Start a home-based catering business

You’re passionate about cooking. Every holiday season, you host the most elegant parties for your family and friends. Everyone wants a seat at your table because the dishes you cook are merely delicious. It sounds like you have what it takes to start a home-based catering business. If you have an entrepreneurial spirit, you can grow a business from your hobby. 

But remember that starting a catering business implies some legal obligations and even some bumps in the road. The catering industry attracts many young entrepreneurs, and this makes it a competitive domain. But what makes you different from the people who want to start a catering company because they find it a profitable venture is that you like to cook for people and put delicious meals on their plates. 

This guide takes you step-by-step through what you need to do to start a catering company from home. With planning and research, you’ll be delighting people at corporate events, family reunions, weddings, and festivals. 

dumplings platter

Choose a business entity type and a name

Before looking for a name, decide what type of business entity you prefer for your venture. You can choose from many options, depending on if you want to run the venture alone or have a partner. If you operate it as a sole proprietor, you own it alone or with your spouse. When you have a partner, or you want to avoid taking personal liability for the venture, register it as a limited liability company, general partnership, limited liability partnership, or another business entity that better suits your needs. Each business type offers different levels of protection. 

After you decide the business type, move to establish its name. It should be unique, something that resonates with the values you want to promote once you pick one, check if it’s available in the state with the help of an online tool. 

Select a niche

You may prefer cooking specific meals, which can help you decide on the type of cuisine you want to specialize in. The most popular options are brunches, banquet menu, kosher cuisine, healthy food, vegetarian or vegan food, desserts and sweets, cocktails and snacks, or barbecue. 

When choosing a niche, consider your geographical location, interests, and passion for pointing you in the right direction. Research the market and identify what preferences possible clients may have in your area. If there are many business headquarters, you can go with brunches, healthy food, or banquet menu for corporate parties. Focus on cooking meals you love, and offer your clients customized meals. 

Research the market

Make a list with possible competitors, gather information about their services, prices, menu, and target the public. Determine what makes your business unique in the catering sector, what you can bring new to the market. To attract clients, you need to stand out from your competitors. 

When running a catering business, you don’t only sell food; you also offer comfort and trigger positive emotions. What experience do you provide to your audience? All catering businesses offer food, but what can you do to make your clients feel special? Identify the strengths and advantages that separate your business from the crowd. 

Write the business plan

Writing a business plan takes some time, but it pays off in the long term because it helps you stay on track. If you don’t know how to create a business plan, you can use an online template. The ideal business plan includes an overview of the brand, the company’s organization, market analysis, a list of products and services you offer, and financial and marketing solutions. It may sound like a lot to know and do, but you can easily build it as you learn more about the business world. 

Start by researching the market to determine if it lacks a particular type of catering you can cover. For example, you may live in an area with few or no vegan or vegetarian catering businesses but many potential customers. Market research can help you identify the services you need to provide to sustain your business.

The business plan should also include information about the vendors and suppliers you need to use. Look into delivery solutions; you can collaborate with a local company or buy a vehicle and deliver the products yourself. When it comes to delivery, it’s best to do it yourself, and as your business grows, you can partner with a third party. To establish the budget, you need to buy delivery vehicles check the policy rates the best auto insurance companies have. To estimate how much purchasing a car costs, you also need to check how expensive its insurance policy and care and maintenance are. 

Get licenses

As with all other businesses that involve food preparation, you need to get licenses to start your catering company. For this particular venture, you need a food handling license and a business license from the state. To get your license you need to pass a state or county health inspection, and as most residential kitchens don’t meet the requirements, it’s best to rent a commercial kitchen that has already been approved to serve a business. 

Consult a lawyer to determine what paperwork is required to obtain your licenses. Work with someone specialized in the food industry because they have experience in filling paperwork. 

Establish pricing

The type of food you serve and your location influence your pricing. Some catering businesses create price tiers that offer them a specific service level and amenities for established amounts. But in the beginning, you can provide customized quotes for each client. It takes more time, but it shows the client you are interested in offering them the best services. If they don’t need some products you include in your offer; they don’t have to pay for them. If they need extra services, they pay more. The price also varies according to the type of catering products you offer and where you drop the food. Corporate events may require the use of high-end ingredients, and you can set prices starting with $70 per person. 

Starting a catering company isn’t easy, but it transforms your hobby into a profitable business when passionate about cooking. 

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