Depending on where you live, you probably will have to work with several levels of government to be sure that you satisfy all the legal requirements. Local zoning laws may affect where you can do your cooking and how much of your catering business you can actually handle from home. You’ll probably need some sort of permit from the city you live in. It may not be fun and easy getting everything set up legally, but when it’s required you don’t really have a choice.
Starting a business illegally is a bad idea.
State and local taxes
There may be state and local sales taxes to pay. Every state in the U.S. has a website, so you should be able to find this information on the internet. Pay special attention to which goods and services are taxed.
There are links to the business section of every U.S. state official website (as well as the main portal for each state) here.
Health department regulations
Since you’ll be dealing with food and people, you’ll need to find out your local health department regulations. Health department regulations alone may determine whether you can run your catering business completely from your home, or if you’ll need to do some on-site cooking and preparation, or even put together a kitchen somewhere else.
Document everything
As you do your research, learn to document all of your business-related conversations. Later on, when you’re trying to remember exactly who told you what about which form or regulation, you’ll be glad you kept some notes.
Now that you’re sure you want to start a business, and you have lots of good reasons why, the next question to ask yourself is:
Why do you want to start a catering business?
Start-up costs
You can often start a catering business out of your home with a small initial investment. At the beginning, you may be able to minimize start-up costs by renting some items.
Of course it’s also possible to start big if you have the money, skills, and experience.
The catering market
The catering business is less sensitive to swings in the economy than other types of businesses. In good times or in bad, there always seems to be a market for catering.
- Catered parties for rich clients will always be in demand.
- Businesses of all sizes require catered lunches, parties and meetings.
- Birthday parties, graduation parties and wedding receptions often require catering services.
- As people become busier and have less time to plan social events, the demand for catering services will increase.
Your personal characteristics
To succeed in the catering business, it will help if you have certain personal characteristics. Think about your answers to the following questions:
- Do you like working with people?
- Do you seem to have an intuition about what people enjoy?
- Do you have a passion for cooking?
- Do people believe you have a knack for preparing tasty dishes?
- Are you a good planner?
- Are you an effective manager?
- Do you look forward to new experiences?
- Do you like challenges?
- Do you enjoy meeting new people?
- Are you able to work under pressure?
You don’t have to answer “Yes” to all of these questions to succeed. But if you answered “No” to all of them, you should seriously consider other business start-up opportunities.
Test the waters
If you really think that catering is the business for you, why don’t you test the waters first? Ask your friends or your office if you could “pretend” cater a dinner party or lunch meeting. That is, let them pay you for the cost of the groceries, and you do the work for free. This will let you experience first-hand the challenges of planning and executing the kind of events you hope to do as a business later.
All of us have dreamed about starting our own business at one time or another. But transforming dreams into reality takes thoughtful planning, careful analysis, and hard work.
What are your motivations for starting a catering business?
Take a good look at your own motivations for starting a business. Why do you want to start your own catering business?
- I want to be free from the daily 9 to 5 routine.
- I want to be my own boss.
- I want to improve my standard of living
- I’m bored with the job I have now.
- I can provide a service that’s in demand
There are no right or wrong answers. Starting a successful business takes persistence and dedication. If you start out knowing why you want to succeed, it will help you later when you’re asking yourself why you wanted this in the first place.
The United States Small Business Administration (SBA) has some excellent publications available at no cost. Visit their website and take advantage of this information. One document that’s especially helpful to review early in your planning process is the Checklist for Starting a Business.
If you’re an American taxpayer, you’ve already paid for these SBA resources. Use them!
