How to Start a Catering Business in 10 Steps

There are a lot of reasons to take a love of cooking down the path of entrepreneurship with a catering business. Catering, which is very different from working in a traditional restaurant, is a malleable business that allows you to flex your event planning and execution muscles—all while throwing great parties, visiting new and interesting locations, and testing out your favorite recipes for a willing audience.

Yet, how do you go about taking your love for cooking, parties, and travel, and actually, you know... start a catering business? Fret not. We’ve got you covered with the 10 essential steps to starting a catering business, from how to find your niche, to market research, to the hiring tools you’ll need to market your brand new business.

How to start your own catering business 

The catering industry resulted in $12 billion in revenue in 2022, and increased in size by 16%. That's a lot of money—uh, opportunity—up for grabs for you to start a small business in catering. It's important to think about the kind of catering business you want and find the rhythm that suits you and your customers. Do you want to run your business from your home? Rent out commercial space? Run things yourself? Hire staff? We know: it's a lot to consider. Luckily, we made a handy list: Pro:

• Flexible working schedule where you decide your own hours 
• Able to choose your own working location
• Control over the clients you work with
• Choosing your own level of growth 
• More control over customer retention rates

Cons:

• Customer satisfaction is crucial, and can float or sink your business
• Potentially repetitive work
• Usually working evenings and weekends

It’s important to look at the catering business from all angles before diving headfirst into it. If you’re still here and ready to build your business, we’ve got 10 important steps to consider before starting. 

1. Find your niche

When thinking about starting any business, ask yourself what you want to offer and why.Some questions you may want to consider on your path to finding your culinary lane: 

• What's your specialty? 
• What type of food will you serve? 
• Who is your main clientele?
• What size of functions work best for you? 

From there you can narrow down and discover what catering business model may work for you: 

• Event-style: In this model, you may have courses to serve or hor d'oeuvres to pass around.  
• Family-style: This is a lot less laborious because it allows you to serve dishes on a long table à la family style.
• Off-premise: This model is great for drop-offs and delivery that require little service from staff. 

2. Conduct market research

Once you’ve decided on the type of food you’re going to make, as well as the catering model you’re likely to do, the next step is to conduct market research. Market research is essential to your business, whether you're starting a catering company or a veterinary practice (though it's best not to confuse the two). Every budding entrepreneur needs to map out competitors, customers, needs, and more before their business even begins to take shape.For a catering business, it might be good to: 

• See the competition. Research other catering businesses in your neighborhood or city, what they offer, where they are, and who their primary customers are. This will help you when trying to differentiate yourself from your competitors.  
• Talk to family and friends. Your nearest and dearest are a great resource for first-hand info on catering successes (and failures) to help you craft yours.
• Read a lot of reviews. Where caterers went right or really wrong is going to be apparent in company reviews. Folks are far more likely to leave a negative review rather than positive so keep that in mind. Constructive feedback, however, is a gift! 

3. Create a business plan for your catering company

Once the essentials that form the foundation of your catering business are complete, you’re ready to start work on a business plan. A business plan is going to explain to potential loan officers, investors, and yourself, really, what the business is, how you intend to run it, market analysis, what you offer, and how profitable you’ll be after the first year and onwards toward three or five years. Business plans are fairly standardized across many types of industries.

You can use a template to create your own. But for a catering business, there's the unique aspect of food. This goes back to your culinary niche: who are you serving, and what kind of food are you bringing them? Include as many details as possible about your intended audience. Your specialty, for example, may be a culturally-specific cuisine from your own ethnic background or heritage because of the success you’ve seen serving at your family functions. Say it’s Jamaican food. You could serve a  broader community underserved in that cuisine. This is where you’d note that specificity down, and why it’s important to your overall business. 

4. Finance your catering business

Start-up costs vary from business to business, but an optimal range for catering is somewhere between $10,000 and $50,000. Catering can be done out of your home and part-time, which means you can start small. If you intend on having more equipment and using a food truck or a brick-and-mortar space, then your costs go up. To finance your catering business, you have a few options: 

• Personal or business loans
• Business line of credit
• Grant
• Personal savings
• Crowdfunding
• Angel investors

5. Research licenses, permits, and insurance for catering businesses

Before launching right into your catering business, you’ll need to investigate licenses, permits, and insurance required to operate. These will vary state-to-state, but the most common licenses and permits are: 

• Zoning permit
• Business license
• Health permits

In addition to these, it’s worth looking into business insurance to cover any liabilities for your business. For catering, this coverage is a safety for expensive items like cooking equipment, and can cover any claims that resulted in food poisoning, injury, or property damage. 

6. Find the right location for your catering business

Your business plan likely outlines this, but location is important. If you’ve decided to remain at-home, then you won’t need to seek out additional help like a real estate agent. You will, however, need to know your state’s rules about selling food from your home. These differ state-to-state but, generally, you’ll need a food vendor’s license to be able to sell homemade goods. If you’re opting for a bigger catering business, seek out real estate help for the perfect commercial spot for you. You’ll need to consider: 

• Layout, such as where the kitchen is and where storage will be
• Competition nearby
• Cost of rent
• Access to parking for transportation

7. Order your equipment and supplies

Now we’re into the nitty gritty of your catering business: what supplies and equipment do you need for success? Some typical start-up catering items include: 

• Insulated food pan carriers
• Chafers and chafing dishes
• Serving equipment like trays, utensils, stands
• Countertop induction cookers
• Additional food storage, like a freezer or extra fridge
• Dinnerware, flatware, and glassware
• Uniforms for yourself and any staff
• Catering vehicle

8. Hire catering staff 

As you know, catering can be a lot of work: so you know you’re going to need help to plan, cook, and serve your best meals. If hiring employees is in your business plan and allocated in your finances, that’s a great first step. Next, you’ll need the right tools to hire your catering staff. Homebase has everything your catering business needs to hire the right folks for support. From posting job listings, to streamlining applicants, to getting all of their hiring and onboarding documentation ready, Homebase makes hiring easy for you so you can keep focusing on growing your business. 

9. Market your catering business

The day is here! It’s time to market your catering business. Getting the word out for a new business can seem intimidating, but it doesn’t have to be—at least not with the right tools, strategy, and help in place. Word-of-mouth is extremely valuable: you want your customers to hype you up as much as possible. But without knowing what they say and when, here are a few more options to you can control when it comes to marketing:

• Create a website that you constantly tend to with fresh copy and menus
• Partner with local businesses and charities to expand your reach 
• Use social media and tailor content specific to the platform and your voice (i.e. don’t indulge in a TikTok trend if it’s really not your thing)
• Invest in a good food photographer to get the best angles of your favorite meals 

10. Get the right tools to run your catering company 

With the essentials of your company in place, you’ll need the right tools to ensure your budding catering business thrives. Consider using the following:

• A point-of-sale system for your customers
• Social media scheduler for your posts
• Email marketing and automation to send notes to your customers 
• Homebase for hiring, scheduling employees and tracking their hours, and payroll