If you have coworkers who clamor to be invited to your dinner parties or friends who beg you to bake a cake for their kids’ birthdays, then becoming a work at home caterer may be ideal for you. There are some things you should consider, however, including start-up costs, regulations and marketing. Here are some steps that describe how to get started.
1. Obtain an operating license.
Most states require that you purchase an annual food service licence in order to deliver and sell food items to third parties. Food service license fees will vary depending on your state; licenses are obtained from your state health authority.
Some states, such as Minnesota, require that a caterer employ a full-time certified food manager (CFM) who is trained in food safety and safe food handling practices. Luckily, the caterer can train to become the CFM.
2. Rent space in a commercial kitchen.
You cannot prepare your food items in your own home kitchen; doing so will leads to the state fining and eventually shutting down your catering business. Instead, you will need to locate and use a commercial kitchen that has been inspected by your state health and safety authority. Such a kitchen may eventually be set up in your own home; however, a cheaper option is to initially rent space in an already existing commercial kitchen. Space is typically rented by the shift or hour.
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If you live in a small town or rural area, you may not be in close proximity to a commercial kitchen. In such cases, ask if some area restaurants or churches would be willing to rent their facilities to you.
3. Look into your local zoning laws.
Whether or not you can operate a work at home catering business and eventually set up a commercial kitchen in your home will depend on your city’s or town’s zoning laws.
In brief, zoning laws establish which areas of a city or town are residential and which are commercial. The typical concerns with introducing a commercial activity, such as catering, into a residential area include increased traffic, noise, signage and parking issues. However, because in most cases home-based catering really occurs elsewhere (i.e., the client’s workplace), most cities and townships make exceptions for this type of business.
Even if you find out that your home-based catering business is allowed by local zoning ordinance, make sure that your area homeowners’ association has no issue with your work at home business. In some situations, homeowners’ associations do not allow any commercial activity within a residential home, including such non-intrusive activities such as freelance writing or photography.
If you are part of a residential community where all commercial activity is banned, you are better off knowing this information now versus spending thousands of dollars on equipment and licenses that you will not be able to use later.
4. Start promoting your catering business.
Once you have satisfied local laws and ordinances, it’s time to consider promotion. There are many restaurants and grocery stores that offer catering, so what makes you unique and better? You might think about featuring foods and services not offered by other businesses; for example, you may wish to focus on serving locally sourced and farmers’ market foods in your dishes. Alternately, you may wish to offer a beer or liquor-focused menu with every dish infused or marinated with a given beer or other alcoholic beverage.
Be sure to create a website, as well as a mobile website that can be accessed by smartphones and other wireless devices. Use this online space to post tantalizing photos of your dishes, promotions and announcements. Definitely set up an opt-in area so your subscribers (i.e., potential customers) can receive regular updates of your business activities.
Finally, don’t forget to reach out to your local community and promoting your catering business “from within.” Your local Chamber of Commerce can be very useful in lining you up with potential businesses that might require your services. Consider being listed as a fellow CoC member.
5. File for an LLC.
As your catering business grows, you’ll need to hire employees and/or independent contractors. Having extra “bodies” can quickly lead to work and other disputes. Likewise, there is always the possibility of encountering a disgruntled customer due to a missed order, being late to arrive, etc. You don’t want to lose your personal assets over a business issue, so be sure to at least incorporate your business as an LLC.
6. Purchase business insurance.
As a caterer, you need to protect yourself and your business from potential lawsuits that could arise in the course of doing business. General liability insurance is a must in cases where you are sued for injury or other wrongdoing. For example, if you or one of your employees damages some expensive personal property belonging to a client while catering an event, your general liability insurance will protect you from financial expenses incurred from a lawsuit.
If you serve alcohol, you should also consider purchasing liquor liability insurance, which provides financial protection for you in case a customer or guest is injured as a result of being intoxicated.
As your catering business expands and takes on additional employees, you will need to obtain insurances like workers compensation, unemployment and disability insurance.
7. (Optional) Build your own commercial kitchen.
Once your business is big enough, you might consider expanding your home area to include your own commercial kitchen. By law, a commercial kitchen must be separated from the rest of the home, such as by walls and a door. Commercial kitchens also need to have their own separate emergency exit and ventilation system. Commercial kitchen appliances should be commercial grade, allowing for circuit breakers and other safety features in case of a power surge or fire.
Once you’ve built and equipped your own commercial kitchen, you will need to ask your state or city health department perform an inspection.
Is a work at home catering business right for you?
If you like to create different foods and have an entrepreneurial spirit, catering may be a great at home business for you to start. Be sure to keep your start-up costs as low as possible, at least until you have a stream of steady customers and work; it’s easy to overspend on cooking equipment and food. Also, most caterers who are just starting out make too much food that ends up being thrown away.
Finally, don’t be afraid to ask for help and advice from others; many cities and towns have business mentorship programs and centers operated by former or retired business folks, including caterers. The Small Business Association lists many of these programs ad centers on its website.