There are a lot of online search queries on how to start a catering business, but most resources rarely provide an encompassing answer. We aim to fix this issue in this post dedicated to anyone considering establishing a catering business, including those who want to know how to start a catering business from home.
Whether you plan to start big or small, consider this a blueprint for maximising your chances of success. In today’s digital world, one of the main components your catering business will need is an easily changeable online menu, which you can design with a free menu maker like Menuzen.
What You’ll Learn In This Guide: Preamble
We’ll unravel a single powerful method or series of steps that guide you to investing in the right catering business. Your start-up will likely succeed if you follow the steps this guide outlines. This is because they show you what a well-informed investor would do.
The focus is on precision market intel and proper use of resources. You shouldn’t waste money on irrelevancies or overspend on what may come off as necessities.
Provided there are potential customers where you intend to run a catering business, and provided you can offer outstanding catering services and implement the third stage of this article correctly, you’ll get your share of clients regardless of your business location or the competition.
In other words, establish your business anywhere near your target market, and people will still seek you out.
Stage I: Preliminary Research
The preliminary research will prepare you to complete the rest of the steps successfully. It’s critical, especially for those who want to learn how to start a catering business from home with no money. You should also take advantage of the free menu templates on Menuzen to showcase your catering business’s services once complete.
1. Determine your market’s catering culture.
It’s essential to understand the catering culture of your target market, even if you’ll work from home without a massive monetary investment.
The catering culture of a city or town comprises the foods, drinks, and other services typically provided by local caterers. You should investigate and obtain a complete list of these foods and drinks and know which ones suit specific occasions.
You can’t serve any food you feel like at an event. Certain catering services have a collection of acceptable foods and beverages you can decide to offer.
In Melbourne, for example, certain corporate catering may offer AM/PM packs and breakfast boxes, but private catering may not feature such offers. At a private catering event, you can expect to find individual sweets, savoury platters, fruit selections, sweet platters, individual savouries, BBQ packages, salad platters, buffets, etc.
Occasions that typically use caterers vary from country to country or city. You need to know these events so you know who to target in your marketing campaigns.
Again, using Melbourne as an example, caterers get hired for corporate gatherings, weddings, birthdays, festive seasons, engagements, random parties, etc. In a nutshell, one of the critical catering business requirements is knowing the foods, beverages, and occasions that use caterers so you can plan your business accordingly.
2. Outline all the catering services available.
There are many types of catering services you can offer. However, as a beginner, it may be better to take on a few and add more later.
For starters, consider making a comprehensive list of all catering services in the city or town you plan on establishing your business.
Here are some prominent ones:
- Wedding catering
- Corporate catering
- Private catering
- Buffet catering
- Sit-down catering
- Food truck catering
- Restaurant catering
- Bento catering
- Social event catering
- Concession gathering catering
- Cocktail reception catering etc.
3. Research customer availability for all catering types.
We don’t mean all catering types in the world. Rather, limit your research to the types available within your target market.
Customer research appears early here because only when the catering service has a promising customer outlook should you include it among the services to take off with. Even if you follow all steps correctly, establishing a catering service with little demand won’t be rewarding, and you’ll be forced to change course or close.
Figure out any legal requirements.
This is just a subset of step 3 and applies if you have specific dishes in mind that the locals aren’t used to. Some states or municipalities have stringent health or legal restrictions on certain foods like alcohol, caffeine, pork, etc.
To illustrate this, a bird called ortolan is sometimes a significant ingredient in popular French dishes like cassoulet but is banned in America and Europe due to its somewhat arguably inhumane means of preparation and likely extinction. Similarly, farm-raised salmon is legal in America but banned in Australia and New Zealand due to likely astaxanthin dye content introduced into their feed to give them their coral colour.
Foods that local caterers usually serve are legal, but any new cuisine you want to introduce should have its legality confirmed. This is particularly important as it’s one of those catering business requirements that’s landed many businesses in hot water with the authorities in recent years.
4. Choose the catering services to offer.
Even if you’re going to start from home, you ought to decide on the type of catering service to offer.
Will you limit yourself to cocktail drinks or offer small finger foods and large meals too?
You usually don’t take this decision without investigating your market, as people ought to know and like what you offer. The three steps discussed above should provide all the info you’ll need to choose a catering service.
Most importantly, your preferred catering service should have a promising customer outlook. Otherwise, your business will fail right from this step.
You should decide only after acquiring sufficient market research data on customer availability and preferences. Don’t assume anything and act randomly — always confirm your assumptions.
After deciding on those dishes and services to offer, you can now design an elegant menu using our catering menu template as an excellent starting point.
5. Self-evaluate yourself for readiness.
Are you geared up to provide impeccable service for your chosen catering category?
Adequate knowledge of your market’s cuisines is among the mandatory catering business requirements. You must also be able to deliver food to the venue, serve, and clear the tables professionally. Without mastering the cuisines that people like most in a particular catering type, your business can’t survive — unless you hire capable help.
You’ll likely provide inaccurate advice to your clients without adequate knowledge of the city’s catering culture and cuisines. Attendees are bound to complain if they notice something strange in the consumables or service delivery.
If someone hires you and later discovers from attendees that people didn’t enjoy the food, your client won’t be happy and won’t recommend you to others. In fact, they would discourage friends and loved ones who want to hire you.
Nonetheless, bad customer reviews are bound to happen regardless of your quality of service. Hence, you should know how to tackle bad restaurant reviews.
If you don’t know how to prepare a particular cuisine, learn or hire someone who does. That’s how to start a catering business even without adequate cooking skills.
6. Research your potential customers.
This is a different kind of customer research from the previous one discussed. While our previous customer research focused on “availability,” here, you’ll need to study the customer up close.
First, you want to know what they like and dislike about catering services. You’ll then use the knowledge for marketing (we’ll discuss this in the implementation stage).
Your advertising verbiage should contain messages that customers want to hear. This will make them more responsive to your social media promotions.
So, how do you get this info?
The best way is to hear from the customers themselves. You can also obtain this information from event organisers.
Follow up on the top catering services in your town or city and see what customers say about them. Analyse the positive and negative reviews, especially concerning the catering service you want to offer. Study as many reviews as you can to gain a deeper understanding of what pleases or displeases customers.
7. Conduct competitive research and analysis.
Don’t focus too much on customers whilst forgetting competitors. If possible, determine how many direct and indirect competitors you’re up against. Profile them and discard those you’re likely to outperform.
Catering businesses with more negative than positive reviews will be easy to outstrip, provided you can avoid their mistakes or deliver a better customer experience. Your primary focus should be those that are popular with customers since they’re the ones that’ll likely give you a hard time.
One of the vital catering business requirements is studying their value propositions and determining what makes them popular among customers. To do this, find out how they market their services to customers.
Start by checking their websites, social media pages, and connections or partners (such as event organisers). Study the words and materials they use in persuading clients. All these will be available on their websites and social media.
This info will reveal how hard you must work on marketing and advertising. Check out our article on how to start a restaurant business to learn more about competitive analysis.
8. Identify the most affordable supply sources.
Suppliers can drive you out of business by snatching more money than necessary from your profit or revenue. Always go for the most affordable sources, provided they’re of acceptable quality.
If supply companies seem too expensive, consider sourcing your ingredients directly from the local markets or farmers. Find out the cost of each ingredient because this info is critical to planning your catering menu and writing a perfect business plan. Our guide on the importance of menu planning outlines more information on why this is vital.
How much does it cost to start a catering business in Australia if suppliers are affordable? Considering that a restaurant would gulp up to AU$650,000, you can budget anywhere between AU$100,000 and AU$400,000 for a modern catering business in Australia. However, understand that this isn’t a fixed figure.
9. Determine legal and licensing obligations.
Every country, state, and municipality may have unique rules and licences for caterers. You need to know these laws and fully comply with them to avoid any problems in the future. Some of these requirements can be so complex that hiring a licensing agent to do them would be easier.
For example, obtaining a catering business licence in Australia involves the following steps:
- Project and licence scoping
- Compliance audit, document compilation, and project works/courses
- Application submission
- Approval or rejection
You’ll also be required to meet the criteria on the:
- Notification, licensing
- Food safety supervision
- Food safety controls
- Skills and knowledge
- Premises construction
- Legislation & standards
Since we won’t go in-depth on licences in this post, we suggest you see our article; “what licenses are needed to start a catering business?”
Stage II: Start-Up Cost Evaluation
You can start estimating the costs by obtaining all the necessary information in the preliminary research stage. This is critical to writing a comprehensive business plan and spending capital effectively. You can omit the cost of a digital menu since you can use a free menu maker like Menuzen.
Also, some entrepreneurs start their catering businesses from home without investing in cooking or delivery equipment, let alone renting an exclusive location.
If you want to know how to start a catering business from home with no money or little financial investment (albeit there are still startup costs), you can skip the next step we’re about to discuss. However, you’ll still need it when the business grows and you want to invest more money to accommodate it.
10. Determine the costs of renting (or buying) a property.
How much would you spend on renting a shop?
Location and size will determine this expenditure. How critical “location” is to any food business depends on the type of business.
For optimal exposure, your catering business should be in public sight. A visible and accessible location is a built-in marketing tool that, if augmented with proper signage, can generate a steady stream of clients without intensive marketing efforts. The more traffic in front of your shop, the more in-office visits you’ll receive.
However, if a super-exposed location is hard to come by, this shouldn’t discourage you or kill your dream of owning a catering agency. Among all food service businesses, catering is more like the only one that location that doesn’t impact significantly. It has a wider radius or deeper market penetration than other food services like restaurants.
To learn more about estimating the cost of establishing a food business in a particular location, check our post on “how much does it cost to build a restaurant?”
So, how much does it cost to start a catering business in any country? Follow the below steps to determine your locality’s approximate cost.
11. Find out how much equipment for cooking, delivering, serving, and table clearing would cost.
Depending on your budget, you can buy new or used equipment, borrow them from rental companies, or rely on equipment that some customers may provide. If you aren’t financially buoyant, we suggest renting your commercial kitchen catering equipment from companies like Catering Equipment Warehouse in Australia or other companies in your country, city or town.
Just evaluate how much it would cost to rent or buy all the equipment you’ll need to provide the type of catering services you choose from the above steps. If you’ve already formed a team or workforce, involving them in the process is a good idea, as they can recommend specific equipment and how to get them. List all the tools you need and how much each will cost.
12. Determine staffing requirements and associated costs.
Some of your employees should have experience in the city’s catering industry. This is important if you want to start by delivering spectacular service.
You’ll have to find suitable hands by contacting event planners, hiring HR (human resources) agencies, or advertising the position online. As a result, you’ll need to write a compelling job description — you may use our waiter job description post as a guide.
Your staff should be knowledgeable and skilled in preparing the cuisines you choose to provide. You shouldn’t hire more than you need at the beginning. Focus on evaluating how many workers you’ll need and their respective salaries.
13. Outline initial running costs.
Your market research exercise should uncover enough information to help you decide how much you’ll need for a 6–12 months’ running cost if things go as planned. It’s better to have a 12-month budget for running your business regardless of profit or revenue. You can slash how much it costs to start a small business in catering by paying employees per contract instead of a fixed salary.
14. Determine the fees for legal licensing and permits.
Remember the legal issues discussed previously?
You need to figure out how much they’ll cost you.
A licensing agent in the area can quickly provide this information for free. However, if you intend to hire a licensing agent for permits and licence procurement, you must also factor in their fee — perhaps by requesting a quote.
15. Find out the costs of insurance coverage.
It’s good to have your business insured if possible. This proactive move can protect you from lawsuits and losses resulting from unforeseen circumstances.
Typically, you’ll have several insurance options, such as general liability insurance, workers’ compensation insurance, etc. Choose the most affordable one that can fully cover your interests.
16. Determine marketing costs.
You’ll spend money to market your service. The recommended platforms for advertising catering services are Facebook, Instagram, TikTok, and Google My Business.
Facebook advertising, for example, can cost anywhere from a few hundred to several thousand dollars a month, depending on the model used. You can go by cost-per-click (CPC), cost-per-thousand-impression (CPM), cost-per-like (CPL), or cost-per-download (CPA). These will cost you an average of $0.97, $7.19, $1.07, and $5.47 each, respectively. You may also choose SEO optimisation, where you make your website more relevant and increase its ranking on search engines.
Stage III: Implementation
Having gathered all the information above, it’s time to implement them for your catering business to emerge in its physical form. At this point, you already know how much it will cost to start a catering business in your location, so take the following steps.
17. Create a business plan.
Use the information from all previous steps to write a thorough business plan that includes even the most minor details. You’d find writing the business plan easier if you already have all the required information.
If you don’t know how to write a business plan, don’t despair. Just hire a professional business plan writer online, discuss the details of your business with them and wait for them to deliver a stellar copy you can use to implement your plans and convince investors.
With a comprehensive plan for your catering business, the implementation won’t be complex, and you’re less likely to forget to buy certain equipment or subscribe to critical services. It’ll also be easier to amend specific priorities and get the correct expenditure forecast over an extended period. The concluding sections of our post on how to start a restaurant business have more details on business plan writing.
18. Choose a location.
So, after finding out the costs of hiring a property for your business in different neighbourhoods, you need to select the best from all available options. It’d be nice if you could find a location with lots of foot or car traffic but little or no catering businesses. Your shop front and any signage will attract eyes from afar since you’re the only one around or one of a few.
Ensure wherever you choose is accessible by foot and by car because difficult or no access will deter many potential customers from visiting you. An accessible catering building in a city’s outskirts is better than the exposed one that’s out of reach.
We know people can order your services online, but most clients would love to see your property or even inspect your kitchen before enlisting. This can be bad news for those seeking to learn how to start a catering business from home, as inspections can feel pretty invasive.
19. Secure a supply source.
Your catering business needs reliable suppliers; otherwise, you’ll keep apologising to customers. Catering orders can come in at any moment, sometimes just days before the occasion. You don’t always know what the customer’s choices would be, and as a result, you can’t stock up on all ingredients in advance.
Food waste can be commonplace in your business if you stock up on all catering ingredients before receiving orders, as our menu planning guide outlines. Of course, you can order and store ingredients with long shelf lives; however, those required fresh may not stick around until customers show up. Hence, ensure you secure a reliable provider for all ingredients of your catering menu.
20. Secure funding if necessary.
You’ve got in-depth information on the market, figured out the things you need, estimated their costs, and written a business plan. These details are more than enough to approach investors if you can’t fund the business from your savings.
Investors would be interested in the business plan and outlook. As a result, one of the critical catering business requirements is being engaged in your business plan writing process from day one, even if you hire an agency. You got to know the content to the letter because investors who know their onions will ask plenty of questions to confirm their money isn’t headed to ruins.
21. Register a business name.
You need to concoct a self-explanatory business name that’s easy to remember. People should be able to decipher your type of business from its name.
Some passersby may just see it in a flash while driving by. They may later want to look you up on social media or Google. Great business names are easy to recommend to others and even more straightforward for them to remember.
Additionally, you must decide what type of company registration to use.
22. Buy or rent equipment.
You can buy only new equipment if you have sufficient funds. Otherwise, eBay is an excellent source of used equipment at discounted prices. Alternatively, some rental companies can provide everything you need.
23. Build your marketing infrastructure.
A great marketing strategy is a lifeline to many businesses with an online presence. Modern customers don’t like businesses they can’t research online.
If information about your business is scarce online, people won’t trust you enough to place orders without visiting your location in person. Most potential customers will just skip you over. That said, marketing infrastructure is a significant aspect you can’t overlook when seeking how to start a catering business from home.
You need a website for your catering business, something you can do for free with Menuzen’s free restaurant website builder. Also, we recently published an excellent resource for designing your food business website. Be sure to look it up when the right time comes.
Additionally, you need social media pages that display plenty of textual and graphic content about your business. Potential customers should be able to see your menu offers on social media and your website.
Menuzen offers a free digital menu to publish on Facebook or other social media platforms. You can tweak/modify any of our free menu templates to create your dream menu for display on your social media pages. To maximise this publicity strategy, we suggest you adopt the best social media campaigns.
24. Launch a grand opening ceremony.
This is the last step but not the least. Your invitees should be mainly event organisers across a broad spectrum of society. These should be personnel responsible for organising events in companies, churches, and other organisations. Party legends, celebrities, influencers, and business owners should also be on your invited list of guests. Make sure to pick a suitable location for your grand opening event!
This post has explained all the steps needed to establish a prosperous catering business. It provides a comprehensive picture of how to start a catering business from scratch. The information presented here is brief — some of the steps need additional reading to understand and carry them out properly.
In today’s digital world, offering an online menu is essential to running a successful catering business. As a free menu maker, Menuzen has several free menu templates to choose from to get started. In fact, our catering menu template offers just what you need.
Sign up for free today to design your dream menu for your catering business!
Frequently Asked Questions
How do I get clients for catering?
To get clients for catering, you need to have a popular business location, as well as build and maintain a robust online presence via social media and websites. Most importantly, work towards establishing a network of potential leads such as event organisers, influencers, party freaks, business owners, etc.
What are 5 common catering services?
The five most common catering services include:
- Wedding catering
- Corporate events catering
- Restaurant catering
- Food truck catering
- Social event catering
How do you start in the food catering business?
To start a food catering business, you need to do some serious market research, even if you have catering experience. Observations alone can’t reveal specific information critical to starting a successful catering business. Next, evaluate the start-up costs and round off by implementing your plans.
What makes a successful catering business?
What makes a successful catering business is your type and quality of service, online presence, reputation, and above all, enough profit to keep the business running.