How to start a catering business in just nine steps
The catering business is a challenging enterprise to run; however, making the right choices will increase your odds of success.
The catering industry is home to many entrepreneurs. Perhaps you’re a great cook, or maybe you enjoy throwing parties, or perhaps you’re interested in planning an event and are looking to start the process through catering.
Maybe you’re Dannella Burnett from Gainesville, Georgia, who started her catering business in 2009, and the motive is simple and sweet:
“I decided that it was possible to cook for others and then put dishes on them. It would be possible also to put food on the family’s plates,” Burnett says of her decision to launch Oakwood Occasions.
However, as Burnett realized at the beginning of a catering company and later expanded to event management, it’s about more than just putting meals on tables. It’s about thinking through difficult situations, preparing for unexpected events, and, perhaps most important, operating a business as you would with every other.
This article will walk you through the steps you should know when starting an enterprise catering. With just a bit of help and guidance, you’ll be able to impress guests at events, parties, and events within a matter of minutes. In case you need more money to start your business, you can visit Bridge Payday and see further details on how.
How to begin a catering company in just nine steps
Before proceeding to the next steps in starting a catering company, you should note that you need to decide the kind of catering business you’d like to begin before beginning to learn how to begin an enterprise catering.
Specific caterers will only serve cocktails and food items, while others provide buffet-style food, and some cater to sit-down meals that you would experience at a wedding or banquet. When you’ve determined the kind of catering you’d like to create, you’re able to proceed to the next step.
Step 1: Select your business’s name and type.
When you’ve identified the kind of catering company you’d like to consider, You can then move on to selecting a name for your company and then creating the company’s entity in addition. You’ll need to pick the right word and ensure it’s in the state you’re opening your catering company. In most states, it is possible to check the availability of your business name online through the secretary of state.
It is also necessary to select the entity you’d like to use to operate with
to run to perform. You’ll have some options based on several factors that you can decide on, such as whether you wish to work on your own or not.
If you choose to operate with a single proprietor, your business will not be incorporated and solely owned by you (or you together with the spouse). Suppose you’d like to be an associate in your company, or you want to avoid the burden of personal responsibility for your business. In that case, it is possible to incorporate your business with a general partner, the limited partnership or the limited liability partnership, an LLC with limited liability, or any other type of business entity. Each provides different protections to partners as well as the business.
Step 2. Write a business plan
After you’ve got your company’s name and company name, the next step of the “how to begin catering businesses” checklist is to write the business plan. It will require some effort, but it’ll benefit you in the end because you’ll have a business plan to refer back to and assist you in knowing what you should anticipate when running your business.
You can use a business plan template or develop a plan on your own. If you decide to create the program, it must include some research. It’s essential to have a brief overview of your business and market analysis. Your company’s structure, the particular products, and services that you’ll offer, as well as your financial and marketing plans. If it sounds like too much, you can continually expand your project as you discover things about the catering industry world.
However, you should also investigate your competitors and discover potential customers. Do you have a specific type of catering needed in your region which isn’t currently being offered? If, for instance, you reside in an area that has a large number of golf clubs, then you might realize that they are always in need of caterers to cater to weekends. Conducting market research on the requirements in your region can help in aiding you in maintaining your business.
A part of your business plan to begin a catering business should include vendors and suppliers you’re planning to utilize. Consider sourcing everything you require for your catering, such as linens, utensils such as china, chairs, and tables for certain occasions, as well as the food items. For food products, Burnett suggests renting first before purchasing anything for yourself.
“At starting, it’s possible to could rent everything you could ever require or want,” she says. “And renting is excellent because You know what the price is and do not need the upfront expense of buying the item.
“But at some point, you may desire to purchase these items yourself, and you’ll still be able to charge for them. In essence, you’re paying for control of these items. They ultimately cost you nothing.”
If it is time to buy equipment, financing will provide the money you need to cover equipment costs.
Step 3. Register your catering company and obtain an EIN
Based on the type of business entity you choose, the name of your business could be, by default, your name. If you wish to change its standing, you may require a DBA (or “doing business under a” word. It is recommended to register your company and the name of your business with the state that you want to do business in.
Suppose you’re a catering company since the food you serve could also require other registrations based on your specific state’s regulations. The health department may have to inspect the location where you cook and prepare the food items you’ll serve.
You’ll also need to get an employee identification number known as an EIN. It is possible to apply on the internet at the IRS within a few minutes and benefit from having an EIN for many years to be. It can be used as a tax identification number for businesses and help with other business-related tasks, like getting a credit card or paying employees.
Step 4: Obtain all permits and clearances required for starting a catering company.
Like most industries that require food preparation, you aren’t able to just do it. You must obtain an enterprise permit from the State and authorization for food handling. Also, you must be able to pass a state or county health inspection. A home kitchen will not be enough. So, you should consider seeking out commercial kitchens that have already been certified.
Other requirements you may be required to consider are insurance for workers’ compensation and licenses or permits to operate from specific locations, the monthly or annual cost of which could affect profits margins.
If you’re not sure of the requirements to be done, contact your regional Chamber of Commerce, Small Business Development Center, and the Small Business Administration for more information.
It’s recommended to speak with an attorney in your region specializing in the service or food industry to assist you in filing all paperwork and getting all the registrations cleared before you begin cooking.
Step 5: Decide on the price you will charge.
Pricing your services is contingent on the location where your business is located and the type of catering service you offer. Many companies have price tiers that provide an exact amount of services and amenities in various amounts. Burnett did not go down that way.
“I began making customized proposals for clients and have stayed with them for nine years of my career,” the woman says. “It takes a bit more time, however many of my proposals are accepted rather than the package deal that could or might not match the criteria of what people are seeking. If they don’t need something, it’s unrelated to the event they’re planning and isn’t included in the price. If they require more, they’ll have to pay more. However, if they want less, they’ll pay less.”
To give an idea of the price, Burnett says that her cost per person has ranged from $7 to $8 to light snacks during drinks and up to $80 for filets as well as lobster.
“It differs because we offer buffets, dinners with plated plates, and simple appetizers. Or occasions where we’ve delivered food to the guests and then served it up themselves, too costly menus using unique ingredients,” she elaborates.
Step 6: Hire, train and outfit your team
It’s not likely you can cook an event by yourself, So the need for staff is an absolute requirement. The hiring and training of employees have come naturally to Burnett However, that may differ for your company. So, doing what the best for your business is—Advised here.
“At the very beginning, we brought on staff members one at a time because we needed them. There was no formal education from the start,” she says.
It is possible to locate employees just as quickly via word-of-mouth or through your network. You may also need to contact foodservice-related jobseeker sites or study how competitors have found their employees. Be aware that what you like when you’re just starting your catering company might not work as your business grows.
“But when we moved into our new office at the Hall County Government Center, we started café, a coffee shop as well as expanded our catering service simultaneously. Since we were to have staff in-house as well as catering personnel and staff, we needed to undergo a more extensive period of training.”
Another place where having cash to begin is helpful. If you’re hiring or training employees before participating in an event, it is essential to save money for training.
In addition, uniforms, which include vectorized logos, maybe “really affordable or extremely costly,” in the words of Burnett.
“Hey, I’d like aprons with logos. I’m going to get that logo vectorized is $75-$80, then you can purchase $5-$7 per piece based on the size of the logo. Then, you need to buy the apron. If you require 20, 30, 40, or even 30 of those, it adds up,” she adds.
Step 7: Sell on your occasions.
In terms of publicizing and marketing your company, Burnett has one suggestion that stands out above all the others.
“When you’re putting food into someone’s mouth, it’s the ideal time to locate your next customer,” she says. “It’s by the people who attend the events that you’re catering to.”
It’s a matter of the type of catering you are specialized in. If you specialize in weddings, attending bridal shows that require taking food samples and possibly renting booths is recommended. Corporate catering could require a more significant focus on LinkedIn advertising which allows you to purchase leads. You may even pay for individuals for knocking on their doors or hand out flyers to larger companies.
“It’s all about networking. There’s a significant amount of word-of-mouth as well as recommendations,” she says. When you’re starting your first catering business, this is where placing food into the mouth of someone else comes into.
Step 8: Get funding
Burnett decided to launch her company because of the need to do so after her husband’s job was cut following the financial meltdown of 2008. Her previous work experience was in retail and food management, and she leaned back on her experience when she was ready to seek another source of income.
“A lady from my church suggested, ‘Why do you not reopen your catering business at the church? I wasn’t sure it was possible. However, we contacted the department of health, and they conducted a site inspection at the church’s kitchen. The kitchen was approved for commercial use, so I was able to get the kitchen of my church registered as a catering company, and I started the business with no capital, no plan. Only me myself, myself and me,” Burnett explains.
Burnett was able to establish herself way before she thought she would be. Despite a lot of effort her experience with luck, she believes it was the main factor and would not recommend this route to potential caterers.
“There are certain events that I can reflect on and claim that due to sheer determination or luck and the next best thing was a reality,” she says. “Was the experience more difficult because there was no plan at the beginning or because there was no money? I would say definitely.”
Burnett states that in the catering industry, the availability of capital is crucial: “Most small businesses fail because they lack the capital needed to navigate the fluctuations of ebbs and flows. In a catering industry, there must have a certain amount of flows and ebbs, regardless of the seasonality of the catering you offer or the calendar, such as seasons as well as holidays.”
If you’re not as fortunate as Burnett, You will likely require some capital to help get the catering company up and running and through slow months. Understanding how to obtain money is among the most critical aspects of beginning your catering business. There are a variety of avenues you can take to get small business loans to start your business.
Suppose you’re looking to take the traditional way and go with conventional term loans, a small business credit line, or perhaps a commercial credit card. Once you’ve established yourself, you can explore applying for the SBA-related loan.
Step 9: Prepare for unexpected financial events as well as other emergencies.
You need to have extra cash initially and then plan your budget carefully as you progress, as you never know when something might fail in the food industry.
“Things fail, and you need to take them back. Perhaps you started with 200 pieces of china, but today you’re only using china for 150 since the breakage is a problem,” says Burnett, giving a list of items that caught her by surprise at the beginning of her career.
“Repairs to vehicles” can be a challenge for your vehicle, which is why you’ll require replacement tires. The cost of gasoline as it increased was a significant factor. Food prices were rising. It was understood by people that food costs increased to some extent. However, they believed that they needed to eat the lunches for $15 or $10 per person. When the price of gasoline and food has risen, it’s not difficult for this to become unprofitable.”
But being prepared for the unexpected can be about more than just budgeting. The majority of events are served in a location that could be as little as 30 minutes, one hour, or even a couple of hours from your kitchen. This can leave you in a tight place.
“The capability to be the MacGyver is a must. Each venue is unique, and if you’re unable to remember something, you’ll have to find a way to get it back,” Burnett says.
How do you begin a catering business? The most important thing to consider is the bottom line?
Catering isn’t a simple business. Burnett states that you must “know the risks involved” due to the job’s physical and physically demanding nature.
“You could be a fantastic cook, but it doesn’t mean you’re an expert catering professional,” she says.
However, Burnett has established an incredibly successful business, so she stopped catering in the year 2019 to concentrate on event management. This was little less than an idea developed in a church’s kitchen.