How to Start a Catering Business from Home: 7 Essentials

Starting a catering business doesn’t require a commercial kitchen and a large staff. With diligent research and a good strategy, you can launch and offer catering services from home.

A home-based catering business is a budget-friendly and comfortable way to start your company. You can build a solid foundation of clients and business structure then grow from there. 

This article outlines the essentials of starting a home-based catering business. We’ll list the legal requirements, tips for success, and how to start a catering business from home.

Understanding the 5 Basics of Home-Based Catering 

When getting started with your at-home catering business plan, you’ll need some basic supplies. These are the five key components of home-based catering: 

1. A fully stocked kitchen: Ensure you always have the ingredients for your menu items on hand. Know when you’re running low and should reorder.  
2. A means to transport food: Catering events means delivering food to a location. Have means to ensure the food stays at the right temperature during transportation. 
3. Food preparation and packaging supplies: Portioned containers, either reusable or disposable, and food packaging supplies are crucial.  
4. Diverse sample menus: You have a core menu with variations that are available based on client dietary requests or restrictions. Additionally, you can accommodate buffet-style catering and plated meals.  
5. Marketing techniques: It’s important to have reliable catering marketing ideas with which to promote your new catering business.  

In addition to the physical supplies and marketing strategies, ensure you know the legal and regulatory requirements of running a catering business from home. You’ll need to account for both general business and catering industry regulations.  

1. Necessary Legal Requirements and Certifications

It can be helpful to review your local health department regulations to ensure you have the necessary documentation. Use this list of seven legal requirements to get started:

1. General business license: Every business in the United States is required to have a general business license. Obtain yours from your relevant city or county.  
2. Employer Identification Number (EIN): An EIN is your business’ tax ID number issued by the Internal Revenue Service (IRS). EINs are free to get and don’t take more than a few minutes to file for. 
3. Home occupation permit: You must obtain this permit when operating a business from home. Rules may vary depending on your city or county.  
4. Caterer permit: A caterer permit ensures that your place of business meets local and state regulations for catering food preparation.  
5. Building health permit: You must obtain a building health permit for your home to demonstrate compliance with local health and safety standards.  
6. Food service license: Issued by the local health department, this license allows you to serve food to customers. It’s a requirement for all restaurants.  
7. Food handlers permit: This permit allows you to legally work in the food business and show you’re compliant with food handling regulations. 

You can obtain most catering business permits through your local health department. Bear in mind that precise requirements may vary depending on your location. 

Additionally, if you plan to serve alcohol as part of your services, make sure you get a caterer permit that includes a catering liquor license. 

Here’s a tip: While it’s not a required permit, you should purchase catering liability insurance. It protects you, your staff, and your operations from any potential liability. 

2. Setting Up Your Catering Workspace 

When prepping your kitchen for catering, take these three steps to do so effectively: 

1. Adequate food preparation space: You’ll need a kitchen spacious enough to handle large-scale food preparation. The space necessary depends on your business’s scope and style. 
2. Acquire necessary equipment: Reusable or disposable chafing dishes, serving utensils, and insulated food pan carriers are crucial supplies for properly storing, transporting, and serving catered meals. 
3. Proper fridge and freezer storage: You’ll likely need more space than your average fridge and freezer to store goods. Consider purchasing secondary appliances for your business. 

A successful catering workspace has a dedicated space to store and prepare food that adheres to local health codes. Your home kitchen works—just ensure it maintains health codes even when used for non-catering cooking.  

3. Crafting Your Catering Menu 

Once you’ve handled the logistics to establish your business, it’s time to construct your catering menu. Use these five tips to craft a delicious menu that your customers love: 

1. Know your catering niche: Your menu options should reflect whether you cater weddings, corporate events, social parties, or concessions. 
2. Understand your costs: Consider how specialty menu items and out-of-season ingredients impact your costs compared to standard menu items.  
3. Establish a range of menu items: Build variations of your most popular menu items to allow clients some amount of customization when placing orders.  
4. Consider dietary restrictions: Know how you’ll manage orders for clients with allergies or other dietary restrictions.  
5. Use seasonal ingredients: Whenever possible, create a menu that uses fresh seasonal ingredients to instill a sense of variety and save on ingredients. 

Ideally, your catering menu is as accessible to customers as possible. You offer a range of appetizers and entrees that work for all kinds of budgets. Yet, you’re also balancing this customer service with your business expenses and access to ingredients.

4. Sourcing Ingredients and Kitchen/Catering Equipment 

To best meet client demands and deliver decadent food, you’ll need to ensure access to great ingredients. These are three strategies for sourcing high-quality ingredients: 

1. Look for locally grown produce. By purchasing produce near you, you support local farms and save money through reduced transportation costs.
2. Create seasonal menus: You can keep your menus fresh and exciting by offering seasonal dishes.
3. Grow your ingredients: If possible, you can grow your produce in a community garden or at home.

Additionally, it’s necessary to have reliable catering equipment and cooking supplies. Here are three strategies to find affordable and trustworthy supplies: 

1. Purchase in bulk: Supplies purchased in bulk tend to be cheaper per item and last longer than if you purchase supplies as needed.
2. Find used equipment: High-quality, pre-owned catering equipment may save you money when compared to buying new equipment.
3. Use your own supplies: Depending on the scale of your catering services, you may be able to use your own kitchen equipment when cooking. 

Whether you’re purchasing cooking supplies or menu ingredients, it’s essential to establish good relationships with suppliers. If a supplier knows you as a repeat customer, you might be able to negotiate for better prices.

5. Pricing Your Catering Services 

When setting prices for your catering services, you have expenses, quality, and profitability top of mind. Additionally, you want to stay competitive. Here are three tips to guide how you price your catering services: 

1. Cost of ingredients and supplies: This expense includes everything from menu item ingredients to serving utensils—anything you need to run the business.
2. Prices of labor and transportation: You can charge an hourly rate for each employee, including yourself, as well as a transportation fee. 
3. Set-up and take-down fee: Either charge your hourly rate or implement a separate fee that covers this as an additional service. 

The precise structure of catering business prices looks different for everyone. But here is an example of how you may determine your pricing: 

Total expenses (ingredients, equipment, serving supplies, etc.) + 5-10% + your hourly rate + gratuity = total invoiced sum 

The additional percentage covers any markups on supplies, sourcing harder-to-find ingredients, or paying off business debts from starting your catering company. You may also consider adding gratuity to your invoice. 

Here’s a tip: Research the prices of other caterers in your area. Averages here can help you get a sense of how to price your services to stay competitive. 

6. Marketing Your Home-Based Catering Business

After you have these components determined, you need to get the word out about your business. Use these seven marketing strategies that are specifically tailored for a home-based catering business: 

1. Optimized website: If your catering website has strong search engine optimization (SEO), it’s more likely to appear when potential customers search for caterers in their area.  
2. Strong social media presence: Engage with customers, market your services, and promote new menu items or offerings on social media.  
3. Collaborate with other businesses: Partner with other businesses to host events or cross-marketing campaigns that increase business for both.  
4. Email marketing: Personalized email marketing allows you to stay in touch with your customers, letting them know about special discounts or updates. 
5. Attend local events: You can make your presence known in your community by attending and catering to local events.  
6. Create a customer referral program: Offer exclusive deals or discounts for customers who refer new clients to bolster word-of-mouth marketing. 

As a small, home-based catering company, your relationships are crucial. You most likely don’t have a robust team dedicated to wide-scale marketing initiatives, so it’s important to be intentional about your catering marketing strategies. 

7. Managing Orders and Customer Relationships 

Back-of-house operations, like order management, are crucial for catering business success. These are the four core components of managing catering orders that you should have in mind: 

1. Inventory management: Know the item quantities you need and have in stock to estimate when you’ll need to acquire more based on current client orders.
2. Order processing: Because you do all the cooking, it’s crucial to have a streamlined approach to accepting orders, preparing them, and making sure they make it to the event on time. 
3. Online ordering: Allow customers to place and pay for orders online to make it simple for clients to purchase your services. Our 2024 Online Ordering Guide has all the information you need to get started.
4. Customer communication: Consistent communication with clients increases trust and ensures that you accurately meet their event needs. 

The better you manage orders, the stronger your customer relationships. Follow these four tips to establish and maintain positive customer relationships: 

1. Aggregate customer data: Collecting all your customer data informs trends, purchasing habits, and behavior to guide business decisions that matter most. 
2. Personalized email marketing: Send customized emails to clients based on their buying habits, industry, and loyalty to your business. If you have a loyalty program, create loyalty-driven emails to accelerate your lifecycle marketing ROI.
3. Implement customer feedback: Collect and implement customer feedback to ensure you meet their needs and that clients feel their voices are heard. 
4. Create a loyalty program: A loyalty program rewards clients who purchase your services again and again. 

Customer relationship management (CRM) software handles everything from customer data to inventory tracking. It allows you to automate tasks. For a home-based catering service, it may also be helpful to input a menu into the CRM and then receive a list of necessary ingredients to avoid over-purchasing. 

5 Insights for Planning Growth and Expansion 

During the planning phase of your catering business, brainstorm your long-term goals. Use these five benchmarks as signs it’s time to expand your catering services: 

1. Strong reputation in the industry: Current and former clients often recommend your services to their network. You have a reputation for providing delicious food and high-quality, reliable service. 
2. Financial stability: You have enough working capital on hand to fund additional initiatives. Take smaller risks when trying something new and always make sure your methods for accepting catering payments are flexible.
3. A steady flow of customers: You book out several months in advance on a regular basis for events or have a waitlist. Your services are in increasingly high demand, so you may be in need of a commercial kitchen space.
4. Repeat clients: The same customers return to your catering business because they recognize the quality of your food and service. 
5. Solid marketing strategy: You’ve implemented one or more marketing strategies that successfully generate interest from new leads on a regular basis, regardless of your budget and external economic conditions.

Once you’ve decided it’s time to expand from your home-based catering business, here are four ideas for how you could get started: 

1. Explore a new niche: If you currently focus on catering to one industry, consider branching out to explore another niche.
2. Expand menu options: Experiment with unique menu items and offer a wider array of cuisines.
3. Hire more staff: Build a team of caterers that allows you to serve more clients and cater more events.
4. Move to a larger space: Consider moving your catering business to a commercial kitchen rental as serving more clients requires increased food preparation.

Reaching a point in your catering business where you’re ready to expand is a huge accomplishment. A company that started as a simple idea has grown into a high-demand, successful catering business that your clients rave about. 

Frequently Asked Questions About Starting a Catering Business from Home  

How much money do I need to start a catering business? 

You need to account for permits, inventory, supplies, and marketing services. On average, the startup cost for a home-based catering company ranges from $10,000 to $50,000. Some young catering companies will take out a small business loan to cover early expenses. 

How profitable is a home catering business? 

It’s possible to gain a fair profit by starting a home-based catering service, but your exact profit margins are entirely dependent on your expenses. It’s crucial to have thorough accounting strategies that document every dollar spent and earned. 

What are the four types of catering? 

The four types of catering are corporate, social, wedding, and concession. Based on recent market research, roughly 63% of US-based caterers report serving social/consumer events, 48% report serving corporate events, and 28-31% report serving weddings.

What should the food cost be for a catering company?  

Catering food costs depend on the menu, seasonal ingredients, dietary restrictions, and level of event formality. Take these costs into consideration when building your menus. 

Is there good money in catering? 

Running a home-based catering company can yield a steady income. Keep in mind your total profitability hinges on the amount you spend on ingredients and supplies, your fees, and your baseline hourly rate. 

What do caterers use to transport food? 

Many catering businesses use insulated carriers, beverage dispensers, food pans, and takeout containers. They also likely transport the food in a temperature-controlled vehicle. 

The Bottom Line 

A home-based catering business is a great way to break into the industry. You may start part-time and then transition to full-time as your business grows, or you can jump right in. Regardless of your approach, managing the company from your home is convenient and has the potential to save on startup costs.

If you’re ready to launch your catering business from home, schedule a demo to learn more about how our platform can support your company’s goals.