How to Start a Catering Business in 10 Steps

You've been cooking for family gatherings for years. People always say "you should sell this." They're right—and here's exactly how to start a catering business. 

No fluff about market statistics. Just the practical path to start a catering business from your kitchen to your first paid event in 60-90 days.

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Your Fast-Track to Starting a Catering Business

Here's what you need to launch:

1. Start from home if your state allows it (most do)
2. Get certified and licensed—budget 4-6 weeks for approvals
3. Pick your niche—corporate lunch delivery is the easiest entry point
4. Budget $2,000-$10,000 for equipment and licenses
5. Price at 3x ingredient cost to cover labor and overhead
6. Land your first 3 clients through your network
7. Hire part-time staff for event support as needed
8. Track labor costs religiously—they'll make or break your margins
9. Claim your free Google Business Profile and partner with local event planners
10. Reinvest early profits into better equipment

Timeline to first paid event: 60-90 days if you start today.

Can You Actually Start a Catering Business From Home?

Yes—and most caterers do. 

Starting a catering business from home is legal in most states, but you'll need to navigate cottage food laws and local health regulations. 

The good news? Home-based catering gives you the lowest barrier to entry and lets you test your concept before committing to expensive commercial space.

Check your state's health department website for specific cottage food laws and home kitchen requirements. You'll likely need a food handler certification, business license, and regular health inspections even when working from home.

Step 1 – What It Actually Costs to Start a Catering Business

The first question most people ask when learning how to start a catering business: what will this actually cost?

Home-Based Minimal: $2,000-$5,000

• Food handler certification: $7-$50 (you + any helpers)
• Business license: $50-$400+ (varies by city/county)
• General liability insurance: $500-$1,000/year
• Basic equipment upgrades: $1,000-$2,000 (transport carriers, prep containers)
• Initial inventory: $500 (ingredients for first few events)

Home-Based Equipped: $5,000-$10,000

• Everything above, plus:
• Transport equipment: $500-$1,500 (insulated carriers, chafing dishes, coolers)
• Commercial-grade tools: $1,500-$3,000 (industrial mixer, large pots, sheet pans)
• Website + initial marketing: $500-$1,000

Commercial Kitchen Access: $10,000-$25,000

• Kitchen rental deposit: $1,000-$5,000 (shared commercial space)
• Expanded equipment: $3,000-$8,000 (professional gear)
• Vehicle or delivery setup: $3,000-$10,000 (van with proper storage)
• Higher insurance coverage: $1,500-$2,500/year

The hidden cost nobody warns you about: Labor becomes your biggest ongoing expense at 20-35% of revenue. Every hour spent prepping, traveling, setting up, serving, and cleaning counts. If you don't build these costs into your pricing from day one, you'll work yourself into the ground for minimum wage.

Labor costs can make or break your margins. Track hours and calculate labor percentages in real-time to protect your 7-15% profit margins before they disappear.

Step 2 – Get Legal: Licenses, Permits & Timeline

This is the blocker that trips up most new caterers. Start your paperwork immediately—it's the longest wait in your 60-90 day timeline to launch.

Week 1-2: Federal & Basic Setup

• Apply for your EIN from the IRS — free, approved instantly online
• Register your business name with your state
• Set up business bank account (requires EIN)

Week 2-4: State & Local Permits

• Complete food handler certification online (2-4 hours, get this done first)
• Apply for business license through city/county clerk's office
• Submit food vendor permit application to state health department
• Schedule health inspection if your state requires it

Week 4-6: Insurance & Final Details

• Secure general liability insurance (get quotes from 3+ providers)
• Add commercial auto coverage if using your vehicle
• Confirm all licenses arrived and are properly displayed
• Create digital folder with copies of everything

State-Specific Wildcards:

Requirements vary dramatically by location. Check your state's rules on:

• Cottage food laws—some states allow extensive home production, others ban it entirely
• Commercial kitchen mandates—when you must use licensed facilities
• Alcohol permits—separate process if offering wine/beer service

Apply for everything simultaneously in week 2. Don't wait for one approval before starting the next application. The 4-6 week timeline only works if you're running parallel processes.

Once licensed, store all certifications digitally where health inspectors and staff can access them during audits.

Step 3 – Create Your Catering Business Plan

Most guides on how to start a catering business recommend a 40-page business plan. Forget that.

What You'll Cook

Start with 3-5 signature items you can execute flawlessly every single time:

• Menu items that travel well and hold temperature for 2+ hours
• Dishes you can prep in advance to reduce event-day stress
• Dietary accommodations — at minimum, offer vegan and gluten-free options
• Recipes you can scale easily from 20 to 100 servings

Test your menu on friends and family. If you can't nail it consistently in your home kitchen with distractions, you won't nail it under event pressure.

Who You'll Serve

Corporate lunch delivery (easiest entry):

• Predictable orders, weekday schedule
• Minimal on-site service required
• Repeat customers build stable revenue

Private parties (higher margin):

• More equipment and staff intensive
• Weekends and evenings
• Builds through word-of-mouth referrals

Wedding catering (most profitable):

• Requires experienced team, extensive equipment, higher insurance
• Save this for after you've proven yourself with simpler events

Your Pricing Formula

Base calculation:

• Ingredient cost × 3 = base price
• Add: Hourly staff rate × projected hours
• Include: Delivery, setup, cleanup in your packages
• Target: 7-15% profit margin after all expenses

Example for 50-person corporate lunch:

• Food cost: $200
• Base price: $600 ($200 × 3)
• Labor: 5 hours total × $20/hour = $100
• Delivery/setup: $50
• Total quote: $750 ($15/person)

First-Year Revenue Goals for Your Catering Business Plan

Part-time home-based: $30,000-$50,000 realistic

• 2-3 events per week
• Average order: $300-$500
• You handle most work solo or with one helper

Full-time with staff: $75,000-$150,000 achievable

• 5-8 events per week
• Average order: $500-$1,500
• Small team of 2-4 part-time workers

Your actual revenue depends on event frequency, average order size, and repeat clients. One wedding at $5,000 beats ten $200 lunch orders—but requires far more resources to execute.

Step 4 – Choose Your Niche (But Start Simple)

Not all catering is created equal. Some niches let you start tomorrow with minimal investment. Others require teams, equipment, and experience you don't have yet.

Easiest Entry Points for a Small Catering Business:

Corporate lunch delivery:

• Predictable orders (same offices, weekly recurring)
• Weekday schedule keeps weekends free
• Drop off, set up buffet, leave

Drop-off catering for small parties:

• No staff needed on-site
• Scalable from your home kitchen
• Perfect for testing pricing and recipes

Private dinner parties:

• Higher margins than lunch delivery
• Smaller guest counts (8-20 people)
• Cook in client's kitchen often possible

Save These For Later:

• Wedding catering requires experienced team, extensive equipment, and zero margin for error. 
• Large events (100+ people) need commercial kitchen access and coordinating 5-10+ staff. 
• Multi-course plated service demands professional training and precise timing.

What Makes a Catering Business Successful

Start with what you can execute alone or with one helper. Flexible schedule and low overhead beat high revenue with chaos. Weekend work is unavoidable—clients host events when they're off work. One bad review tanks your local reputation, so master the basics before scaling.

Step 5 – Equipment Essentials (What You Actually Need)

You don't need a fully equipped commercial kitchen to start a catering business. You need food to arrive at the right temperature, presented well, and safely.

Must-Haves (Budget: $1,500-$3,000)

What you need to start a catering business from home:

• Insulated food carriers (hot and cold) for quality transport
• Cambro containers in various sizes
• Chafing dishes if doing buffet service
• Digital instant-read thermometers
• Quality transport coolers
• Basic serving utensils and platters

Home Kitchen Upgrades:

Your home kitchen needs minor upgrades, not replacement:

• Extra refrigeration (garage fridge works fine)
• Large pots and sheet pans from restaurant supply stores
• Food processor or stand mixer for volume prep
• Restaurant-grade shelving for dry goods storage

Where to Buy Catering Equipment

• Restaurant supply stores (new, see before buying)
• Restaurant auctions (incredible deals when restaurants close)
• Webstaurant, Amazon (comparison shop online)
• Facebook Marketplace (inspect used equipment locally)

Buy transport equipment first. A $300 insulated carrier is more valuable than a $300 stand mixer when starting out. You can prep slowly—you can't fix food that arrives cold.

Step 6 – Price Your Catering Services (Without Guessing)

Pricing mistakes are why many people who successfully start a catering business still go broke. Price too low, you work for free. Price too high, you get no clients. Here's the formula that actually works:

Basic Formula:

(Ingredient cost × 3) + (Staff hours × $15-$25/hour) + delivery = Your price

The 3x multiplier covers food cost (33%), labor (20-35%), overhead (15-20%), and profit (7-15%).

Real Example: Corporate Lunch for 20 People

• Food cost: $100 (ingredients for pasta, salad, bread, dessert)
• Base price: $300 ($100 × 3)
• Labor: 3 hours prep + 1 hour delivery/setup = 4 hours × $20 = $80
• Delivery/disposables: $20
• Total quote: $400 for 20 people = $20/person

How Service Model Affects Pricing:

Drop-off delivery: 3-4 hours total, 20-30% margin Buffet with setup: 5-7 hours, 1-2 staff, 30-40% margin Full-service plated: 8-12 hours, 1 server per 10-15 guests, 40-50% margin

Build These Costs Into Every Quote:

Your time, transportation, disposables, cleanup, and administrative overhead (15-20% of food cost).

Common Pricing Mistake:

Forgetting ALL labor hours. Count shopping, prep, travel, setup, service, breakdown, return travel, cleanup, and equipment washing. That "simple" lunch delivery isn't 1 hour—it's 4-5 hours of your day.

Menu Pricing Tiers:

• Basic menu: $12-$18/person (sandwiches, simple salads, basic sides)
• Standard menu: $18-$30/person (hot entrees, multiple sides, dessert)
• Premium menu: $30-$50+/person (specialty proteins, complex prep, upscale presentation)

Start with a simple menu at competitive rates. Increase prices as you build reputation, reviews, and demand. It's easier to raise prices with a waitlist than to lower them because nobody's booking.

Step 7 – Hire & Schedule Your Team

Here's what nobody tells you about catering: the food is the easy part. Managing a catering business means coordinating part-time staff with irregular schedules for events that change weekly.

Roles You'll Need:

• Prep cook: 2-4 hours before event (chopping, cooking, portioning)
• Delivery driver: Transport, setup, breakdown
• Servers: 1 per 25-30 guests for buffet service, 1 per 10-15 for plated
• Cleanup crew: Often same team as setup, different role

Staffing by Event Size:

• Drop-off (20-50 people): You alone or +1 helper, 4-5 hours total
• Buffet setup (50-100 people): You +2-3 staff, 6-8 hours total
• Full-service (100+ people): You +4-6 staff minimum, 8-12 hours total

How to Find Catering Staff:

Start with part-time, event-based workers:

• Culinary students need real-world experience and references
• Restaurant workers want flexible side income on their days off
• Parents with daytime availability while kids are in school
• Retirees looking for supplemental income without full-time commitment

Post jobs on Indeed, local Facebook groups, culinary school job boards, and Craigslist. Pay $15-$25/hour depending on role and experience. Event-based work means no benefits needed, but you must track hours accurately for tax purposes.

The Scheduling Challenge Unique to Catering:

Unlike restaurants with set shifts seven days a week, catering has:

• Variable event schedules (mostly weekends and evenings, totally irregular)
• Last-minute bookings requiring you to staff up with 48 hours notice
• Different labor needs per event (corporate lunch = 2 staff, wedding = 8 staff)
• Prep time vs. event time coordination (who preps Thursday for Saturday event?)
• Overtime risk with fluctuating hours (someone works 15 hours one week, 3 the next)

The real problem:

You book a Saturday wedding that needs 5 staff. Three people confirm Monday. Two days before the event, one texts at 11pm: "Sorry, can't make it." 

This is why most catering businesses either stay tiny (owner does everything) or fail during growth (can't manage the chaos).

Most new caterers use group texts and paper schedules until their first disaster. Track staff availability and labor costs per event from day one—before you're texting at midnight trying to find someone who can work tomorrow.

Step 8 – Land Your First Three Clients

You need three clients specifically—not five, not ten. Here's why:

Client #1 proves you can execute. Client #2 proves it wasn't luck. Client #3 gives you testimonials, referrals, and cash flow to continue.

Client #1: Your Network (Lowest Friction)

Announce your catering business to friends, family, neighbors, coworkers, church members—everyone you know.

Your offer: Cater their next gathering (birthday, graduation, office lunch) at 25% off your normal rate.

Your goal: Perfect execution, glowing testimonial, professional photos, permission to share on social media.

Don't pick someone who'll take advantage. Pick someone who'll give honest feedback and spread the word if you nail it.

Client #2: Strategic Partnership

Target: Local event planner, venue coordinator, corporate office manager, or wedding venue.

Your offer: Complimentary tasting (3-4 menu items) for their next event or meeting.

Your goal: Repeat relationship where they refer clients to you, referrals to their network, credibility boost from established business endorsement.

Event planners and venue managers need reliable caterers in their back pocket. Become their go-to option by proving you're consistent, professional, and easy to work with.

Client #3: Paid Event at Full Price

Source: Word-of-mouth from clients 1 and 2, or a referral from your strategic partner.

Your goal: Prove your pricing works in the real market, get honest reviews on Google or Facebook, establish yourself as a legitimate paid service.

This is the scary one—someone who found you organically and is paying your full rate. It validates that your pricing and positioning work outside your immediate network.

Where NOT to Find Early Clients:

Skip paid ads until you have 10+ reviews. Don't compete on catering platforms yet—you'll lose on price to caterers with economies of scale. Hold off on cold outreach to businesses requiring references you don't have.

Three perfect events create momentum. Ten mediocre events create nothing.

Step 9 – Market Your Catering Business

After you start a catering business, marketing determines whether you grow or stall. Marketing a catering business isn't about being everywhere. It's about being found when someone needs a caterer.

Digital Foundation (Do These First):

Google Business Profile (absolutely critical): Claim your free listing, add photos of food and events, collect reviews from every single client. Shows up in local searches for "caterers near me."

Simple website: Menu with pricing ranges, contact form, photo gallery, client testimonials, your story.

Instagram for food photos: Behind-the-scenes prep, finished dishes, happy clients at events.

Local Partnerships to Market Your Catering Business:

Event venues (offer 10% referral commission), wedding planners (be on their preferred vendor list), corporate office managers (regular weekly lunch contracts = stable revenue), church event coordinators (community events need feeding regularly).

These partners become your sales team. Every successful event you cater for their clients makes them look good, so they keep recommending you.

Word-of-Mouth Accelerators:

• Business cards at every event
• "Catered by [Your Business]" tent cards on buffet tables
• Referral discount (give past clients $25 off when they refer someone who books)
• Deliver consistently exceptional food and service

What Not to Waste Time On Early:

Paid social ads, elaborate website features, professional logo design, catering marketplace platforms (high commission cuts margins).

Focus on nailing your first 10 events. Great food and reliable service will market your catering business faster than any advertising campaign.

Step 10 – Manage Operations & Know When to Scale

Operations separate successful catering businesses from those that burn out or fail during growth.

Key Metrics to Track for a Successful Catering Business:

• Revenue per event: Are you growing average order size?
• Labor cost percentage: Are you maintaining 20-35% of revenue?
• Food cost percentage: Are you staying within 28-32% of revenue?
• Profit margin per event: Are you hitting 7-15% after all costs?
• Client retention rate: Are repeat clients building sustainable business?

Track these numbers per event, not just monthly. One unprofitable wedding can wipe out profits from five lunch deliveries if you don't know your costs.

When to Hire Full-Time Help:

Booking 3+ events per week consistently (not seasonally—every week). Turning down business due to capacity. Prep taking more than 20 hours/week.

When to Get Commercial Kitchen Space:

Health department requires it. Home kitchen can't handle volume. Need storage for equipment. Commercial kitchen rental typically costs $15-$50/hour for shared space, or $1,000-$3,000/month for dedicated space.

Red Flags You're Scaling Too Fast:

• Quality slipping
• Late deliveries becoming common
• Staff turnover increasing
• Margins shrinking

Grow deliberately. One perfect event builds your reputation. Five mediocre events destroy it.

The catering businesses that thrive long-term maintain their standards as they scale, track their numbers religiously, and build systems before they desperately need them.

How to Start a Catering Business with Homebase

Now that you know how to start a catering business, here's how to manage it profitably.

The difference between catering businesses that thrive and those that struggle: labor management. When you know exactly who's working, where, and what each event costs in labor, you protect your margins.

Homebase solves that by giving you scheduling templates for each event type, mobile clock-in from any location, automated overtime alerts, and real-time labor cost monitoring per event.

"Before Homebase, we were printing out timesheets and manually calculating hours. To keep up with the times, we have switched to Homebase, and it has made our lives so much more efficient!" — Ashley Ortiz, Owner, Antique Taco

Built for small businesses like yours, managing teams with irregular schedules and tight margins. Join the 100,000+ small businesses using Homebase with our free trial.

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Frequently Asked Questions

How much does it cost to start a catering business?

It costs about $2,000-$10,000 to start a home-based catering business. 

This covers licenses ($50-$500), insurance ($500-$1,000/year), basic equipment ($1,000-$3,000), and initial inventory ($500). 

Commercial operations require $10,000-$25,000+ for kitchen access and expanded equipment. Labor becomes your biggest ongoing expense at 20-35% of revenue.

Can I start a catering business from home?

Yes, in most states. Check your state's cottage food laws and home kitchen regulations with your local health department. 

You'll need proper licenses, insurance, and compliance with health codes. Home-based catering works best for drop-off catering and events under 50 people.

What licenses do I need to start a catering business?

Food handler certification, business license, food vendor license, and health permits. Requirements vary by state and city. Budget 4-6 weeks for approvals. You'll also need an EIN from the IRS and general liability insurance ($500-$1,000/year minimum).

How do I price catering services?

To price catering services, use this formula: 

(Ingredient cost × 3) + (Staff labor hours × hourly rate) + delivery = Price. 

This covers food, labor, overhead, and maintains 7-15% profit margins. Adjust for service level—drop-off delivery (20-30% margin), buffet with setup (30-40% margin), or full-service plated (40-50% margin needed). 

Account for ALL labor hours including prep, travel, setup, service, and cleanup.

How do I find reliable catering staff?

You can find reliable catering staff by hiring part-time workers from culinary schools (need experience), restaurants looking for flexible side income, or parents with daytime availability. 

Post jobs on Indeed, local Facebook groups, and culinary school job boards. Pay $15-$25/hour depending on role. Use scheduling tools to track availability and manage irregular event-based hours effectively.

What makes a catering business successful?

Consistent execution, reliable staffing, accurate pricing, and controlled labor costs are what determine your catering business’ success. Track metrics per event: aim for 20-35% labor costs, 28-32% food costs, and 7-15% profit margins.

Build relationships for repeat business—corporate clients providing weekly lunch orders create stable revenue. Focus on quality over quantity: one perfect event builds your reputation faster than five mediocre ones. Scale deliberately as demand proves itself.