Starting a catering business requires researching small business rules, obtaining licenses, creating a business plan, deciding on a target market, developing a menu, and pricing products. It is important to spend time in the planning stage.
Starting a catering business is a popular venture, especially for those who have spent a lot of time in the restaurant business, as well as housewives who have taken time away from the business world while raising families. Experience in cooking and food preparation is certainly the first step, but there are other issues that must be addressed when starting any business. Whether you’re a seasoned veteran of the restaurant world or a skilled home cook, the first step in starting a catering business is to research the small business rules as they apply to each person’s location.
Many states will require a special license to start any type of business, and like providing meals from food eaten by the public, there may be extra stipulations to follow. Preventing foodborne illness requires proper food preparation, handling, and preservation. A call to your local health department is the best place to start. This will likely involve an on-site inspection of restoration preparation before a permit is issued. A separate business license will likely require an application and fee paid to the state of residence, depending on your desired financial and legal setup.
A business plan must be completed in which an aspiring caterer will determine the location, target customers, menu, prices and suppliers. A lot of thought must be given to the local market for catering services, and providers need to strike a balance between their specific culinary talents and the real needs of the community they will serve. Decisions on how money will be handled and recorded, payment policies, staff procedures and all processes must be determined prior to opening the catering business. Changes can be made as the catering business progresses, but the rules must be in place from the start.
The biggest decision will be which of the two categories will the vendor focus on: corporate catering or social catering? Corporate caterers provide boxed lunches, on-site food preparation for special occasions, business event catering, and company holiday party catering. Social caterers often provide food to individuals at social events such as weddings, birthdays, anniversaries or other celebrations. Once the category is decided, the caterer can develop a suitable menu.
Price is perhaps the most difficult factor to consider when setting up a catering business. It is not enough to guess the value of the product. Overhead, materials, labor, and profit must be added together before pricing. Financial records must be maintained and all taxes must be paid. As with any business, the best course of action is to spend a considerable amount of time in the planning stage.
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