance
Stumped on tips for starting a catering company?
You must apply for a business license and food handling one. You should also decide whether you’re serving alcohol because if you are, you’ll need a liquor license. Don’t worry if you’re overwhelmed, either hire a lawyer to guide you through the process or contact your local Chamber of Commerce to learn more.
Create a Business Plan
Wondering “how much does it cost to start a catering company?” Then create an ironclad business plan so you know your budget, what the current market is like, and your niche.
To figure out your target audience, create a spreadsheet to include their average age, whether they’re located, how often they host events, and the food services they often book.
During this stage, you should also research your competitors and look for a gap in the market. For instance, if there’s a local football stadium with weekly events, find out whether they have caterers or if you can provide a better service.
You must find your unique selling point (USP) so you stand out from the competition. It could be home delivery, a secret pop-up, or perhaps you constantly produce an innovative menu.
Find a Cooking Space
Before you start a catering company from home, make sure your kitchen has enough space to store ingredients and prepare food for a large group. You should have two refrigerators, three freezers, and at least two ovens so you can quickly whip up dishes.
You should also list everything you need for catering such as a large dishwasher, whether you have enough crockery and a plate. Note you’ll need serving dishes, coolers, and hot plates so you can keep food warm. And don’t forget the silverware, bowls, and serving spoons for guests so they dine in style.
Establish Relationships With Vendors
Apart from beverage service supplies, caterers also need to provide glassware, linens, and utensils so it’s important to establish relationships with vendors. Research online for wholesale vendors or small companies to find what you need.
Make sure you read customer reviews to learn more about the quality of their products and how well they deal with a client’s issues.
Determine Your Menu and Pricing
You’ve learned how to start a catering company from home so now comes the fun part. It’s wise to reach out to the client and ask what they’re after whether it’s BBQ, appetizers, or seafood. This means you won’t buy unnecessary stock and it’ll be easier to give them a concrete price.
When you’re deciding how much to charge, consider the ingredients and labor costs. Most caterers use fixed pricing so you charge per person or platter.
Market Your Company
Marketing is the lifeblood of any business so you must design a strategy so you reach your target market.
Snap photos of your best dishes and upload them to social media so customers know what you offer. It’s wise to invest in PPC ads and target your ideal demographic on social media. Further, reach out to food bloggers and ask them to post a review of your business and advertise your services.
You should also focus on word-of-mouth marketing because many catering businesses rely on referrals. Ask clients to pass on your name or see whether they know anyone who needs your services. Bring along business cards to events you’re catering for and you’ll be surprised how many people will be interested.
Hire and Train Catering Staff
Once your business grows, hire staff to help you cater for the event. Search online, rely on word-of-mouth referrals and see how your competitors find employers. Once you’ve got a team, get a uniform so your logo and business name is easily identifiable.
That’s How to Start a Catering Company
Now you know how to start a catering company from start-to-finish.
You must register your company, apply for necessary licenses, and create a business plan so you know what you’re serving and who to. Caterers rely on word-of-mouth referrals so provide a high-quality service so you get new clients and increased profits. Good luck!
Did you find this article helpful? If so, check out our posts on everything from Business to Finance.