Do you have a background in cooking? Whether you’re a former restaurant chef or a skilled home cook, catering can be a great way to do what you love, meet new people, and better yet, create a thriving business.
As a caterer, the competition can sometimes be cutthroat, so get your chef’s knives ready. But what you do outside the kitchen is just as important. You’ll need a solid game plan and consistent hard work to create a successful catering business.
Ready to make your catering dreams a reality?
We’ve assembled a short guide to teach you how to start a catering business. Let’s dig in!
Pick a cuisine (or two)
Catering starts with the heart and soul behind the food. What unique culinary talents will make you stand out to event planners? Do you have a signature dish, a unique concept, or a gift for beautiful plating?
Take a look at your local competitors to ensure there’s not already another caterer specializing in gluten-free Italian or Haitian-Chinese fusion.
Before committing to a specific cuisine type or concept, make sure you have a diverse range of recipes so you can cater:
- Cocktail hours that require only hors d’oeuvres
- Breakfast and luncheon events
- Multi-course dinners
- Special catering events like weddings and retirement parties
Next, create sample menus for each of these event types, including options for guests with food allergies and dietary restrictions (vegan, vegetarian, kosher, etc.).
Once you have a clear vision for your food, start working on a business plan so you can get that mouth-watering menu out into the wild!
Create a business plan and secure startup funding
So, now you know what you want to serve. But how can you turn plates into a profitable business? Creating a formal business plan is a key step to outlining a budget and securing startup capital from private investors or lenders.
Your catering business plan should include the following:
- Name – Pick something short and catchy. It should be easy to spell, pronounce, and Google.
- Market analysis – What does the local catering industry look like? How can you differentiate your catering service from competitors?
- Startup costs – How much will it cost to lease a commercial kitchen space and stock it with necessary cooking equipment? How much will you need to invest in table settings, transportation, serving equipment, and cleaning supplies? How much are your licensing and business insurance costs?
- Marketing plan – How will you get the word out and attract potential customers? Are you targeting a specific industry, demographic, or event type?
- Staffing plan – How many line cooks and servers will you need to cater a corporate event? How much will you pay your staff? Is there a minimum gratuity customers must pay?
- Profit/margin analysis – What will you charge clients in order to cover your costs and make a profit? What will the profit margins be for different event types?
- Break even point – At what point will you have recouped all startup costs?
Once your stellar business plan has helped you cook up some startup funds, it’s time to get out there and start promoting your business!
Promote your services
Follow your marketing plan and consider promoting your mobile catering business through:
- Local advertising in newspapers and magazines
- Social media including business accounts on Instagram and Facebook
- Cross-promotion with other local businesses who have similar customers
- A website with pictures of finished dishes and catered events/li>
- Yelp and other local or industry directories
You could even consider donating your services to a local nonprofit. This can help to create a positive image of your business, acquire event photos for future marketing, and promote your business all at once. Take plenty of pictures of the event, and invite some local press or influencers for additional exposure.
The instant you start working your first event, you immediately expose yourself to liability.
What could go wrong for a caterer?
An event attendee could have a severe nut allergy that’s triggered by a cross-contaminated appetizer. You might spill wine on a guest’s shirt. The A/V technician might spill his wine on your cooking equipment.
Should a potential client or event attendee sue you, you could find yourself responsible for attorney’s fees, as well as any damages. Your business plan could be up in smoke before you’re even close to your breakeven point!
This is why most caterers need:
- General liability insurance – Also called commercial general liability insurance, this policy can provide coverage for potential client and third-party claims of property damage, bodily injury, or personal and advertising injury. It can provide a defense, cover court filing costs, or pay for damages.
- Commercial property insurance – You’re investing significant startup capital in your cooking and catering equipment. Unfortunately, general liability insurance only covers damage to third-parties’ —not your own supplies! Commercial property insurance can provide coverage for lost and damaged equipment.
- Workers’ compensation insurance – If you have at least one employee, your state’s employment laws may require you to hold workers’ compensation insurance.
Check your state laws, industry licensing requirements, and event venue rules to see if you’re legally required to take out business insurance. Even if you’re not, it can help protect your bottom line.
Thimble’s Caterer Insurance
As a new caterer, you may only have gigs a few weekends a month, or experience seasonality. Do you really need to take out an annual insurance policy?
Nope! With Thimble, you can take out Caterer Insurance by the hour, day, or month. That way, you’re only paying for coverage when you’re working and actually need it.
At Thimble, we know you have bigger fish to fry than worrying about insurance. That’s why we make it fast and easy to get covered. Just enter your ZIP code along with your desired coverage length and policy limits, and you’ll receive an instant quote. Purchase with a click, and make changes on the go from the Thimble mobile app.
As a caterer, your passion for food helps events and celebrations shine. To get started on turning your passion into profits, just:
- Pick a unique cuisine that lets you cook from the heart and makes you stand out
- Create a solid business plan and secure startup capital
- Start promoting your business
- Cover your legal liability with insurance
- Nail your first event!
Catering can be a challenging industry to break into, but as long as you have a thoughtful business plan, you’ll be prepared for whatever comes your way. We wish you luck in bringing home the bacon!