With low startup costs and the ability to decide your own business model, a home-based catering business is an exciting entry into culinary entrepreneurship!
With no “customer-facing” space needed, starting a catering business from home can be affordable to start, and a great way to either supplement your full-time income or replace it entirely.
Follow this step-by-step guide to get your home-based catering business off the ground, and start wowing clients with your delicious food!
Know the Law Around Home-Based Catering
Before you file any paperwork or spend a dollar to establish your business entity, you need to know what is possible in your area.
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 more ventilation than your kitchen can provide, 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 details!
You may find that while you can operate the business side of your catering operation from home, you’ll still need a commercial kitchen rental where you can do the actual cooking. You may have to rent one, or you may be able to cut costs by sharing a space with a local church, restaurant, or community center. Get creative!
Start Looking at the Numbers
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 see your way to a money-making business.
What Will It Cost to Open Your Doors?
There are costs associated with every business. How much will it cost you to start your catering business at home, and how long will it take to recoup those costs?
Try to keep your expenses low at the beginning. Instead of buying all new equipment and serving dishes, what can you find second-hand or even borrow? Can you do local, low-cost marketing instead of a pricey online ad?
Will you be able to cover these startup costs out of your own 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 while you get up and running. Unexpected expenses crop up, like bad weather leading to higher food prices, or broken equipment that needs repair.
Remember to factor in the cost of a rented kitchen space if you need one!
How Much Can You Expect to Bring In?
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. What do 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.
Or do you envision it as a supplemental business to your full-time job, or a fun money-making hobby? If that’s the case, you may only plan to do one small, high-end dinner party per month, focusing on personalized service.
Do you plan to be a company of one? This will limit the size of the event you can manage, but it also reduces your expenses.
These factors will 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.
Create Your Business Entity
Name Your Home-Based Catering Business
Time to brainstorm some names!
Check with your Secretary of State (if you’re in the U.S.) to make sure that the name hasn’t already been registered. Also check the URL online to make sure there is no website under that name already. You want to make it easy for people to find you.
Plus, a little research up front can avoid confusion or legal troubles from a similarly-named company.
Create Your Business Structure
Consult with an attorney and/or tax professional to decide what the best business structure will be for your company.
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.
Once you’ve established your business name and structure, you can register for an Employer Identification Number (EIN) with the IRS.
Set Up Your Business Banking
Keep your personal funds and business funds separate, so you can accurately track your profit and expenses. This will also make paying your taxes much easier at the end of the year!
Get Any Required Licenses and Permits
Each state, county, and city will have their 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. You’ll probably need a food handler’s or food manager’s license as well.
And if you plan to sell alcohol as part of your catering services, you’ll need a liquor license too, to stay in compliance.
Be diligent in your permits and licenses! An error here could get you into financial or even legal trouble down the road.
Get Liability Insurance
Protect yourself! Any time you cook for others, there is some element of risk. If someone gets ill from something they ate—even if it’s not your fault—you may face liability. Get liability coverage to make sure you and your business are protected. A specialty insurance provider may be a good fit, like the Food Liability Insurance Program.
You may also need to update your homeowners insurance since you’re running your business out of your home. Contact your insurance company for details.
Create a Menu
Now that all the paperwork is out of the way (for now), let’s talk food!
There are caterers for all types of specialities, from regional cuisine to farm-to-table to catering for specific dietary restrictions. 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 gluten-free vegan, I’m much more likely to hire the gluten-free vegan caterer than a “jack of all trades.”
“After researching Auguste Escoffier School of Culinary Arts and comparing it to other schools, there were aspects that stood out. I loved the length of the program. It really worked with my schedule and my lifestyle. Also, the farm-to-table aspect was a really big selling point for me, so I was really looking forward to that.”
Emilee Raney, Escoffier Culinary Arts Graduate; Savory Cuisines Catering
To avoid reinventing the wheel for every event, create 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.
Also consider your service method when designing your menu. If you’re only offering buffet-style catering, you may want to avoid certain items like those that contain mayo (which needs to stay refrigerated) or rice (which needs to stay hot).
Assess Your Equipment
What do you have, and what do you need?
If you offer baked goods on your menu, for example, you may need a second stand mixer, or multiple ovens. A dedicated catering refrigerator can give you extra cold-storage, plus make it easier to keep your catering supplies safe from hungry family members if you’re cooking at home.
You’ll also need chafing dishes and sternos to keep food hot when it reaches its destination, plus serving utensils and dishes.
When you have all these extra items, where will you keep them? If you have a large garage or storage shed, that can work. But you may need to rent a storage unit nearby to keep these things out of your home or rental kitchen space.
Start Building Relationships with Vendors
As a catering business owner, you have access to wholesale food suppliers that can supply you with bulk ingredients at better prices. They can also help you to source specific ingredients, which is helpful if you’re in a specialty market.
Start communicating with vendors early to get an idea for who has the best prices, quickest delivery times, and most responsive customer service.
Think beyond the food. If you can source linens, flatware, and plateware as part of your service, you can both charge a higher rate and provide a useful service to your clients. So develop relationships with rental vendors as well.
Start Marketing Your Home-Based Catering Business
How will you get the word out? If you plan to cater to an older crowd, you may want to go with traditional marketing methods, like taking an ad out in a local publication. If your ideal customers are younger and tech-savvy, social media is probably a better place to focus your efforts. Focus on high-end photography to make your food look its best. We eat with our eyes first!
You’ll also need a website. A website makes you “findable” online, and will be your home base to gather menus, testimonials, photos, and pricing. It’s also where you can share your story and credentials, like your culinary school degree or diploma, and what is special about your cuisine.
“For me, having access to the school online means it is now possible to receive the culinary education I have desired, while still being able to grow my business and take care of my family, without even having to leave our valley. It is awesome that in my lifetime, we have developed the technology making this educational venture even an option. I am grateful for the opportunity, to say the least.”
Kristen Douglas, Online Culinary Arts Graduate; Owner & Catering Chef, The Main Event
Hire and Train Your Staff
If you’re catering small events, you may be able to handle them on your own. But as events get larger, they grow in complexity.
Even if you can handle all the cooking on your own, who is going to serve it? Two or three people may be enough to keep a buffet well-stocked. But if you plan to do seated meals, you’ll need more staff to prevent slow service and cold food.
If you’re an Escoffier graduate, you may be able to find some team members among your fellow alumni through the Escoffier Alumni Association!
Collect Reviews and Testimonials
One of your best sources for new clients will be old clients. Collect reviews and testimonials from happy clients that will help encourage new business!
The best way to get reviews is to ask for them. Some bookkeeping software has this function built right in. After you send the final invoice and the client pays it, the software can send out an automated email with a link to your review platform of choice.
Celebrate Major Moments Through Food!
Starting a catering business at home can be flexible and rewarding! Helping people to celebrate life’s big events through food is one of the major attractions of the catering career.
Don’t be intimidated by the “business” part of the business. You’ll learn one step at a time. But education can help you to start off on the right foot. A culinary education from Auguste Escoffier School of Culinary Arts includes both cooking and business coursework that may help demystify some of the important concepts of entrepreneurship.
With online culinary school, you may even be able to complete your program while you start your business.
Start your journey to a future in home-based catering with Escoffier!
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