Starting a catering business can be a great way to make some serious money. The initial investment may be considerable, but the long-term potential is significant. With the right approach, you can create a profitable business with a low barrier to entry.
Starting a catering business doesn’t require a lot of upfront capital, and it can be a great way to get your feet wet in the food industry. You don’t need to have years of experience or a degree in culinary arts to start a catering business many people start their businesses just by reaching out to their friends and family and offering their services. A catering business can help you make money by providing meals for corporate events and meetings, birthday parties, weddings, and other events.
What is a Catering Business?
A catering business is a type of food service business that provides meals or food to clients in a variety of settings. These settings range from formal events in banquet halls to corporate events in convention centers and everything in between. In the course of doing business, a catering company may host a wide range of functions, from private parties to large public events. The common denominator for all of these functions is that the catering company must provide food for the event or function.
Types of Caterers
Caterers come in all shapes and sizes. Some specialize in corporate events and large-scale productions, while others focus on intimate private parties. Some cater to specific dietary needs, like gluten-free menus or kosher meals. You can even find caterers who provide vegan options for food-conscious guests.
Types of catering can be broken down into four main categories: family-style, plated, sit-down, and non-traditional.
Family-style catering
Family style is usually served buffet-style and is the most affordable option.
Plated catering
Plated catering is served from chafer dishes on each guest’s table. This is usually the most formal option.
Sit-down catering
It is a mix of plated and family-style options. Guests are served chafer dishes at their tables, but there are also serving stations with buffets for guests to serve themselves.
Non-traditional catering
Exactly what it sounds like. Not traditional, but still delicious options that may be more appropriate for certain types of events.
List of Catering franchises and costs
If you want to open your own business or expand your current one, you might want to consider a franchise as a strategic option. With a franchise, you get a tried and tested business model that’s less likely to fail. Additionally, these franchises usually offer extensive training, ongoing support, and a proven business model to help you succeed.
The initial investment ranges from $50,000 to $500,000. Profit may vary, depending on your location and industry, but you can expect to make between $10,000 and $100,000 annually.
Corporate Caterers - Min. Cash Required: $99,500
Corporate Caterers is a full-service off-premise catering company serving both families and businesses. Corporate Caterers was founded by Dennis McGinley and Jim Gass in 1997. We have the tools to help you promote your services to targeted clientele, from direct mail to referral programs, from personal presentations to catered functions. We will help you design a customized marketing and promotions campaign for your area before you begin.
Corporate CaterersJerry Lawler's BBQ - Min. Cash Required: $100,000
Jerry The King Lawler's BBQ offers championship quality ribs, brisket, smoked chicken, sandwiches, and more. The company is partnered with Benetrends to jumpstart your entrepreneurial journey. Funding is one of the most important components in buying a franchise/business. Benetrends has been funding America's entrepreneurs for over 35 years, offering a comprehensive suite of funding options covering nearly every type of business situation.
Jerry Lawler’s BBQLe Macaron - Min. Cash Required: $75,000
Le Macaron brings you authentic French macarons and freshly made pastries. Owner-operators take pride in creating an upscale retail oasis that introduces a new culinary standard in their communities. Meanwhile, they enjoy a smooth transition to entrepreneurship with the expert guidance of our support team. With more than 50 locations and counting, the franchise brand is poised to transform culinary culture across the U.S. alongside qualified investors.
Le MacaronBakery business equipment checklist
How to get Catering Equipment Financing?
There are several ways to get catering equipment financing. You can apply for a traditional bank loan, seek out a commercial lender, or try a financing company. Depending on the cost of your equipment and your credit profile, you may be able to get a traditional bank loan or consider a commercial lender that offers equipment financing. If you have less-than-perfect credit or you need a large amount of financing, you may want to explore equipment leasing options.
Get Catering Equipment Financing
Writing a Catering Business Plan
Catering is a business, and all businesses need a plan for how to succeed. A business plan is a document that outlines your company’s mission, goals, and strategy for achieving success. It also provides a framework for how to run your business, how to adapt to changes in the market, and how to measure your progress. A well-written business plan will help you decide which catering business model is best for you, and it will help you to grow your company.
Pick An Available Name
Choosing the right business name can be a difficult and time-consuming process. It’s important to choose a name that reflects your company’s values and culture and stands out from the competition. The name you choose also needs to meet certain standards. In the U.S., there are regulations on what you can and can’t call a company. You will want to pick something that expresses your menu selection to give your customers an immediate sense of what your catering business will be about.
Food Business Name GeneratorWrite An Executive Summary
This is an overview of your business’s vital information. The concept, target market, why the business stands to succeed, financial overview, and funding needs. You may even want to list out your overall goals for the business here.
Executive Summary TemplateCompany Description
Company description is a short paragraph or paragraph that describes your company’s products or services. The description should be relevant to your target audience. The main purpose of the company description is to sell your business to your potential customers. It also gives information about your company to your existing customers. It will provide additional details about what the business is all about. A mission statement on why your business exists or why your business is unique. Include flagship products, company leadership structure, staffing, and even an overview of marketing strategy.
Company Description GeneratorMarket Analysis
This is the outlook for your catering business and independent research to support what consumers want and your potential to succeed. You will want to include, statistics about growth, size and description of your target market, all competitors, your opportunities, and challenges.
Market Analysis TemplateSales and Marketing
Information about how you will attract customers and generate awareness about your food truck business. How will you advertise your business, your logo, what social media will you use, how much do you expect to spend on marketing and branding.
Sales and Marketing Plan TemplateFinancial Projections
Reports that provide insight into your business’s anticipated revenue and profitability. Break-even analysis, profit and loss statement, balance sheet, cash flow statement for at least the next five years.
Financial Projections TemplatePersonal Loans
Small, easy to obtain loans based on credit. Many lenders offer a personal loan with a wide range of interest rates and terms. This makes it easier to find a loan that suits your needs.
SBA Loans
The SBA mobile food vendor loan is designed to help owners of mobile food vendors purchase equipment, start a new business, or make improvements to an existing one. While this might not fit your catering idea, if you plan on working out of a food truck, or mobile kitchen, this loan woul dbe a perfect start.
Microloans
Some providers offer microloans for small businesses. These are smaller loans, usually between $1,000 and $25,000. There are some requirements for these loans, such as a minimum credit score.
Business Term Loan
If you’re looking to finance a retail location for your catering business, a term loan may be the right choice for you. Term loans usually have fixed rates and fixed terms, which means the rate stays the same throughout the duration of the loan.
Business Line of Credit
If you want to open a catering business and need financing, you can get a business line of credit to purchase inventory, supplies, and equipment. Most business lines of credit have a maximum amount that can be borrowed, and you will need to meet the requirements to qualify for the credit, which may include a history of profitable operations.
Equipment Loans
You may be able to get a low-interest loan through the USDA to purchase equipment that will help you grow your business. Interest rates on these types of loans are usually lower than the rates on a business loan. Equipment loans are easier to qualify for than other types of loans. But they are specifically for your equipment to run your business. For the location, staffing, or other needs, these loans will not work.
Business License
Also known as a vendor license is a business license allows you to operate a business in your desired city and state. A food truck business license can typically cost anywhere from $50 to $500, but application prices and terms will vary depending on your city and state.
Get Business LicencesFoodservice license
A food license is a permit issued by the local or state government that allows an individual or company to sell food to the public. The license may be required for any type of business so they can ensure that the public receives safe food, the government can collect taxes, or even regulating the type of food that can be sold. Food licenses are required by most countries, states, and municipalities, and there are a variety of different types of food licenses. Depending on the type of foodservice, a business will need to obtain a different license.
Get a Food Handlers LicenseEmployer Identification Number (EIN)
An Employer Identification Number, more commonly referred to as an EIN, is a federal tax ID number that registers your business with the IRS. It allows you to open a business bank account, create a credit profile, and hire employees. Employer Identification Number is free through the IRS and can be applied for through their website, or mail. The processing time can be around a month so be sure to apply before opening.
Get Employer Identification NumberCatering License
Because catering license requirements vary by location, it’s best to call your local Small Business Development Center. You might also check with a local branch of your department of agriculture. Ask them exactly how to get a catering license in your area. These centers are designed to help new businesses get started and to help existing small businesses succeed. They offer a great deal of free information and assistance, and they can help you work through all the details of getting your catering operation off the ground. You might also ask how much a catering license is in your area since costs vary widely by locale.
Getting a catering license or catering permit also often includes getting a health permit or inspection. Typically, a health inspector will visit your workspace to ensure that your kitchen meets all state and local requirements for commercial food preparation. If you want to sell alcoholic beverages, you will need a separate alcohol permit. Again, check with your Small Business Development Center.
How to Finds Catering LicensesHealth Department Permit
A health department permit or "food service license", is issued by the health department and indicates that your business passed the health inspection. An agent from the health department will examine your location in search of violations and provide you with notes on what to correct and an overall grade. They check for proper food storage, and overall cleanliness, and that clear health and safety plans are in place. Most cities require that your health score be displayed where customers can see it. A health department permit can cost anywhere from $50 to $1,000 depending on the city. You can contact your local health department to request and schedule a visit.
Kitchen Health and Safety Inspection RequirementsSeller’s Permit
seller’s permit is required in some states to allow foodservice business owners to purchase ingredients and supplies at wholesale prices without needing to pay sales tax. Check your local state government’s website to learn if a seller’s permit is needed and how to apply for one.
Get Seller’s PermitsLocation-based Permits
In developing your catering business, you may need to secure various location-based permits. First, it is important to determine that the location you selected is properly zoned for your food service business. If properly zoned, you may then decide to build or remodel a building for your new venture and will likely need relevant building permits. Even putting up a sign to let the public know about your food service business usually requires a signage permit as to the size, type, lighting, and location of your sign. These location-based permits are normally handled on a town, city, and/or county basis, so check with your local building or development authority.
Zoning Laws and Permits
There are several different zoning laws and permits that you may need to obtain before starting a catering business, depending on your location. These laws and permits can help to protect both your customers and the public, so it’s important to make sure you have them before you open your business. Check the zoning laws of your city. If people come to your home to pick up food, permits may be required. Obtaining a zoning variance would be necessary.
Products and Services
Details about the menu items you’ll serve and why customers will buy them. Your menu and pricing; unique qualities of your menu; will you offer products at events, on the street, or catering.
Keep menus and prices fresh
Keep your menu fresh by offering seasonal specials, daily deals, and rotating menu items. These types of offerings can help you keep customers engaged and coming back to your restaurant more often.
Determine your pricing
Pricing can be a very tricky subject, and there are many considerations to keep in mind. You will want to make sure that your pricing model works for both your business and your customers. There are many different ways to structure your pricing, and what works best for your business will depend on your particular situation. One of the most common ways to structure your pricing model is on a per-unit basis. This means that customers pay a set price for each product that they purchase. This is the most common pricing model for physical products.
Another common way to structure your pricing model is on a per-customer basis. This means that customers pay a certain amount for each account that they have with your business. This is the most common approach for services.Decide on your target market
Once you have decided on the type of catering service you would like to focus on, it is important to choose a group of people as your target market.
Research your community
It is important to choose a location that has a high concentration of your target market. When you are researching your customers, you want to make sure that you are staying updated with the latest trends, their wants and needs, and how the market is changing around them. Doing this research will also help you when it comes time to start researching your competitors. Finding out what your competitors are doing right and wrong will help you find ways to improve your own business.
Visit different areas
You will likely want to visit several different sites to find a location that is right for you.
Ask people
You may also want to ask people in your target market about the types of places they frequent.
How much does it cost to open a Catering Business?
The cost of opening a catering business will depend on the type of food you plan to serve, the location of your business, the size of your staff, and other factors. On average, you can expect to spend between $10,000 and $100,000 to start a catering business. The final cost of your business will depend on which type of catering you choose to focus on — corporate, private events, or public events.
Ordering Catering Equipment
When placing orders for catering equipment, you will need to decide between leasing or purchasing. If you plan on using the equipment only a few times a year, leasing may be your best option. However, if you will be using the equipment frequently, purchasing may be a better option. It is also important to decide whether you want brand new or used equipment. Used equipment can save you a lot of money, but it also comes with risks. Ensure that you are purchasing from a reputable seller to reduce this risk as much as possible.
Order Catering EquipmentHow to Get a Startup Loan for your Catering Business
Startup loans are designed for new businesses with little to no operational history. As such, they tend to have higher interest rates than conventional loans. Most start-up loans are unsecured and require no collateral; however, they are generally easier to get than a conventional loan. The application process for most start-up loans is similar to that of a conventional loan. You will likely need to provide financial statements from the previous year, a business plan, and a detailed outline of how the money will be spent. An asset profile, a minimum financial profile, and a business plan can be used to secure funding.
Here are a few examples of startup loans you may be able to apply for:
How to Get Investors
There are many ways to get investors, but the most important thing to do is research. Find out which investors are interested in the types of businesses you're looking to fund. Make sure you have a solid business plan before you approach an investor. Convince them that your company has a solid path to profitability. Find out what their investing preferences are. Find out which stage of funding they're willing to invest in. Find out what their risk preferences are. Find out how much money they're willing to invest and at what valuation they're willing to buy your company stock. Investors are people too. They want to be treated with respect. Treat every investor like they're an ambassador for your company.
Obtain Permits & Licenses
Obtaining the right permits and licenses before you start your business is critical. These documents are required by law and if you don’t have them you could risk fines or even jail time. If you are unsure whether you need a permit or license to start your business, check with your local government office. Even if a license is not required, like a business license, you may want to get it to help establish your business as legitimate.
Some licenses and permits you will need include:
Get Catering Insurance
If you are a professional caterer or work in the catering industry, you will need to get insurance for your business. Most likely, you will need general liability insurance to protect your business.
As a caterer, you will be exposed to a variety of different situations that could lead to a lawsuit, such as accidents that happen during a catering event, injuries that happen to staff members, or property damage due to negligence. A general liability policy will protect you from these risks and keep your business protected from lawsuits. When you are looking for insurance, you will want to make sure that you are getting a policy that covers the type of work that you are doing. If you are providing catering services, you will want to make sure that your policy covers catering-related accidents.
Find Catering Insurance
Create your Catering Menu
If you want to start up a catering business, you first need to decide what you want to offer and what type of catering you want to focus on. Whichever route you choose, your menu is key. Keep in mind that people may have dietary restrictions or allergies when choosing your menu, and make sure each dish has enough variety to meet everyone’s tastes. If you are hiring a caterer, make sure they offer a variety of menu options to accommodate different preferences.
How to find a retail space for your Catering Business?
Choosing the right location is one of the most important factors in the success of your business. It is essential to find a place that is accessible, visible, and desirable to your target market. There are several things you can do to help you find the right location for your business.
How to design a Catering Business?
Choosing the right business model is the first step in designing a successful catering company. Depending on your interests and business experience, you may want to focus on serving a specific type of client, offering a certain type of service, or operating in a specific industry. While each of these business models has its own set of challenges, they also each have its own set of advantages. One of the most important factors to consider when designing your business model is whether you want to focus on serving clients or customers.
Hiring Staff for your Catering Business?
Staffing your business with the right people is vital to its success. However, hiring the wrong people can be just as damaging as not hiring anyone at all. To avoid costly hiring mistakes, you need to know what to look for when vetting potential employees. This guide will walk you through the process of hiring staff, from developing a hiring plan to screening candidates. You will learn how to find the right people, how to conduct a successful interview, and how to establish a hiring plan that keeps your company staffed with the right people at all times.
When hiring staff, first determine the exact roles and responsibilities of each position. Outline the qualifications and skills needed for each position and highlight them in your job board ad. When looking for potential new hires, you also should use a job search site. These sites allow you to search candidates’ applications by entering keywords like relevant job titles, certification titles, or skill sets, making narrowing down applications more efficient.
Advertise your Catering Business
There are several ways to advertise your small business, and each one has its advantages and disadvantages. The best way to decide which method to use will depend on your goals and target audience. You can choose from many different types of advertising, from social media ads to billboards. You can also decide whether you want to focus on brand awareness or lead generation.
Word of mouth marketing is the best form of marketing because people trust their friends and family more than advertisements. Word of mouth marketing is about creating an environment where your existing customers feel comfortable enough to recommend your brand to their friends and family. You must create a culture where your customers feel like they are part of a "tribe", where they feel comfortable enough to talk about your brand to anyone.
Find the right POS system
Choosing the right point of sale system for your business can be a critical decision with significant implications for your company’s profitability and operational efficiency. There are many different POS models on the market, and each comes with its own set of features and benefits. Once you have narrowed down your options, it is important to evaluate each system carefully and select the one that best suits your organization’s specific needs.
Toast POS is a cloud-based point of sale software for small to midsized businesses. It offers a mobile POS system with a sleek, user-friendly interface. The POS software is scalable to grow your business. It comes with robust reporting and tracking, inventory management, multiple vendor sync, and card reader integration. It also offers integrated inventory management. You can sync your existing inventory system with Toast.
How to Start a Catering Business Q&A
Whether you want to run a business from home or make connections with clients and get a regular salary, catering can be a great option. To get started, you’ll need to research your industry, set up your business, and market your services. There will be many questions that come up during every step of the process.
What are the 3 types of insurance that hospitality businesses need?
Property, liability, and workers’ compensation insurance are essential for any business, but especially for the hospitality industry, which deals with public safety on a daily basis. Property insurance covers the assets that a business owns, such as buildings, equipment, inventory, and other items that the company might own. Liability insurance covers the legal responsibility that a business has towards others if someone is hurt or property is damaged because of something that the business did or failed to do. Workers’ compensation insurance provides benefits such as medical care, disability benefits, and financial assistance if an employee is unable to work because of an injury or illness suffered on the job.
Is owning a catering business profitable?
The answer is yes. Catering is a profitable business model and there are several reasons for this. First, it is a service business, which means that you don’t have to purchase inventory or materials to start the business. Second, you can target high-end customers, who are willing to pay more for premium quality. Third, the operational costs of this business model are low. And last but not least, catering has high scalability.
The catering industry is a big business, with estimated revenue of $155 billion in the U.S. every year. With such a large market, there are plenty of opportunities for you to get a piece of the action. However, like any business, it comes with risk. To minimize that risk and increase your chances of success, you should carefully consider your target market, decide what type of catering company to run, and select the right location for your business.
Is it hard to start a catering business?
Yes, it is, but that doesn’t mean it’s impossible. Any business venture that is worth your time and money is going to require some effort on your part. It might seem intimidating to start your own catering business, but it doesn’t have to be. All you need to get started is a business license, insurance, and a commercial kitchen permit (if required). You’ll also need to invest in some basic equipment and a place to cook your food. This can be from your house if local law permits or you can rent or lease out a kitchen.
What are the qualities of a good caterer?
A good caterer has many qualities and is willing to work with a client to produce the best results possible. They should be reliable, have a good reputation, and be trustworthy. They should listen to a client's needs, be creative, and use fresh, high-quality ingredients. They should be responsive and helpful throughout the process and be able to accommodate any special requests. They should be organized and detail-oriented. They should have the flexibility to work with any budget and accommodate any guests with allergies.
What is the difference between a chef and a caterer?
A chef is a person who works in a kitchen and prepares food for customers. A caterer is someone who plans and hosts events for guests. A chef usually works in a restaurant or hotel kitchen, with a large staff of other cooks and helpers, who usually have set duties. A caterer may work alone or with a small staff, hosting a small event, and usually has overall responsibility for the success of the event.
What is a home-based caterer?
It is a type of catering service where a person (who has all the necessary licensing and permits to operate a food business) can operate from their own home. They can work as a caterer or can start a food business from home. The home-based caterer will likely have their own kitchen in which they can cook and store their food, but it can vary depending on the type of catering service provided. Some home-based caterers may only have a small space in which to store the items needed for their service.
