How To Start A Catering Business: Follow These 12 Basic Steps
Do you want to know how to start a catering business? Well, here we bring in the best of the procedures for you!
The catering business is attractive to a very broad category of entrepreneurs. Maybe you’re a great cook, maybe you like giving parties, or you simply have a calling for event planning and want to get the ball rolling by serving some food.
However, in the early days of starting up the catering business and then expanding that into event planning, business is more than just putting food on plates.
More so, it involves thinking one’s way through stressors, planning for the unexpected, and running the business just like any other.
In this guide, we will walk you step-by-step through everything you need to know to start a catering business. With a minimal amount of assistance, you will be capable of captivating numerous guests at parties, events, and festivals in no time.
What Is Catering Services?
Catering services provide food and drinks for events, such as parties, festivals, or meetings. It involves making food, preparing it, serving it, and cleaning it up afterward. This industry is attractive to many entrepreneurs because of its creative and event-driven nature.
Are you quite eager to know how to start catering services? Read the upcoming segment for more clarification.
Top 7 Catering Business Ideas For This Year
How to start a small catering business? Here are some of the top catering advice for catering business ideas for this year:
- Corporate Catering: Offering food services for business-related, corporate meetings and functions.
- Social Catering: Catering for weddings, birthdays, anniversaries, and all kinds of personal functions.
- Specialty Diet Catering: People with dietary concerns, such as gluten-free, vegan, or allergy-specific needs.
- Mobile Catering: Food preparation and serving is done in a truck or trailer designed for the purpose at various locations.
- Virtual Kitchens: Preparing food specifically for delivery without a physical store.
- Sustainable Catering: All food is bought from organic, locally sourced resources and is eco.
- Event Planning: All types of functions are provided on a turnkey basis, including catering.
How To Start A Catering Business: A 12 Steps Guide
Just before you move on to the next steps in the process of starting a catering business, it is important to note that learning how to start a catering business should have you identifying and choosing the type of catering business that you would want to start.
While some could well cater to cocktail receptions, others might go in for a full-scale, buffet-type event or party catering.
Others may well go in for the sit-down kind of catering that you might find with a banquet or wedding.
From here, when you are confident about the type of catering you would want to get done, you can then get on to the upfront steps and catering tips:
1. Discover Your Area Of Expertise
The good news about any niche catering business is that there is less competition in the marketplace, and hence developing a strong customer base through word-of-mouth marketing for repeat customers is pretty easy.
For this to be successful, one needs to consider the type of food served, the types of functions to be served, capacity, and a plan for hiring in food preparation, sales, and accounting.
If the catering business is a side hustle, one should limit business activity to weekends. It is also very important to consider who you will be competing against and who you will work for.
2. Investigating Customer Base And Competitive Landscape
Research the industry before one starts a catering venture to understand how competitive and unique your offerings are. Find local caterers through menus and functions.
Engage customers in conversations on what they want to eat and what is kind to their experiences. Get recommendations from friends and family about their favorites.
Engage wedding planners, office managers, and event planners to learn more about what they personally like. Browse Google listings, Yellow Pages, Yelp, and on Facebook for reviews and customer opinions.
Look through the reports and statistics of the whole country’s catering businesses to identify the general view of industry trends and tendencies.
Now, focus on unique offerings and concentrate on niches in order to stand out.
3. Look Into Local Business Licenses And Permits
Catering businesses require licensing and general business permits, zoning, and health compliance approvals that vary from state to state.
These depend on what the states require but most commonly include a general business license, zoning permits, and health permits.
Get all required licenses and permits at the local health departments and through the Secretary of State.
4. Design Your Menu
Starting a catering business takes research, research, and more research. A caterer must find out the licensing regulations in his or her own area.
An important first step is to come up with a menu. This will help guide supplies and the presentation of the dishes.
The kind of menu that a caterer will offer is suggested by the capacity, cooking equipment, type of food, and marketing niche.
For instance, they may not include freshly squeezed orange juice on their menu in the winter.
5. Consider Your Business Site Selection
Your catering business’s location depends on local laws and zoning regulations. If you cannot cook food at home, you might be able to rent a commercial kitchen or prepare food on an event host’s premises.
Renting a commercial kitchen offers flexibility but increases operating costs. Onsite preparation limits you to customers with kitchens in churches, community centers, and homes – and further limits your ability to serve some events.
The best plan is to then decide what to serve and plan the budget accordingly.
6. Prepare To Procure Necessary Tools And Supplies
Open a business account, itemize all the equipment needed, get a quote from some restaurant supply companies, and investigate financing possibilities such as small business loans or lines of credit.
It might also be less costly than financial plans and allow you to buy used equipment upfront – possibly saving money in the long run.
Knowing what is exactly needed, will give you the avenue to budget well for your equipment needs in order to have it right and make the business run smoothly.
7. Develop A Comprehensive Business Strategy/Business Plan
A clear plan is key to success in the catering business. This includes research on the customers, starting a budget, financial projections, and a catering business plan that covers problems solved, what sets your business apart, resources that your business relies on, your mission statement, and the inspiration behind the operation.
A good business plan should be an all-inclusive piece structured in steps with an attention-grabbing cover page.
How much does it cost to start a catering business?
Your catering company should cost between $10,000 and $50,000 to start. Startup costs, of course, vary from business to business.
Your equipment, transportation, and marketing needs should be considered. You should have enough money to cover your business’s expenses for a year, even if you don’t make a dime.
8. Take The Initiative For A Cost-effective Marketing Approach
Market your catering company with the likes of affordability by updating menus and prices online, beefing up social media for your company, and displaying sexy food pictures.
Chances are, potential customers have you in the back of their minds long before they actually reach out. Supply them with price point ranges upfront; that can be helpful to them.
Make sure the social media profile of your company is up to date with the reviews, and reply to the negative ones.
Posting hot food photos is one of the better ways to keep your social media fresh.
Word-of-mouth marketing is key, so make sure that if you’re engaging with your customers, you’re giving them some amazing service and also some really good referral deals.
Building good relationships and maintaining them by means of incentive referrals can grow your clientele much faster than any print ad or flyer ever can.
9. Select A Business Organization Model
Your business structure has an impact on taxation and personal liability in your catering company. Forming as a sole proprietor is quite easy, there’s no paperwork or business structure needed.
Though maybe not the best if debts go unpaid or someone gets sued. The LLC is a single-member entity providing more liability protection for the business by setting it up as quite a separate legal entity from the individual.
10. Decide On A Name For Your Catering Company
If you’re a sole proprietorship and you’re operating under your own name—say, Ben Harper—there’s no need to register a business name.
But the minute you choose to operate under a different name—Ben Just Catered —you’ll need to register it.
If your business is not a sole proprietorship, you must register your business name, even if it’s the same as your personal name.
In either of these instances, you register your business name by filing a doing business as (DBA) form with your state and county.
11. Acquire Insurance To Protect Your Catering Business
Business insurance is crucial for catering businesses to protect their assets and avoid lawsuits. General liability insurance is the most essential type, covering damages caused by accidents or mishaps.
Other types of insurance include commercial automotive, commercial property, unemployment, wrongful termination, and key person insurance.
General liability insurance covers damages caused by accidents or mistreatment, while commercial automotive insurance protects the catering van.
Unemployment insurance is often legally required for employees and protects against lawsuits if they lose their jobs. Key person insurance is essential for star chefs who may lose commission.
12. Always Keep Financial Records
Bookkeeping is crucial for starting a business, as it helps track customer payments, supplier payments, and cash flow.
Good bookkeeping helps plan expansion strategies, ensures profitability, and allows for tax deductions at year-end.
It’s essential to ensure bookkeeping is operational before catering your first event, as disorganization can negatively impact the business.
Ensure bookkeeping is up and running before catering your first event.
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Final Thoughts
Now you know the jam on how to start a catering business. Starting a catering business involves more than just cooking and serving food. It requires careful planning, strategic thinking, and most importantly, meticulous bookkeeping.
By keeping accurate financial records from the start, you can ensure the smooth operation of your business, make informed decisions for its growth, and comply with tax regulations.
This will ultimately lead to a successful and thriving catering business.
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