Start a Catering Business
Changing American lifestyles have created new opportunities for caterers. Sure, weddings, banquets and large dinner parties will always need your skills, but catering is entering homes as individuals and families are looking at how to get wholesome food on the table — and this trend can help with steady business.
“Americans are time-crunched, but we still want to be able to provide healthy, home-cooked meals for our families,” says Jennifer Lewis, founder of Small Food Business, a Seattle, WA–based consultant to artisan food entrepreneurs. “Ongoing meal delivery is a growing opportunity for caterers that helps even out their revenue stream.”
If you’re thinking of starting a catering business, whether fueled by this new trend, your love of cooking or something else, here are the factors you need to consider.
Essential Catering Equipment
Defining your business’s scope, menu and target customers will help determine what catering equipment and supplies are necessary.
While specific needs vary, Larry Walter, co-founder of Tasty Catering in Chicago, recommends the following catering supplies to any new caterer:
- Electric holding ovens and other food-warming equipment for plated meals and hotel pans that will be placed in a chafer or on a buffet, or to hold hot food before and during food service
- Hot or cold boxes and/or bags for food transportation
- Food and beverage carts to transport food around a hotel or banquet hall or to an off-site venue
- Chafers
- Trays, platters and serving bowls
- Coffee urns
Some caterers create a competitive advantage by providing china, glassware, flatware and linens, while others may opt to only offer paper or plastic tableware.
Setting Up Your Business
You need to research the health permits and business licenses required in your state, city and county. Because most states prohibit the use of an existing home kitchen for a catering operation, you’ll need to find or create a commercial kitchen to prepare your food. A shared-use kitchen leased out to multiple caterers could be a practical option, or you could rent out a restaurant kitchen during hours the establishment is closed.
“Keep an eye on Craigslist for listings that come up for commercial kitchens or other caterers subleasing their space,” says Lewis. “A growing number of U.S. cities also have kitchen incubators that provide workspace for entrepreneurs.”
Determining Your Rates
A common mistake caterers tend to make is not charging enough for their services. “Keep track of your time, and truly figure out your costs — from food to utilities to insurance to the gas in your car,” advises Denise Vivaldo, a Los Angeles, CA–based culinary consultant and author of How to Start a Home-Based Catering Business.
There’s a learning curve for new caterers to understand how to price their jobs so they’re profitable. “You’re worth more than you think you are,” says Mary Weary, owner of Menu Maker Catering in Brentwood TN. “Initially, I was taking everything that came across my door. But I learned to be selective and understand that some jobs just aren’t worth taking on.”
Now Weary only considers jobs that meet a specific minimum budget and include a group large enough to justify the labor required to serve them. “It just isn’t profitable for me to cook for a bridge club of four people,” she says.
“New companies should focus on being known for excellence in a few key areas, not a shotgun approach to catering with all types of cuisine and a ‘we can do that’ approach,” says Lisa Richards, founder and CEO of Festivities Catering in San Diego. “Catering is not a business for sissies. A new company has to commit and plan for three years, work hard and have a dynamic marketing plan.”
Is Catering for You?
While potentially a rewarding career, catering is not for everyone. It takes a lot of work and time, so you need to be passionate and committed.
“So many times, people think if they like to cook, they want to cater,” says Weary. “Being a caterer also involves a lot of logistical challenges: transportation, getting the right catering equipment, knowing what to buy. It can be extremely hard, both physically and mentally.”
Multi-tasking is an essential skill for any catering operation. “You’ll be a cook, accountant, salesperson and marketing expert,” says Vivaldo. “You should like wearing many hats.”
Mike Plotnick is a writer, publicist and social media convert who helps businesses elevate their stories. Based in St. Louis, Mike has overseen PR and communications programs for a diverse range of organizations. He enjoys fitness, chocolate and the St. Louis Cardinals. Follow Mike on Google+.
