Do you love to be in the kitchen as much as you love serving culinary delights? If so, then you may want to look into how to start a catering business.
In this article, we'll review the ins-and-outs of getting a catering business up and running. From the prep station and stove to the business of getting clients and serving up a great experience, we've got you covered.
You'll learn how to get a catering license, how caterer insurance can protect you, and how to plan for long-term success.
Time to dig in!
Your skill set in the kitchen will serve you well as a catering business owner. But remember — there's more to it than recipes.
Consider your personality traits. How can these traits contribute to your career and success as a caterer?
If you're adaptable, you may know how to manage the ambiguity that comes with the job. You may have to change your plans at the last minute because of an issue with inventory, a vendor, or the venue itself.
Adapting to stressful situations by remaining calm can help solidify your client's trust.
Using creativity can set yourself apart from the competition. Maybe it's how you explain what you bring to the table to potential clients. Or perhaps it has to do with how to arrange your food and serving stations.
Any way you show it, creativity can help make your business more memorable.
If you're engaging, you may have an easier time interacting with clients than your shyer competitors do. As an engaging business owner, you can help boost the energy of an event. When you're engaged and enthusiastic, vendors and other contributors are encouraged to do a better job.
The catering business isn't for the faint of heart! That's why it's important to acknowledge these traits. When you need motivation, think of the parts of your personality that set your business apart.
Before entering onto a new career path, it makes sense to get an idea of the bigger picture. What types of licenses and certifications may you need?
We'll go a bit deeper into the process of getting a business license in the next section of the article. But let’s see if you may need a catering license.
That's because each state has different requirements when it comes to business licenses. Make sure to check the laws in any state and city where you plan to operate your business.
But we're getting a bit ahead of ourselves here. Keep this in mind. For now, let's start at the beginning and cover how to start a catering business, one step at a time.
Starting a catering business is a lot like creating a great recipe. You want to make sure you have all the ingredients to achieve your goal. We'll go through our list of steps below.
There are several industries with clients looking for a caterer. But you can't possibly be what everyone is looking for. And that's OK! Narrowing your focus can help lead you to success.
Choosing a niche will help you grow your skill set specifically to the needs of the type of client and events you may want.
If you choose to focus on weddings and vow renewals, then the skills you work to perfect may be different than if you focus on corporate event catering.
Your niche also can impact how you grow your relationships with vendors. Different vendors can make different types of events a success. We'll talk about how you can work with them regardless of your niche later on.
You're working to create an experience at a specific location. But where should you prepare the food and all the fixings?
It may be easy to start at home, but as your business grows, you may find that you need your space to expand too.
In fact, depending on your state's public health guidelines, you may need to prepare food in a commercial kitchen. You can check if this is required by reaching out to your state's board of public health or by checking this website.
You can do a lot as a small business owner. But every smart business owner knows that they need help to achieve their goals. In the hospitality industry, it's common to work with vendors to help with certain aspects of your job.
You may work with a specific vendor to source your produce. Or you may work with another to get floral arrangements to accompany your settings.
You may be interested in joining an industry association like the International Caterers Association (ICA). Organizations like this can connect you with other business owners like you. They also may include tips and discounts for working with certain vendors.
As with any relationship, building a solid one with a vendor takes time. Once you decide on your niche, begin to build relationships with different vendors. You can start doing this by communicating clearly, sharing your feedback, and paying invoices on time.
Sure, being impulsive when creating a recipe can be fun. You can add a new ingredient last-minute and love the result. But doing that with your business is risky. That's why we suggest creating a business plan.
Having a business plan can help keep you accountable to your goals and measure your success. It also can come in handy if you apply for financial assistance.
Finally, if you plan to work with investors, there's a good chance they'll want to see your business plan. It's best to have one ready!
We have a FREE business plan template you can download here.
We mentioned earlier that there's a good chance you may need a business license. Now we can finally dig into the details. Learning how to get a catering license differs a bit, depending on your state. In general you can follow these steps:
Once these steps are complete, you can receive your catering license. You can check our state licensing guide hub here to learn about general requirements in your state.
Keep in mind that you may be required to renew your license each year. Make a note so you don't forget to keep your paperwork up-to-date.
One more thing: Check with your local municipality too. While each state has different business license laws, some local cities/towns have different laws as well. For example, some may require you to have specific permits in addition to your license.
You may also need permits specific to what you serve, such as a liquor license.
Make sure to follow both your state and local laws when it comes to getting your catering license.
As a business owner, you can take every step to avoid mistakes and accidents. But even when you prepare as much as possible, they do happen. That's where business insurance comes in.
An insurance policy can help protect you from the impact of financial risks you may face as a catering business owner. Even if you don't expect to face an accident, having business insurance can come in handy. Before hiring you, many venues and commercial kitchens may request to see proof of insurance.
Let's talk about how insurance can help if something does go wrong.
One type of insurance coverage a caterer may consider is general liability insurance.
General liability insurance typically covers third-party:
Let's look at a specific scenario to see how these events play into your day-to-day as a caterer.
Matilda owns a catering company. She accepts a job catering a party at a lavish mansion. It's a small party and she's confident she can do it on her own.
Matilda turned on the burners to warm the food tins before bringing out the food. But Matilda waited a bit too long. When she came out with the food, she found that the food tins had caught on fire. The serving station was up in flames!
When the fire was extinguished, the draperies were ruined, and the window was destroyed. Matilda's client sues her for the cost of the window repair, drapery replacement, and the food.
Without catering business insurance with general liability coverage, Matilda may be in financial trouble. She could face paying the claim out-of-pocket, as well as any legal fees if the client sues for negligence.
If she had a general liability coverage however, she could be covered for the cost of the claim and legal fees, up to her policy's limit.
But you're not Matilda and you don't imagine making those types of mistakes. So do you really need caterer insurance?
You very well may. Let's look at some numbers: 36%-53% of business owners surveyed reported being involved in a lawsuit in a given year. Even if you aren't at fault, a lawsuit itself can be costly.
Operating your business without insurance means facing financial risk. You could put your budding business in debt.
You would taste food before you served it, and fortunately, we can help you get a taste of the policies available to you.
And we may not be sous chefs, but our licensed insurance agents are standing by to help you. Call 844-654-7272 from 8 a.m.-8 p.m., Monday-Friday to get your insurance coverage questions answered.
Your catering business plan isn't the only plan to consider when thinking about the future. A marketing plan is important too. It's what you'll use to get the word out about your business.
Many businesses attract potential clients by having a digital presence. This means creating a website and having a business account on social media channels. A few you probably know are Facebook, Instagram, and Twitter, but there are many more to choose from.
A digital presence is definitely an important part of small business marketing. But many business owners also have great success with word-of-mouth.
Your marketing plan can help you create a presence on social media and in your community. It also can note strategies for getting the word out about your business. Having these things documented can help you set goals around what you want to achieve in the near and distant future.
Much like a business plan, a marketing plan will help you track your progress. Many business owners include their marketing plans within their overall business plans.
A marketing plan can include things like:
Research current market rates and the state of the market within your niche. Noting this in your marketing plan is helpful because you can see how things may change over time.
Information about your competitors is often included in the marketing plan. You can note how long your competitors have been in business, how large their operation is, what types of events they cater, and more.
Detail your plans for promoting your business and its services. This includes anything from social media and website work to attendance at trade shows and industry events.
Some marketing activities can be done organically and for free, but others cost money. For example, you may decide to spend money on Facebook ads.
Make sure to record your budget for the short-term and long-term. This way you can protect yourself from inadvertently going into debt.
If you want to learn more about what to include in your marketing plan, check our guide on how to start a small business. Download it for free here.
Sure, you try what you make after creating it. But do you get a second opinion? Running your recipes and serving plans by other people is a great way to test the waters.
You can easily test recipes with friends and family. This will show you if you achieved the result you were hoping for, and if the “tasters” enjoyed the food and experience themselves.
Trial runs with people testing your cuisine is a great way to gauge if your food matches up with what you hoped to create.
As a caterer, every detail matters. It's only natural if you're asking yourself, "How much does it cost to get catering business insurance?"
Like the custom experience you create for your clients, business insurance isn't one-size-fits-all. The cost of caterer insurance can depend on:
Fortunately, we can give you an idea of what to expect. At Simply Business, we have general liability policies starting for as low as $22.50/month*. That's less than the cost of the ingredients for a small dinner party.
Beyond affordable prices, we also can help you find the policy that works for your business. By comparing quotes with our free tool, you can see which coverage fits your catering business's needs.
By now, you have a good understanding of how to start a catering business. You know how to get a catering license and caterer insurance, how to choose your niche, and how to kick off vendor relationships.
But remember, just because something comes out of the oven, doesn't mean it's quite finished. To help with your success as a business owner, we suggest you continue to do your own research. Simply U has tips on growing and protecting your business that you can find here.
We're sure your career journey has a sweet future in store. Bon appetit!
* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January-December 2020 data of 10% of our total policies sold.
I’ve told stories since I learned to talk and written since I could hold a pen. As a small business owner myself - I'm a freelance writer and yoga teacher - I love contributing to the entrepreneurship community in different ways (including writing for Simply Business!). When I’m not drafting articles for SB, I can be found on my yoga mat, perusing an indie bookstore, and writing (with my cat nearby of course).
Allison writes on a number of topics such as small business leadership, business structures, and employee training.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.