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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.
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!
On-Site vs. Off-Site Catering
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.
Take the Culinary Career Survey
We’ve compiled a checklist of all of the essential questions into one handy tool: career options, culinary interest surveys, educational opportunities, and more.
Know Home-Based Catering Laws
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.
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!
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 build a profitable business.
What Can It Cost to Open Your Doors?
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.
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. 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.
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.
If financial planning seems a bit daunting, Escoffier’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!
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. 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.
Plus, putting in a little research upfront can allow you to avoid confusion or legal troubles from a similarly-named company.
Build Your Business Structure
Consult with an attorney and/or tax professional to decide what the best business structure for your company will be.
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.
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 may 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 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.
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.
Get Liability Insurance
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.
Craft Your Menu
Now that all the paperwork is out of the way (for now), let’s talk food!
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.”
“The most valuable part of my Escoffier education 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, Escoffier 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.
Also, consider your service method when designing your menu. If you’re only offering buffet-style catering, you may want to avoid dishes that rely on exquisite presentation or need refrigeration. Finally, think about on-site vs. off-site delivery. Food that you plan to deliver from your home kitchen to the venue must maintain quality through the transport and setup process.
Escoffier’s Online Food Entrepreneurship program curriculum may also examine the various aspects of menu design and management, including how to use home-based catering menus as a strategic financial tool.
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 may also need chafing dishes and Sterno 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 may also be able to help you source specific ingredients, which is valuable 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. And if you’d like to source ingredients from local farmers and small food producers, start reaching out early to build relationships.
When it comes to sourcing, think beyond the food. If you can source linens, flatware, and plates as part of your service, you may be able to charge a higher rate and provide a useful service to your clients. So strive to 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 target your efforts. Focus on high-end photography.
You’ll most likely need a website. A website makes you “findable” online, and it can be your home base to display menus, testimonials, photos, and pricing. It’s also where you can share your story and credentials, like your Food Entrepreneurship 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 at The Main Event
“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.”*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 often 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 may 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 can be be old clients. Along with relying on word of mouth, encourage past customers to leave positive reviews and testimonials you can share.
Some bookkeeping software has this function built 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! You have the opportunity to make rewarding connections with interesting people and help them to celebrate life’s big events through food. But it can also be challenging and demanding.
Education can be a great way to prepare you for starting a catering business. Escoffier’s Online Food Entrepreneurship programs include core culinary principles, marketing concepts, and business planning methods that may help demystify some of the important concepts of entrepreneurship and help set you up for success. And with online culinary school, you may even be able to complete your program while you start your catering business. To take the next step in your entrepreneurial journey, contact us today to get started!
Interested in learning more about culinary entrepreneurship? Try these articles next:
- How to Start a Bakery Business From Home
- How to Start a Restaurant with Little to No Money
- How to Start a Food Business From Home
This article was originally published on June 11, 2021, and has since been updated.
*Information may not reflect every student’s experience. Results and outcomes may be based on several factors, such as geographical region or previous experience.
**Consider your situation and resources to determine what is affordable and on budget, for you.
