How to Start a Catering Company: Checklist

Starting a catering company can be a great way to turn a passion into a profession. For those who are new to entrepreneurship and don’t know where to start, this checklist on how to start a catering company outlines the steps needed to launch a successful catering business.

1. Form a Legal Entity

When learning how to start a catering company, the first step is forming a legally recognized organization. After choosing a name, it’s time to decide on a business structure. For a smaller business, an LLC may be appropriate, but if the business has potential to grow into a large company, a corporation may be better. For more recommendations, consult with a lawyer.

2. Open a Bank Account

Many entrepreneurs argue that a business doesn’t really exist until it has a bank account. So, after completing the legal paperwork, the next step for US-based caterers is obtaining a tax identification number (EIN number) and then using the EIN number to open a bank account. Be sure to consider multiple banks to find the one with the lowest fees and best hours.

3. Obtain Licenses & Insurance

Obtaining catering licenses and insurance is an important step in the initial phase of launching a catering business. Although general liability insurance is always advised, the specific licenses and permits required vary by location. Check with the local health department for more specific information.

4. Find a Niche

There are many types of commercial caterers, some focusing on social events like wedding receptions and others on corporate events like board meetings. No business can be everything to everyone, so it’s important to find a target market. By focusing on a niche, you can streamline your production process and target your marketing efforts to maximize your success.

Focusing on catering business events such as board meetings can be a profitable niche for a new catering company.

5. Develop a Menu

Developing a menu is one of the most important steps when starting a catering company. Caterers face unique challenges in that they have to make, transport and serve large quantities of food, so menu items must be selected carefully. Although a dish might taste good, if it’s time-consuming, fragile, heavy or temperature-dependent, it’s not ideal for catering.

6. Set Prices

Deciding how to charge for catering is no easy task. New caterers should start by looking at the prices of local competitors and decide if their product is more or less valuable. It’s also important to look at production costs and decide whether to charge per person or per menu item. Once again, analyzing how other caterers price their products and services is a good starting point.

7. Locate a Commercial Kitchen

Most states and municipalities require that food served to the public be prepared in a kitchen that complies with local health guidelines. Since home kitchens almost never qualify, new catering companies will have to rent time and space at a commercial kitchen. It’s also important to remember that successful catering companies will likely outgrow their shared kitchen at some point and need to invest in their own facility.

8. Buy Catering Equipment

Caterers prepare food in one place and serve it in another, so they need special catering equipment. Chafing dishes, disposable plates and insulated coolers all make sure the food arrives fresh, delicious and at the proper temperature, so caterers need to keep plenty in stock. Along with portable refrigerators and catering trucks, new caterers should prepare to invest a significant amount of money in supplies.

9. Hire Employees

Any catering business that’s more than just a part-time hobby will need employees. With staffing costs such as yearly salaries, health benefits and food service staff uniforms running into the thousands per year, employees are likely to be a catering company’s biggest expense. As with the commercial kitchen and catering equipment, new caterers need to budget accordingly.

10. Market Your Business

A successful, profitable business needs clients, so marketing should be a high priority for a new catering business. Sending out mail flyers, building a website, growing social media and running online ads are all effective marketing strategies to get the word out about a new business.