how to write a business plan for catering business

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How to Start a Catering Business in 9 Steps

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The catering industry attracts a broad range of entrepreneurs. Maybe you’re an excellent cook, maybe you love throwing parties, or maybe you’re interested in event planning and want to get the ball rolling by catering.

Or maybe you’re like Dannella Burnett, of Gainesville, Georgia, who formed her catering business back in 2009, and your reason is simple and sweet:

“I figured if I could cook for other people and put food on their plates, I could put food on my family’s plate,” Burnett says of her decision to start Oakwood Occasions.

But as Burnett knew even in the nascent stages of starting a catering business and expanding to event planning, the business is about much more than putting food on plates. It’s about thinking your way through stressful situations, planning for the unexpected, and most importantly, running a business just like you would any other.

In this guide, we are going to take you step-by-step through everything you need to know about how to start a catering business. With a little help, you'll be delighting guests at parties, events, and festivals in no time.

How to start a catering business in 9 steps

Before you get to the following steps to starting a catering business, note that you should decide on the type of catering business you want to start before learning how to start a catering business.

Some caterers only do cocktail reception drinks and small finger foods, others do buffet-style catering, and some do the sit-down catering that you might see at a banquet or wedding. Once you know what kind of catering you want to do, you can get on to the next steps.

Step 1: Choose your business name and business entity type

Once you have the type of catering business you want to start in mind, you can move on to choosing a name for your business and defining the entity for it as well. You'll want to choose a name and make sure it's available in the state where you're opening your catering business. In most states, you can check business name availability online with the Secretary of State.

You'll also need to choose the business entity you want your business to operate as. Here you've got a lot of options depending on a few things, including whether you want to go it alone or not.

If you decide to operate as a sole proprietor, your business will be unincorporated and be owned by you alone (or you and your spouse). If you want to have a partner for your business, or want to avoid taking on all personal liability for your company, you can choose to register your business as a general partnership, a limited partnership, a limited liability partnership, a limited liability company, or another business entity. Each offers different protections for the partners and the business.

Step 2: Write a business plan

Once you have your business name and entity chosen, the next step on the "how to start a catering business" checklist involves writing a business plan. This will take some work, but it will pay off in the long run because you'll have the plan to fall back on and it can help you know what to expect while running your business.

You can use a business plan template or you can make a plan on your own. When you do make the plan, it should include quite a bit of research. You'll want to include an overview of your company, a market analysis, your business's organization, the specific products and services you'll be providing, and your marketing and financial plan. If that sounds like a lot, don't worry—you can always add to your plan as you learn more about the catering business world.

Importantly, though, you should also research your competition and identify potential customers. Is there a particular type of catering that is needed in your area that is currently underserved? For example, if you live in an area with a lot of golf courses, you may find that they are always in need of caterers for weekend events. Your market research into the needs in your area can go a long way to helping you sustain your business.

Part of your business plan for how to start a catering business should also include the vendors and suppliers you plan to use. Look into sourcing all the supplies you need, including linens, utensils, china, even tables and chairs for some events, and of course the food. When it comes to non-food items, Burnett suggests renting first, before buying things outright.

“At the beginning, you can rent anything you might ever want or need,” she says. “And renting is great: You know what the cost will be and you don’t have the upfront cost of purchasing something.

“But at some point, though you want to buy those things yourself because you still can charge for them and basically you’re paying for the ownership of them. And they ultimately pay for themselves.”

When it does come time to buy, equipment financing can provide you with the funding you need to cover the cost of supplies.

Step 3: Register your catering business and get an EIN

Depending on the business entity you chose, your business's name might by default be your name. If you want to change that, you might need a DBA or "doing business as" name. You'll want to register your business and its name with the state you plan to operate in.

For a catering business, because you're handling food, this might also require some other registrations depending on the rules in your state. The health department might need to check out the place where you're cooking and preparing the food you'll be serving, for example.

You'll also want to apply for an employer identification number also called an EIN. You can apply for one online from the IRS in just minutes and enjoy the benefits of having one for years to come. It can serve as a business tax ID number and help you do other business tasks like applying for a credit card and paying your employees.

Step 4: Get all licenses and clearances needed to start a catering business

As with most industries involving food prep, you can’t just, well, do it. You need to obtain a business license from the state, as well as a food handling license. You also need to pass a county or state health inspection—a residential kitchen likely won’t cut it, so consider looking for a commercial kitchen that has already been approved.

Some other requirements you might need to consider include workers' compensation insurance and permits or licenses to work out of certain venues—the monthly or annual costs of which can cut into profit margins.

If you’re unsure of what will be required, get in touch with your local Chamber of Commerce , Small Business Development Center , or the Small Business Administration to find out more.

It's not a bad idea to consult a lawyer in your area who specializes in the food or service industry for help filing everything and getting all of the registrations squared away before you start cooking.

Step 5: Determine your pricing

Pricing your work depends greatly on where your business is located and what kind of catering you do. Many businesses create price tiers that provide a certain level of service and amenities for various amounts. Burnett never went down that route.

“I started off doing custom proposals for people, and I’ve stayed with them throughout these nine years,” she says. “It takes a lot more time, but a lot of my proposals get accepted, rather than a package deal where it may or may not fit what someone is looking for. If they don’t need something, if it doesn’t pertain to their event, it’s not going into their pricing. If they need more, they pay for more; if they need less, they pay for less."

To get an idea of what costs what, Burnett says that her price per person has varied from $7-$8, for light appetizers for cocktail hour, up to $80 for filet and lobster.

“It varies because we do buffets, plated dinners, simple appetizers, or [events] where we’ve just dropped off food and they’ve served it themselves—to very high-end menus with unique ingredients,” she explains.

Step 6: Hire, train, and outfit your staff

It’s unlikely you can cater an event all by yourself, so staff is a requirement. Hiring and training staff is something that came organically for Burnett, but that might not be the case for you, so do whatever is best for your business is recommended here.

“At the first location, we brought on staff members one by one as we needed people. There was no real formal training from the beginning," she says.

You may be able to find staff just as easily, either by word-of-mouth or by combing your own network. But you might also need to reach out on foodservice-oriented job-seeking sites, or look into how competitors found their staff. Just keep in mind that what works for you when you're starting a catering business might not be what works once your business starts growing.

"But when we moved into our new location, at the Hall County Government Center, we opened up a café, coffee shop, and expanded the catering business at the same time. Since we were going to have in-house staff as well as catering staff, we had to go through a much more extensive training period.”

Here’s another place where having capital at the start comes in handy: If you’re hiring and training staff before they actually work an event, you need to set aside training dollars.

Additionally, uniforms, including vectorized logos, can be “really cheap or really expensive,” in the words of Burnett.

“Hey, I want aprons with logos on them—getting that logo vectorized for $75-$80, then $5-$7 a piece depending on how big you want the logo. Then you have to buy the apron. If you need 20, 30, 40 of those—that adds up,” she says.

Step 7: Market during your own events

When it comes to marketing and advertising your business, Burnett has one suggestion that trumps all the rest.

“When you’re putting food in somebody’s mouth, that’s the best time to find your next client,” she says. “It’s through the guests that are attending the events you’re catering for.”

Otherwise, it depends on what kind of catering you specialize in. If you focus on weddings, you’ll want to attend bridal shows—which involve bringing food samples and sometimes buying a booth. Corporate catering might involve more focus on LinkedIn advertising, where you can buy leads; you might also pay people to knock on doors and pass out fliers to bigger businesses.

“Really, it’s about networking. A lot of word of mouth, a lot of referrals,” she says. When you're just starting a catering business, that’s where the putting food in someone’s mouth tactic comes in.

Step 8: Get funding

Burnett made the decision to start her business out of necessity after her husband lost his job in the wake of the 2008 financial crisis. She had previously worked in food and retail management, and she fell back on that experience when it came time to find a new source of income.

“A woman at my church said, ‘Why don’t you reopen your catering business here at the church?’ I didn’t think you could do that, but we called the health department and had them do a site visit at the church kitchen. It was deemed sufficient for commercial use, so I had my church kitchen licensed as a catering commissary, and I launched the business with zero capital, zero plan. Nothing but me, myself, and I,” Burnett explains.

Burnett found herself in business well before she expected to be. Despite making things work, she says luck took the place of capital and wouldn’t recommend that path to other future caterers.

“There are some things that I could look back on that I would say either by sheer doggedness or dumb luck, the next right thing did happen,” she says. “Was it more stressful because there wasn’t a plan at the beginning or there wasn’t capital? I think definitely.”

Burnett notes that, for the catering industry, access to capital is especially important: “Most small businesses fail because they don’t have the capital to get them through the ebbs and flows. And in something like the catering business, there should naturally be some ebb and flow, whether it’s the seasonality of the type of catering that you do, or the calendar—seasons and holidays.”

If you aren't as lucky as Burnett, you will probably need some funding to get your catering business off the ground and through slower months. Knowing how to acquire capital is one of the keys to figuring out how to start a catering business. There are plenty of routes you can go to acquire small business funding to get your business going.

If you want to go the traditional route, you can go for a traditional term loan, a business line of credit , or maybe a business credit card . Once you're established you can look into getting an SBA loan .

Step 9: Plan for emergencies — both financial and others

You should have extra capital when you start out, and continue to budget wisely as you go, because you never know when something will go wrong in the catering industry.

"Things break, so you have to replace them. Maybe you started off with china for 200 and now you only have china for 150 because they break,” says Burnett, listing the things that caught her off-guard when starting out.

“Repairs to vehicles: Catering can be hard on your vehicles, so you’ll need replacements to tires. The price of gas, when it went sky-high, it had an impact. Food was costing more. And people understood that food cost more to a certain extent, but people still had in their head that they need to do a lunch for $10 or $15 a person, and when the price of gas and food has gone up, it’s easy for that not to be profitable.”

But preparing for the unexpected is about more than budgeting. Most events are catered at a venue that can be 30 minutes, an hour, or even a few hours away from the kitchen. That can put you in a tight spot.

“The ability to be a MacGyver is a requirement. Every venue is different, and if you forget something, you’ve gotta figure out how to make it work,” Burnett says.

How to start a catering business: The bottom line

Catering isn’t an easy business. Burnett says you need to “know what you’re getting into,” due to the physical and demanding nature of the work.

“You can be a great cook, and that doesn’t necessarily make you a great caterer,” she says.

But Burnett was able to build a massively successful business—so much so that she actually began tapering off of catering in 2019 to focus more on event planning—off little more than an idea that was born in a church kitchen.

How Much Do You Need?

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

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BUSINESS STRATEGIES

How to create a catering business plan

• Jeremy Greenbaum
• 10 min read

When starting a business , crafting a meticulous and transparent business plan is essential. A catering business plan is a meticulously crafted manuscript that outlines your company’s ambitions, tactics and financial projections. This invaluable document not only charts a precise course when starting your food business but also serves as a culinary compass. Keep reading to learn how to write a strong catering business plan.

Looking to promote your business online? Try Wix’s website builder .

Writing a comprehensive catering business plan is crucial for the success of your venture. It provides a roadmap for your business, helps attract investors and funding and guides your decision-making process regardless of your type of business . Here are the six main parts of a catering business plan:

Executive summary

Company and domain names

Market analysis and research

Operations plan

Marketing and advertising plan

Financial plan

01. Executive summary

The executive summary is a concise overview of your catering business plan. It should provide a clear and compelling summary of your business idea, goals and strategies. This section is typically written last but appears at the beginning of the business plan.

An effective executive summary for a catering business plan should include:

A brief description of your catering business and its unique selling proposition

An overview of your target market and how you plan to capture it

A summary of your financial projections, including revenue targets and profitability

An outline of your marketing strategies and how you intend to promote your services

02. Company and domain names

Choosing the right business name for your catering venture is crucial for building brand awareness and trust. It should reflect your company's values, be memorable and resonate with your target audience. Consider using a business name generator (or specifically a restaurant business name generator ) for inspiration and brainstorming ideas.

When selecting a domain name for your catering website, it's important to choose something that is easy to remember, relevant to your business and available. Conduct a domain name search to check its availability and consider best practices (e.g., keep it short and simple, avoid numbers and hyphens, use keywords and check to make sure it aligns with your brand identity and values).

Once you’ve landed on a business name and structure, follow the steps for registering your business .

03. Market analysis and research

Including market analysis and research in your catering business plan is essential for understanding the competitive environment and building a better business strategy. Conducting market research will help you identify your target market, assess customer preferences and understand the demand for catering services in your area.

An overview of the catering industry, including trends and growth opportunities

An analysis of your target market, including demographics, psychographics and buying behavior

A competitive analysis, identifying key competitors and their strengths and weaknesses

A SWOT analysis (strengths, weaknesses, opportunities, threats) to assess internal and external factors that may impact your business

04. Operations plan

The operations plan outlines the practical aspects of running your catering business. This includes details about location, premises, equipment and staffing needs.

Key elements to consider in your operations plan:

Location and premises: Choose a location that is easily accessible for clients and has sufficient space for food preparation, storage and office operations. Determine the layout and design of your premises to optimize workflow and create an inviting atmosphere for clients.

Equipment: List the necessary equipment for your catering business, such as commercial kitchen appliances, serving utensils and transportation vehicles.

Staffing: Define the roles and responsibilities of your staff members, including chefs, servers, event coordinators and administrative personnel. Consider their qualifications and training requirements.

05. Marketing and advertising plan

The marketing and advertising plan lays out the strategies you will use to promote your catering business, including your plans to create a business website . It helps you identify the most effective channels to reach your target audience and maximize your marketing budget.

Consider the following when creating your marketing and advertising plan:

Target audience: Define your target market segments based on demographics, psychographics and event types.

Branding: Develop a strong brand identity that reflects your catering business's values, mission and unique selling proposition. (If you need help creating a logo, check out these food-related logo ideas and use a logo maker .)

Pricing strategy: Determine your pricing structure based on factors like food costs, overhead expenses, competition and desired profit margins.

Promotional channels: Identify the most effective channels to reach your target audience, such as social media advertising, email marketing, event sponsorships or partnerships with wedding planners or corporate event organizers.

Marketing campaigns: Plan specific marketing campaigns tailored to different segments of your target market. This could include seasonal promotions, referral programs or discounts for repeat customers.

By incorporating these strategies into your marketing and advertising plan, you can effectively promote your catering business and attract clients.

06. Financial plan

The financial plan is a crucial part of any catering business plan. It outlines how your business will be funded initially and provides a timeframe for reaching profitability. Remember to include:

Startup costs: Estimate the initial investment required to start your catering business, including equipment purchases, leasehold improvements, licenses, permits and marketing expenses.

Revenue projections: Based on market research and pricing strategies, project your anticipated revenue over the first few years of operation.

Expenses: Identify all the ongoing expenses involved in running your catering business, such as food costs, labor, rent, utilities, insurance and marketing expenses.

Cash flow statement: Prepare a cash flow statement that outlines the inflows and outflows of cash in your business on a monthly or quarterly basis. This will help you anticipate any cash flow challenges and plan accordingly.

Profitability analysis: Assess the profitability of your catering business by calculating gross profit margins and net profit margins. This will give you an understanding of the financial health of your business.

Catering business plan examples

These draft business plans provide a starting point for developing your own catering business plan. Customize them according to your specific business goals, target market and unique selling proposition. A well-crafted business plan will set you on the path to success in the competitive catering industry.

Example #1: full-service catering business

ABC Catering Company is a full-service catering business specializing in corporate events and weddings. We offer a wide range of menu options, focusing on fresh, locally sourced ingredients and exceptional service. Our target market includes businesses in the downtown area seeking high-quality catering for their meetings and events, as well as couples planning their dream weddings. With our experienced team and commitment to excellence, we aim to become the go-to catering provider in the region. Our projected revenue for the first year is $500,000, with a net profit margin of 15%. We will leverage digital marketing strategies, including social media advertising and partnerships with local event planners, to reach our target audience.

Company name and domain name

Company name: ABC Catering Company

Domain name: abccateringcompany.com

The catering industry is witnessing a transformative shift, driven by a growing demand for exceptional dining experiences at events ranging from weddings to corporate gatherings. As clients increasingly seek convenience and sophistication, there is a rising preference for professionally curated dining solutions.

ABC Catering Company is strategically positioned to cater to a discerning clientele, primarily focusing on upscale weddings, corporate events and social gatherings. Our target demographic includes professionals, high-income individuals and event planners who value creativity, diversity and flawless execution.

Within our competitive landscape, ABC Catering Company faces established players like XYZ Culinary Creations and Gourmet Gatherings Inc. XYZ Culinary Creations stands out for its innovative presentations but struggles with consistency, while Gourmet Gatherings Inc. excels in personalized experiences but lacks comprehensive menu options for specific dietary needs. Through a holistic understanding of our market and competitors, ABC Catering Company is poised to make its mark by capitalizing on trends, addressing client preference, and navigating challenges effectively.

Location: ABC Catering Company will be situated centrally, boasting easy client access and ample parking, with premises encompassing a commercial kitchen, storage areas and an integrated office space.

Equipment and resources: Our operations will be powered by a cutting-edge commercial kitchen, an array of elegant serving utensils, dedicated transportation vehicles and essential office equipment.

Staffing and expertise: Our skilled team—comprising accomplished chefs, meticulous servers, creative event coordinators and capable administrative personnel—will orchestrate exceptional catering experiences.

Hiring and qualifications: Selection will be based on qualifications and industry experience, ensuring that our chefs, servers, event coordinators and administrative personnel uphold our commitment to excellence.

Target audience: Our prime focus lies on capturing the interest of downtown businesses and engaged couples in the wedding planning process.

Branding: Forge a robust brand identity that encapsulates our values, mission and distinctive selling proposition.

Pricing strategy: Strategically set prices, factoring in food expenses, operational costs, market competition and desired profit margins.

Promotional channels: Harness the potential of social media advertising, email campaigns, event sponsorships and collaborations with wedding planners and corporate organizers for optimum outreach.

Marketing campaigns: Devise targeted marketing endeavors tailored to different subsets of our audience, encompassing seasonal offers, referral initiatives and loyalty discounts.

Startup costs: The estimated initial investment required is $200,000 for kitchen equipment, leasehold improvements, licenses, permits and marketing expenses.

Revenue projections: Based on market research and pricing strategies, projected revenue for the first year is $500,000.

Expenses: Ongoing expenses include food costs, labor, rent, utilities, insurance and marketing expenses.

Cash flow statement: A monthly cash flow statement will be prepared to track inflows and outflows of cash.

Profitability analysis: Gross profit margins are projected to be 60%, with a net profit margin of 15%.

Example #2: corporate catering business

XYZ Corporate Catering is a specialized catering business focusing on providing high-quality food and service for corporate events. We offer customized menus that cater to the specific needs and preferences of our corporate clients. Our target market includes businesses in the technology and finance sectors. With our experienced team of chefs and event coordinators, we aim to become the preferred catering partner for corporate events in the region. Our projected revenue for the first year is $400,000, with a net profit margin of 20%. We will utilize targeted email marketing campaigns and establish partnerships with event venues to reach our target audience effectively.

Company name: XYZ Corporate Catering

Domain name: xyzcorporatecatering.com

XYZ Corporate Catering operates within the thriving corporate events sector, where businesses seek top-notch catering solutions for meetings, conferences and other professional gatherings. This segment is characterized by a growing preference for high-quality, customizable menus that cater to diverse dietary requirements and corporate themes. As the demand for elevated culinary experiences in the business realm increases, XYZ Corporate Catering is poised to capitalize on this trend, delivering exceptional service and tailored offerings to meet the unique needs of corporate clients.

Our target audience encompasses a wide array of businesses, from small enterprises to large corporations, spanning diverse industries. We are well-positioned to cater to these businesses through our flexible menu options, streamlined delivery and commitment to professionalism. The competitive landscape includes a mix of established catering services and local vendors, with key differentiators being the quality of offerings, reliability of service and expertise in handling corporate events. XYZ Corporate Catering's focus on culinary excellence, efficient logistics and strong client relationships will set us apart in this competitive arena, positioning us as a trusted partner for corporate event catering needs.

Location: XYZ Corporate Catering will thrive in a strategically located facility, housing advanced kitchens, storage solutions and dedicated administrative spaces.

Equipment and resources: Our operations will be fortified by cutting-edge kitchen equipment, elegant serving tools and efficient delivery vehicles.

Staffing and expertise: Our adept team—composed of seasoned chefs, professional servers, meticulous event coordinators and capable administrative personnel—will ensure flawless execution.

Hiring and qualifications: We will selectively hire individuals with expertise in the catering industry, focusing on chefs, servers, coordinators and administrative staff with a track record of excellence.

Target audience: Our primary focus will encompass downtown businesses and engaged couples in the wedding planning process.

Startup costs: The estimated initial investment required is $150,000 for kitchen equipment, leasehold improvements, licenses, permits and marketing expenses.

Revenue projections: Based on market research and pricing strategies, projected revenue for the first year is $400,000.

Profitability analysis: Gross profit margins are projected to be 70%, with a net profit margin of 20%.

Why should you create a catering business plan? Top benefits to consider

A well-written business plan provides valuable guidance and direction. It helps you define your goals, identify potential challenges and develop strategies to overcome them. Among its many benefits, a business plan can aid with:

Funding: A comprehensive business plan is essential for attracting investors or raising money for a business from financial institutions. It demonstrates the viability of the catering business and showcases the potential return on investment.

Resource planning: A catering business plan will help you understand what resources, supplies and staff are required to start and operate the business successfully. It allows for proper planning and allocation of resources. To learn more about what it takes to start different catering businesses, read our guides - How to start a food truck business , How to start a food prep business , How to start a frozen food business .

Competitive insight: By conducting market analysis and research as part of the business plan, you can gain insights into the competitive environment. This information helps in developing effective marketing strategies and positioning the catering business in the market.

Risk management: A well-prepared business plan allows you to identify potential risks and develop contingency plans to mitigate them. It provides a framework for risk assessment and management, ensuring the long-term success of the catering business.

Financial planning: One of the crucial aspects of a catering business plan is the financial plan. It includes details about initial funding, projected income, expenses and profitability. This information is vital for you, your investors and your lenders to assess the financial viability of the business.

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