A home-based catering service is far more feasible than starting a restaurant from scratch with far less financial outlay and expenses such as property rental and equipment. If you have a talent for cooking restaurant-comparable meals and some of your own recipes, this can be an exciting career if you love preparing food. We help you with this undertaking by outlining these easy steps.
Taking Care of Legal Requirements
You will need several licenses. The first is a health permit for food services. The health department is responsible for issuing this and will come to your premises to check compliance. Once the license has been issued, they could come back at any time and if they find any non-compliance issues, you will lose the license.
You can only operate as a legitimate business once you obtain a business license. This is issued by the local government. Costs include the license and a filing fee. They will also vary by location. There are companies that assist with your application, and they will also charge for their services.
A fire department permit is for equipment and appliances that may cause a fire hazard. Your local fire department will give you the price. They may inspect your premises.
Don’t try to avoid the necessary licenses as they are a legal requirement, and you could face legal action if you operate illegally. Your business will also be closed.
You can register a catering business as a ‘trading as’, but this makes you personally liable and puts your assets at risk. Alternatively, you can form a partnership if you are working with a partner or you can set up a limited liability company. You will need liability insurance in case a guest gets sick from your food. Insurance for your business premises and equipment is also essential.
Choose a name for your business and make sure no other company is using it. Depending on the size of business you are comfortable with, you should consider a website, and also use Instagram and Facebook in your marketing plan.
Working Out Your Finances
Property rental is probably the most expensive item on your budget. You will need equipment, such as caterer’s fridges and three or more stoves if you plan to do this full-time. Even if you opt to run your business part-time, you will need various items such as pots and pans, serving platters, table linen, tongs, etc. Make a list of everything you have to purchase and cost it. Consider how you will transport food to venues and if you have a suitable vehicle. You will also have to wear suitable clothing when catering an event. Get your chef pants and other accessories so that you can dress the part.
All of these things form part of your expenses. Another key aspect of what it will cost to run your business is the food you have to buy. This will be determined by the type of caterer you want to be. Then you should prepare menus and determine what you will charge to determine your income.
If you need to get a bank loan or line of credit, you need to know how much you are paying upfront and every month, and how much income you will generate. The bank will want to see a business case or plan and your break-even calculations.
Once you have followed these steps, you will be ready to start looking for clients.
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