How to start a catering business

From business gatherings to birthday parties, the most memorable events in life often have one thing in common: a seamlessly catered culinary experience.

Data agrees that catering is in demand now more than ever—one survey found an overwhelming 92% of caterers experienced revenue growth in 2022. Yet despite the clear profit potential, figuring out how to start a catering business is often the real challenge.

Whether you’re a seasoned chef or a budding restaurateur, read on for a comprehensive guide of everything you need to go from catering concept to thriving enterprise in 8 steps.

Step 1: Find your niche

Launching a successful catering business begins with some detective work. Consider both your target market and how your offerings fit into it. This will help you decide on factors such as:

• Catering type –  Will you primarily cater corporate events, concessions at public venues, or weddings and social gatherings?

• Level of service – Do you intend to focus on food prep and delivery, or will you handle everything from setup to cleanup? 

• Menu concepts – Are there any local market gaps that can set your service apart, like ethnic specialties? 

Such market research establishes a critical foundation, enabling informed decisions for the steps that follow.

Step 2: Choose the right location

As a caterer, location choice often boils down to two options: renting a catering kitchen/commercial kitchen or operating on-site at your client’s venue. Both options have their pros and cons. For example, on-site operations cut down expenses, but limit your customer base to those with a kitchen already in place. 

Operating out of a ghost kitchen is another cost-effective option, as they’re optimized for catering and delivery without the overhead of larger-scale commercial spaces.

Step 3: Develop a business plan and secure funding

One study found that startups with a business plan are 16% more likely to succeed, and catering businesses are no exception. When writing a business plan, aim to include details such as:

• An executive summary of your business idea and goal
• Research on your target market and competition
• Plans detailing your operations, financial projections, and marketing initiatives

Since opening a catering business costs close to $50,000 on average, a comprehensive business plan is essential for winning over potential investors or lenders.

Step 4: Acquire equipment and supplies

One of the biggest starting expenditures for caterers lies in acquiring cooking, refrigeration, and serving equipment. You might utilize a rental supplier for tables and dishware to keep initial costs low, even factoring these expenses into your overall catering service package. 

Smaller catering operations may opt to source inventory from discount clubs like Costco, scaling up to commercial suppliers as the business expands.

Step 5: Design and price a mouthwatering menu

An enticing menu is central to a successful catering business, serving as both its soul and selling point. Unlike traditional restaurants, a catering menu must be adaptable to various events and customer needs. 

Consider a few elements of a catering menu that captivates and sells:

• Core offerings, such as appetizers, main courses, sides, and desserts
• Service packages tailored to specific events, such as weddings or corporate functions
• Customizations that cater to a variety of dietary requirements

You’ll also want to determine a pricing strategy for your menu—one that allows you to remain competitive while still fostering a healthy profit margin.

Step 6: Recruit and train your team

As your catering business grows, so will the need for a skilled and reliable team. 

Look for passionate individuals who align with your business’s values and goals. Such intrinsic motivation is often more crucial than immediate skill, as it fuels the desire to learn and excel.

To that end, you’ll also want to incorporate an in-depth onboarding program and regular training sessions, ensuring your high standards of service are upheld.

Step 7: Obtain licenses and permits

When running a catering business, you must comply with local health department regulations and obtain the necessary licenses and permits. These may include: 

• Food handler’s permit
• Health department permit 
• Business license

Requirements differ by area, so be sure to research whether you have all the necessary documentation before launching your business. 

Step 8: Market your business

To attract clients, advertising is key. According to one survey, the top sources of leads for caterers are:

• References – High-quality service naturally leads to locals spreading the word about your business.

• Relationships – Networking with businesses in adjacent sectors, like event planners and wedding coordinators, can promote organic growth.

• Reviews – A responsive digital presence and positive online reviews are strong drivers of new leads.

Combining online outreach with direct networking can help you build a strong client base and enhance business visibility.

Scale your operations with a ghost kitchen

Ultimately, the recipe for a successful catering business boils down to planning, hard work, and a dash of passion. But as your catering business grows, you may need help scaling operations due to limited kitchen space or rising rental costs. 

That’s where ghost kitchens come in. 

Ghost kitchens, also known as virtual or dark kitchens, are commercial spaces designed specifically for food businesses to prep meals for delivery or catering. With a ghost kitchen provider like CloudKitchens, you can streamline operations and expand your catering services—all without the hassle and overhead of a brick-and-mortar location. 

Consider partnering with CloudKitchens so you can focus on what you do best: delivering delicious meals and top-notch service to your clients. 

See locations in your area and get started today.

Explore ghost kitchen locations across the US:

• Ghost kitchens in Seattle
• Ghost kitchens in San Francisco
• Ghost kitchens in LA
• Ghost kitchens in NYC
• Ghost Kitchens in Toronto
• Ghost Kitchens in Atlanta
• Ghost Kitchens in Dallas
• Ghost Kitchens in Chicago
• Ghost Kitchens in Denver
• Ghost Kitchens in Miami

DISCLAIMER: This information is provided for general informational purposes only and the content does not constitute an endorsement. CloudKitchens does not warrant the accuracy or completeness of any information, text, images/graphics, links, or other content contained within the blog content. We recommend that you consult with financial, legal, and business professionals for advice specific to your situation.

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Sources: 

Nuphoriq. Catering Industry Statistics. https://nuphoriq.com/catering-stats/

Harvard Business Review. Writing a Business Plan Makes Your Startup More Likely to Succeed. https://hbr.org/2017/07/research-writing-a-business-plan-makes-your-startup-more-likely-to-succeed

Starter Story. How Much Does It Cost To Start A Catering Business? (In 2024). https://www.starterstory.com/ideas/catering-business/startup-costs

Catering By Design. Everything You Need to Know About Catering. https://www.catering-by-design.com/blog/everything-you-need-to-know-about-catering/