To start a catering business, choose a niche, write a simple plan, register your business, get the required food-safety licences and insurance, set up a licensed kitchen, price your menu using true costs, and then find your first customers through local networking and online listings. Rules vary by location, so check with your local health authority first.
Key takeaways
- Pick a niche first. It makes your menu, pricing, and marketing much easier.
- Licences, food-safety training, and insurance are not optional, and rules vary by location.
- Price using full costs: food, labour, overheads, and delivery. Divide food cost by your target percentage to find a menu price.
- Start small, use a licensed shared kitchen if needed, and build systems before you scale.
In this guide
- Step 1: Choose Your Catering Niche
- Step 2: Research Your Market and Competitors
- Step 3: Write a Simple Business Plan
- Step 4: Register Your Business
- Step 5: Get Licences, Permits, and Food Safety Training
- Step 6: Arrange Insurance
- Step 7: Set Up Your Kitchen and Equipment
- Step 8: Build Your Menu and Price It Properly
- Step 9: Find Reliable Suppliers
- Step 10: Build Your Brand and Find Customers
- Step 11: Hire and Train Staff
- Step 12: Run Your First Events and Improve
- Catering Business Models Compared
- Common Mistakes New Caterers Make
- Frequently Asked Questions
Last updated: October 2026
Catering is one of the most flexible food businesses you can build. You can start from a home-approved or rented commercial kitchen, take on small events first, and grow into weddings, corporate contracts, and large functions. It also has a steady, repeatable demand, because people always host events.
Step 1: Choose Your Catering Niche
Being known for something makes marketing far easier. Common niches include:
- Weddings and private parties
- Corporate lunches and office catering
- Drop-off catering (food delivered, no staff on site)
- Food trucks and street-food catering
- Dietary specialists, such as vegan, halal, kosher, or gluten-free
- Meal prep and small-batch catering
Pick the niche that matches your skills, local demand, and the equipment you can realistically afford.
Step 2: Research Your Market and Competitors
Look at who already caters in your area. Check their menus, prices, reviews, and gaps. Ask yourself what is missing: faster service, better dietary options, or a clearer price list. Talk to potential clients such as office managers, event planners, and venues before spending money.
Step 3: Write a Simple Business Plan
A short plan of one to three pages is enough. Cover your niche, target customers, menu style, pricing, startup costs, expected monthly costs, and how you will find clients. The US Small Business Administration has free templates and guidance. For the general sequence, see our guide on how to start a business.
Step 4: Register Your Business
Choose a business name and legal structure, such as sole proprietorship or LLC (or a limited company in the UK). In the United States, you can apply for an Employer Identification Number (EIN) for free on the IRS website. Open a separate business bank account from day one.
Step 5: Get Licences, Permits, and Food Safety Training
Food businesses are heavily regulated, and rules differ by country, state, and city. Typical requirements include:
- A general business licence
- Registration or a permit with your local health authority
- Food handler or food hygiene certificates, such as ServSafe in the US
- Kitchen inspections
- Vehicle and mobile-unit permits if you cook off-site or operate a food truck
In the UK, you must register a food business with your local authority at least 28 days before trading, as explained on GOV.UK. In the US, most states base their rules on the FDA Food Code. Cottage-food laws often do not cover full catering, so always confirm with your local health department before you cook for customers.
Step 6: Arrange Insurance
- General or public liability: covers injury or property damage at events.
- Product liability: covers illness linked to your food.
- Commercial vehicle cover: if you deliver or transport food.
- Employer’s or workers’ compensation: required once you hire staff in many places.
Step 7: Set Up Your Kitchen and Equipment
Many caterers start in a licensed commissary or shared kitchen to avoid building their own. Whatever option you choose, the basics usually include commercial-grade cooking equipment, refrigeration, hot-holding and cold-holding units, food-safe storage, transport boxes, serving equipment, and a thermometer for checking temperatures. Buy second-hand where it is safe to do so, and rent specialist items for large events.
Step 8: Build Your Menu and Price It Properly
Start with a small menu you can make consistently well. Price each dish by working out its true cost, including ingredients, packaging, labour, and overheads.
A common method is to divide the food cost per portion by your target food-cost percentage. For example, if a dish costs $4.50 per portion to make and you aim for a 30% food cost, the menu price is $4.50 ÷ 0.30 = $15.00 per portion. Many caterers aim for food costs in a range of roughly 28% to 35%, but your target depends on labour, delivery, and service level.
| Cost to include | Examples |
|---|---|
| Food | Ingredients, garnishes, condiments |
| Labour | Prep, cooking, service staff, your own time |
| Overheads | Kitchen rent, utilities, insurance, software |
| Delivery and setup | Fuel, vehicle costs, serving equipment |
| Waste | Spoilage and over-production |
If you are working out wages for staff, our hourly to salary calculator can help you convert hourly pay to annual figures.
Step 9: Find Reliable Suppliers
Compare local wholesalers, farmers’ markets, and restaurant suppliers. Ask about delivery times, minimum orders, and credit terms. Keep two suppliers for key items so one late delivery does not ruin an event.
Step 10: Build Your Brand and Find Customers
- Create a simple website with your menu, photos, service areas, and an enquiry form.
- Set up and verify your Google Business Profile so nearby customers can find you.
- Share clear photos on Instagram and Facebook.
- Network with wedding planners, venues, offices, and event organisers.
- Offer tasting events and ask happy clients for reviews.
Step 11: Hire and Train Staff
Start with part-time help for events. Train people in food hygiene, allergen awareness, and customer service. Clear roles reduce mistakes on busy days.
Step 12: Run Your First Events and Improve
Begin with small jobs for friends, family, and local groups. Keep a checklist for each event, record what sold and what did not, collect feedback, and adjust. Reliable systems are what let a catering business grow without losing quality.
Catering Business Models Compared
| Model | Startup effort | Pros | Cons |
|---|---|---|---|
| Shared or commissary kitchen | Low to medium | Licensed space, no build-out | Rental fees, limited hours |
| Drop-off catering | Low | No on-site staff, simple operations | Less premium pricing |
| Full-service event catering | High | Higher revenue per event | Staffing, equipment, stress |
| Food truck catering | Medium to high | Mobile and visible | Vehicle costs, permits |
Common Mistakes New Caterers Make
- Underpricing. Forgetting labour and overheads eats profit.
- Skipping permits. Fines and shutdowns cost far more than licences.
- Offering too many menu items. A smaller menu cuts waste and errors.
- Ignoring allergens. Always record and communicate allergen information clearly.
- Not planning cash flow. Events are often paid after the service, so keep a buffer. Basic budgeting guidance is in our financial planning guide.
Frequently Asked Questions
It varies widely. Using a shared licensed kitchen and starting with drop-off orders costs far less than buying equipment, a vehicle, or leasing a full kitchen. Build a budget from your own quotes.
Almost always. You typically need a business licence, food-business registration or a health permit, and food-safety training. Requirements differ by country, state, and city.
In some places, yes, with approval, but many areas restrict home kitchens for full catering. Check with your local health department before cooking for customers.
Add up ingredient cost, labour, overheads, and delivery per portion, then divide food cost by your target food-cost percentage to set the menu price.
Through local networking with venues, offices, and planners, a Google Business Profile, social media photos, tasting events, and customer reviews.
Commonly general or public liability, product liability, vehicle cover if you deliver, and employer or workers compensation if you hire staff.
This article is general information, not legal or tax advice. Licensing, insurance, and food-safety rules vary by location, so confirm requirements with your local authorities.
