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Business Startup Guides
Starting a Catering Business
When it comes to food-based businesses, you have a few choices — you could go into business as a restaurateur or start a catering business.
A catering business can be a great choice if you don’t want the expense of running a restaurant. You can still earn good margins on the meals you produce without having the overhead of running a restaurant.
Catering Business Formation Guide
Running a successful catering business can be a big challenge. Whatever your idea for doing business as a caterer, turning that vision into a company that creates amazing cuisine and delights your customers is doable, so long as you take the right approach. In this guide we’ll cover:
Understanding the world of catering
Paying taxes for your catering business
Deciding if you’re ready to start a catering business
Hiring employees, managing finances and administering your catering business
Planning out your catering business
Locating other resources for your catering business
Determining the best legal structure for your new organization
Following various rules and regulations
And much more
By the time you've read through our complete catering business guide, you will have all the information you need to set up and manage a catering. Let's get into it.
Different Types of Catering Businesses
There are several different ways to set up and run a catering business. These include:
Food Truck
Perhaps the most basic type of catering business, they involve setting up a mobile kitchen and providing food to the public at events, outside establishments and other gatherings.
Private event caterers
Mainly providing food for private events like weddings, christenings, wakes, and the like, these caterers primarily serve individual customers
Corporate event caterers
A popular and growing field, these types of caterers mainly serve business customers, providing food for meetings, conferences, seminars, and other company events.
Partnership caterers
These caterers go into partnership with other businesses, taking away the stress of preparing and serving food for their partners. Examples of this type of business could be partnering with pubs, clubs, and similar establishments.
Specialist caterers
You can set yourself apart by providing specialized catering for different dietary needs including vegetarian/vegan, gluten-free, kosher, halal and others.
Understand Your Catering Business Model and Financial Projections
All businesses need a business model, which is how you will generate sales, provide services and make money. Think about your business model now, because it’s better to have that in place so you can start acquiring customers and generating revenue from day one.
You will also need to look at financial projections for your catering business. What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others? If you can, try to plan your revenue for the next month, three months, year and two years
Write a Business Plan for Your Catering Business
Finally, you should put your business plan together. Business plans do vary slightly, but they should cover the following areas:
An executive summary with the most important points from your business plan
A market analysis and likely demand
How you will market and sell your offerings
Your goals and what you hope to achieve with your catering business
An overview of how your business is structured
Financial projections, revenue and profitability
A description of your business, background information and context
Your business model
Appendices
We’ve got the perfect guide to writing your business plan.
Right Business Structure
Choose the Right Business Structure and Register Your Catering Business
Now that you have all the background information for your catering business, it’s time to make it into a reality. That starts by choosing the right structure or “legal entity” for your business. In the U.S., there are four main business structures.
They are:
- Sole Proprietorship
This is the "default" business structure and is what your business will be if you decide not to create a more formal structure. We don't recommend this type of business as it doesn't give you the legal protections you need.
- Limited Liability Company or LLC
The most common type of business entity. An LLC is fast, simple and inexpensive to setup and maintain. It protects your personal finances and assets and is a great way to start your catering business.
- Series LLC
This is a special type of LLC entity that's only available in certain states. It allows you to create "mini" LLCs, each with their own limited liability and separate assets, under the umbrella of a master LLC.
- S Corporation
This is a more complex type of business and isn't generally recommended for smaller organization.
- C Corporation
These are the largest and most complex types of businesses and are far more than the average entrepreneur or business owner will need.
Special Considerations for Setting up a Catering Business Entity
For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you’ve still got questions, we’ve answered them to help you choose the right business structure for your catering business.
In most cases our recommendation would be to create an LLC. We have a complete guide to everything you need to do, and we can set one up for your catering business. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.
Start Your Business with Us, Today!Set up & Maintain Your Catering Business
Once you've legally created your catering business, you’ll need to get some other things in place.
Business location
Depending on the size of your business, you will need a location with excellent kitchen facilities. It must be easily accessible, should meet the needs of your staff and clients and shouldn’t eat into your profit margins too much
Employees
You will need to hire employees throughout your catering business. From chefs to serving staff to assistant cooks, getting your staff balance right is essential to your success.
Finances and Taxes
What kind of bank account will you get? And how will you pay your business taxes? These are all important things to consider so your catering business stays in the green. Here at Bizee, we can even help you file your taxes.
Permits and licenses
Running a catering business comes with certain rules, regulations and legalities you need to be aware of, especially around staff health and safety and food hygiene and preparation. Bizee can conduct a Business License Research package for you, or you can take the time to do the research yourself.
Marketing
Your catering business likely needs its own website, and you will also need to develop a local brand, logo and other marketing collateral. You should engage with local marketing firms who understand your immediate marketplace and can provide advice on getting your name out there
Equipment and ingredients
Caterers need a lot of upfront capital to invest in equipment, fixtures and furniture. From kitchen equipment to tables, chairs, plates and silverware, you will need to carefully budget everything you spend. Add to that the cost of ingredients, and you must keep a tight rein on expenses.
Business Maintenance
Caterers need a lot of upfront capital to invest in equipment, fixtures and furniture. From kitchen equipment to tables, chairs, plates and silverware, you will need to carefully budget everything you spend. Add to that the cost of ingredients, and you must keep a tight rein on expenses.
Software
There are many software products specifically for caterers that can make managing this business much easier. From taking orders to checks and food preparation to point of sale, the right software will make running a catering company more efficient and cost-effective.
A Clear and Comprehensive Guide to Starting Your Business the Right Way
Discussion Groups and Forums for Your Catering Business
There are plenty of forums and online discussion groups for catering businesses.
Start with these:
Useful Online Tools for Your Catering Business
Here are some really great online tools for managing your catering business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.
Collaboration
Social Media Management
Communication
Email Marketing
Advertising
Customer Relationship Management (CRM)
Customer Support
Human Resources
Website Development
Analytics
Hiring
Please note: This post contains affiliate links and we may receive a commission if you make a purchase using these links.
Conclusion
If you want to start a business that’s going to be a challenge but also bring a huge amount of pleasure and reward, then running a catering company could be right for you. The food you create and the trust you build will help set you apart in the minds of your clients and bring joy into people’s lives.
