How to Start a Catering Business

Who a catering business suits and what the work involves

Catering suits people who cook well and also plan well. The cooking is the visible part. Most of the work is logistics: quoting, shopping, prep lists, packing, transport, keeping food at a safe temperature, setting up, serving, clearing and washing up.

The hours follow other people's celebrations. Expect evenings, weekends and holidays, long days on your feet and heavy lifting. Events have fixed start times, so there is no arriving late or sending the food tomorrow. Between events the week is quieter: tastings, client calls, menu planning and invoices.

The upside compared with a restaurant is that you cook to confirmed orders. You know the guest count and you have a deposit before you buy ingredients, which keeps waste and risk lower. If you are weighing options, compare this with starting a food truck or other food business ideas.

How to start a catering business in 10 steps

1. Interview the people who book caterers. Talk to office managers, wedding and event planners, venue coordinators and people who recently hosted a party. Ask what they ordered last time, what it cost, what went wrong and how they chose. These buyers repeat, so their answers matter more than friends praising your cooking.
2. Run a small paid pilot. Cater one modest event, such as an office lunch or a family party, at a real price. Check first whether your area allows this from a home kitchen or whether you need to hire a licensed kitchen for the day. Time every stage and keep every receipt.
3. Pick a niche. Corporate lunches, weddings, private dinners, a specific cuisine or dietary need. Each has different buyers, order sizes and busy seasons. One clear niche makes your menu shorter and your marketing easier.
4. Design a short menu you can repeat. Choose dishes that travel and hold well, share ingredients and can be scaled up without losing quality. Build two or three set packages so quoting is quick.
5. Cost each dish and set a price per guest. Write down ingredient cost per portion, then add labor, packaging, transport, rentals and your overhead. The markup calculator and profit margin calculator help you turn cost into price.
6. Plan your costs. Price the categories listed below and decide what to rent instead of buy.
7. Sort out licenses, inspections and insurance. See the checklist below. Do this before you advertise.
8. Write your terms. Deposit amount, final guest count deadline, cancellation rules, what is included (staff, tableware, cleanup) and how leftovers and allergies are handled.
9. Get your first bookings. Offer tastings to two or three venues and planners, drop sample lunches at nearby offices, photograph every event and ask each client for a review and an introduction. See how to find your first 10 customers.
10. Formalize when bookings repeat. Once you have paid events in the calendar and repeat clients, register the business, separate your bank account and write a plan using the catering business plan template.

What costs should a catering business plan for?

Costs depend heavily on your city and the type of events you serve. Collect local quotes for each category instead of relying on a general figure.

• Kitchen access: hourly or monthly rent at a shared commercial kitchen (often called a commissary kitchen), or the cost of fitting out your own.
• Licenses, permits and inspections: whatever your local authority requires for preparing and selling food.
• Food safety training: courses or certificates for you and anyone who handles food.
• Insurance: liability cover, vehicle cover for business use and, if you serve alcohol, cover for that.
• Equipment: insulated carriers, chafing dishes, serving ware, and storage. Much of this can be rented per event at first.
• Transport: a suitable vehicle or van hire, plus fuel and parking.
• Ingredients and packaging: your largest variable cost, which is a cost that rises with every guest you serve.
• Staff: servers, kitchen help and drivers, usually paid per event.
• Sales and admin: website, photography, tastings, payment fees and accounting.

Total these in the startup cost calculator. For a wider view of early spending, see how much it costs to start a startup.

How do you price a catering job?

Build each quote from the bottom up. This worksheet shows the lines to fill in. The figures are an example for a 50-guest office lunch, not typical prices.

The amount left after direct costs is your gross margin. It has to pay for insurance, marketing, quiet weeks and your profit, so do not price at cost plus a small tip.

What licenses and legal things should you check?

Food rules are local and they are enforced. Requirements differ by country, state, county and city, so confirm each point with the named office before you take money.

• Where you may cook. Ask your local health department whether catering from a home kitchen is allowed. In many places catered meals must be prepared in an inspected commercial kitchen.
• Food business license and inspection. Ask the same office which license or registration a caterer needs and how inspections work.
• Food handler training. Ask which certificates you and your staff must hold.
• Allergens and labeling. Ask what you must tell clients about allergens and how to record it.
• Alcohol. If clients want bar service, ask your local licensing authority what permit applies. Many new caterers leave alcohol to the venue.
• Insurance. Ask a broker about liability cover. Venues often want proof of insurance before they let you in.
• Business registration and sales tax. Ask an accountant how to register, which structure fits and whether prepared food is taxed where you operate.
• Staff. If you hire servers, ask an accountant or employment adviser how to pay event staff correctly.

Common mistakes new caterers make

• Pricing from ingredients alone. Labor, transport and cleanup often cost as much as the food.
• A menu that is too long. Every extra dish adds shopping, prep and waste. Offer fewer things and do them well.
• No deposit and no contract. A cancelled event after you have shopped is a direct loss.
• Skipping the site visit. Find out in advance about parking, stairs, power, water, ovens and where you can plate.
• Guessing quantities. Record what was eaten and what came back after every event so the next quote is tighter.
• Buying equipment for one event. Rent until the same item is needed most weeks.
• Taking every job. A wedding for 200 in your second month can damage your name more than declining it would.

What to do this week

1. Call your local health department and ask what a caterer needs to operate legally.
2. Speak to five people who book catering and note what they paid last time.
3. Cost three dishes down to the portion.
4. Find one shared commercial kitchen near you and ask for its hourly rate and rules.
5. Offer one small paid event and time every stage.

When the pilot is done, Fonda can turn what you learned into a 10-chapter business plan with sources. You can read example plans at /tools/business-plan.