How to Start a Catering Business: Step-by-Step

Selling food as part of a catering service can turn into a profitable business entity and a business model that can bring home substantial revenue. 

In the UK, the catering industry is valued at £1.6 billion in 2024. At the same time, forecasts suggest that the number of catering businesses will continue increasing, making this business structure even more attractive in the future.

If you’re planning to start offering catering services and hope to turn this venture into a successful business, you’ll need a bullet-proof strategy.

In the following sections, we offer a step-by-step guide on how to start a catering business. From choosing your business name to reaching potential customers via a catering van or a home-based catering business, we share everything you need to know. 

Niche Identification

Starting your own business, regardless of whether it’s related to a catering operation or another industry, always starts with choosing a specific niche. Selecting a niche can help you gain a competitive edge over other catering companies and can make it easier to reach potential customers. 

In the home catering business, there are several core niches you can explore. As a small business, it can be extremely difficult to cover all niches. This is because you’re likely to be limited in personal assets in your catering company. 

However, as your food business gains popularity and you grow (both in terms of customers but also employees and other assets) you can afford to cater to multiple niches all at once.

Based on your available resources and areas of expertise, you can select from some of the following niches:

• Preparing food for business events;
• Serving cold food for birthday parties;
• Targeting corporate events with corporate catering;
• Offering delicious food at picnics;
• Catering for festivals and sports events in your local area, and others.

Keep in mind that these can be split into two main categories – private and corporate.

Of course, each and every one of these niches is broad and consists of smaller, more narrow market segments. For instance, if you’re interested in wedding catering, you can specialise in wedding cakes or you can completely focus on providing wedding snacks and quick bites. 

The right decision will be based on your market research. Which segments are most and least competitive? Which ones are easiest to tap into, and what types of food safety qualifications will you need? Most importantly, which types of catering services have the highest demand?

Answering these questions will help you choose the right and most profitable path, ensuring that your business grows over time.

Once you’ve selected your niche, you can also think about the catering service styles you’ll be targeting. For example, large, sit-down events can have buffet-style catering, a wave service, a drop-off, or a full service. 

Each one of these styles comes with its own peculiarities and characteristics. For example, buffets are extremely demanding as they feature a variety of hot and cold foods that need to be maintained on the spot, while a drop-off means that the food is pre-cooked and simply dropped off at the location. 

Business Planning

Before you can turn your catering business dreams into reality, you’ll need a reliable business plan. The planning process can vary from individual to individual. However, there are some fundamental components to take into account.

First, it’s key to conduct market research. Gather data on your local market and try to understand consumer preferences when it comes to catering. What are people interested in? How much are they spending on catering? Do they prefer to work with specific types of catering companies over others and why?

There are plenty of different approaches you can use to collect this information. You can rely on free tools like Google and other search engines to discover publicly available statistics, research documents, and insights. In addition, you can utilise paid keyword research tools to figure out what people in your area are searching for most in relation to catering.

This can help you get to know your potential customers better and best of all – understand how to communicate with them effectively in order to secure sales. 

During your business planning phase, you can brainstorm ideas for a business name and business structure, identify your competitors, target audience, potential products to offer, pricing, marketing, and more. 

When selecting your business name, make sure that it hasn’t been taken by another company.

Legal Compliance

Once you’ve laid out the basics of your catering company as part of the planning stage, it’s time to consider legal compliance.

Running a successful catering business is more about your food menu and marketing. It’s also about registering as a limited company or sole trader, complying with food safety laws, having a proper business licence, and more. 

If you plan to operate a solo operation, you’ll need to register a sole proprietorship. On the other hand, if you plan to hire employees, you’ll have to register a limited company. 

Next, check with your local authority and local health department about the food and safety laws that you’ll need to abide by. You can request that an expert from your local council visit your catering premises for an inspection, consulting you on the improvements and upgrades that need to be made. 

In most cases, the main areas of concern will be food hygiene, ability to clean all the equipment in your kitchen, safety, and others. 

Keep in mind that catering businesses in the UK should become familiar with the General Food Law requirements that they’ll need to comply with as professional caterers. You can find out more about these by reading more about the Food Standards Agency guidelines.

Equipment

Let’s not forget that starting a catering business requires buying equipment and investing in your commercial kitchen. Of course, the necessary equipment in your kitchen will vary depending on the type of food you plan to prepare and serve. 

Usually, the must-have assets include refrigerators and freezers for food storage, cooking tools and instruments, and food preparation equipment. 

Some of the equipment and assets you’ll need include:

• Ovens;
• Hobs;
• Fryers;
• Grills;
• Baking ovens;
• Stainless steel prep tables;
• Garbage bins;
• Blenders and juicers, and others.  

You’ll probably also need a sink and a washing machine, depending on how busy you plan to get. 

Although you might be tempted to go all-in and invest a lot of financial resources into expensive catering equipment and furnish your kitchen from A to Z, don’t make any rash decisions.

Carefully plan your budget and purchase the equipment that you’ll need to get your business up and running. At the same time, don’t try to cut costs by buying cheap and low-quality assets as this can turn out to be costly in the long term. 

As your catering business grows and evolves, chances are that you’ll need to make additional investments in equipment.

Location Setup

After you’ve acquired your catering kitchen equipment, you’re ready to set up the initial outlay of your premises. 

Keep in mind that the equipment and machinery you’ll be working with are more advanced compared to that of the standard home kitchen. This means that you’ll need to carefully plan each asset’s allocation in order to ensure that you can achieve maximum efficiency in your cooking space.

Before making any physical changes to your food preparation zone, make sure that you’ve created a detailed plan of where everything needs to go. Organise your storage area in a way that guarantees ingredients, supplies, and equipment are adequately arranged and properly stored.

Menu Creation

Next, it’s time to consider your catering business’ menu. What will you be offering to your customers? This is a fundamental part of preparing your business in a way that will grab the attention of potential customers, generating revenue. 

When it comes to menu creation, the first and most vital part is identifying your target audience and its preferences. You should already have this information available as part of your business planning and market research step. Also, make sure that you’ve researched your competitors, gaining insights into the type of products they offer as part of their catering.

Where possible, choose a theme or cuisine that reflects your business identity and appeals to your target audience. For example, this could be organic food, ethnic food, gourmet dishes, vegan-inspired treats, or others. 

It’s highly advisable to have a balanced menu, featuring appetisers, main courses, side dishes, and desserts. This will allow you to be perceived as the go-to catering solution for any occasion, eliminating the need to hire other businesses that you’ll have to split earnings with. 

Last but not least, make sure you properly define portion sizes based on the event types you’ll be catering for. For example, a corporate meeting might require lighter fare, while weddings will probably demand more substantial meals.

When crafting your menu, don’t forget to provide as much information as possible on the types of ingredients you use, preparation methods, and others. Also, visual appeal sells best, so make sure that you have professional photos of your dishes. 

Pricing

The main mission of any catering business is to offer great prices to their customers, guaranteeing bookings. However, in order to achieve this, it’s key to have a clear understanding of your food costs, labour costs, and any other overhead costs that you might accumulate as part of the catering process.

Make sure that you’re not underselling your services just to please the crowd. This is especially important for small businesses that heavily rely on a stable cash flow in order to survive. Once you gain more experience and you stabilise your finances, you can afford to offer more significant discounts that won’t affect your business in the short or long term. 

When setting prices, don’t forget to analyse what others in your niche are doing. You don’t want to undersell or oversell as this can put you in a disadvantageous position compared to others. 

Marketing

No matter whether you’re striving to win new customers or secure repeat business, the best way to do so is through proven marketing techniques.

Running your own catering business inevitably means investing time, effort, and resources into promoting your business and your services. 

There are several ways to do so. 

Online Marketing 

In today’s highly connected and digital landscape, businesses are actively targeting consumers online. The catering industry is no exception.

As a catering business owner, you can take advantage of some or all of the following online marketing strategies:

• Build and promote a website – creating a professional website for your business doesn’t have to cost a fortune. You can rely on affordable website builders to set up a simple and visually appealing website that describes your business and your offerings. All you have to do is purchase a domain name and a hosting service. Make sure that your website is easy to navigate, mobile-friendly, and well-designed.
• Social media presence – take advantage of popular social media channels, like Instagram, TikTok, X, and Facebook to spread the word about your catering business. Introduce your employees, talk about your dishes, create video content about the type of events you cater for, and more. This can help you reach a wider audience and quickly build a community of potential clients.
• Participate in forums and groups – join online forums and social media groups that are related to event planning and catering. This can help you find out more about the preferences of your audience but also share information about your business, your services, and why you stand out from the rest.

Online marketing can be a low-cost way to appeal to your local audience and gain interest from potential clients. However, if you plan to rely on more advanced and sophisticated marketing strategies, you may also need to prepare for a more substantial investment. 

Offline Marketing 

While online marketing can work wonders, there are also plenty of offline channels to explore. 

For example, you can attend industry events like trade shows, food festivals, and wedding fairs where you can network with others who are indirectly part of the industry. You can use this opportunity to promote your services and network with potential clients. 

Another intelligent way to popularise your catering business is to partner with local businesses. For example, establish partnerships with local event planners, venues, DJs, florists, and photographers. This can help you get referrals, enabling people to easily find you. 

Staffing

Another essential part to concentrate on when starting your catering business is hiring the right catering staff. 

The people that represent your business can make or break your image. This is why it’s vital that you work with inspired, motivated, and dedicated individuals who can help you build your brand from the ground up. 

Throughout your hiring process, make sure that you are fully aware of the number of employees you need and clearly define their roles and responsibilities. Decide on the qualifications and experience they’ll need to be considered a good fit for the role. For instance, you may assess them based on their certifications, catering experience, or other skills.

After you’ve outlined all the details about the positions, use recruitment channels and social media platforms to notify your area about the opportunity. Post job openings on job boards, like Glassdoor, Indeed, and others. It might also be helpful to take advantage of industry-specific sites and local community boards. 

If you’ve identified a potential person for the role, don’t forget to check references, conduct thorough interviews, and even perform skill assessment where necessary. 

Tech Integration

Starting a catering business in a crowded market is a challenge that usually demands an innovative approach and precise execution. In such a competitive environment, tech integrations can certainly make a difference.

For example, consider investing in automated ordering systems that can help simplify the ordering process. This can make booking your company for an event easier for you and the client. In addition, it can eliminate the need to hire employees to handle this specific part of the business, leading to opportunities to save money. 

As you grow, you might also find inventory management software a must. Such a solution can help you keep costs down and guarantee that you have all the necessary ingredients available. Via such software, you can track stock levels, expiration dates, and even make forecasts about reordering. 

Moreover, you can utilise an online menu and ordering systems to make orders more convenient for clients. 

Networking

When discussing marketing, we mentioned the importance of networking for starting and growing your catering business. Networking is extremely powerful for several reasons.

First, it enables you to communicate with other businesses that are part of the wider niche you’ve positioned yourself in. This can help you learn more about the market, identify gaps, and source new opportunities.

Second, networking can expose you to the ability to form valuable partnerships that can lead to mutual gains for you and other local businesses. For instance, imagine being recommended by one of the most renowned photographers in your area for an upcoming celebrity wedding. This once-in-a-lifetime opportunity can open the doors to new and exciting potential for your catering business. 

Third, forming such partnerships can quickly build trust among your target audience. After all, you can leverage the authority of your partners to make a name for yourself. Of course, in order to achieve this, you’ll also need to back up recommendations with outstanding quality and attention to detail. 

Financial Management

Last but not least, when it comes to how to start a catering business, there are certain financial implications worth having in mind. 

For starters, it’s key to estimate your startup costs. For example, the final upfront cost includes kitchen appliances, catering utensils, catering vans, licensing and permits, rental costs, marketing and branding, insurance, and more.

You’ll also need to factor in operating costs. These feature the expenses that you use to pay people, and the costs incurred for things like raw ingredients, beverages, supplies, serving equipment, and others. 

Don’t forget that you’ll also be accumulating business tax that you need to be prepared for. Proper tax planning is crucial for financial management. To make sure you’re properly prepared, register for the necessary tax identification numbers and for VAT if applicable. 

Ensure that you always keep detailed records of all tax transactions and expenses in order to prevent legal disputes and be able to plan your payments accordingly. 

Payments

In addition to managing costs and taxes, it’s essential to establish a reliable system for accepting payments. Offering a variety of payment methods can make transactions smoother and more convenient for your customers. 

Consider accepting credit and debit cards through a mobile point-of-sale (POS) system, which allows you to process payments on the go. 

For corporate clients, consider providing options for direct bank transfers or checks. Offering flexible payment options can work well for customer satisfaction and improve cash flow management for your catering business.

Conclusion 

By implementing these steps on how to start a catering business, you can turn your catering dreams into reality and unlock the potential of this lucrative market. 

With forecasts revealing that this market is expected to continue growing in the future, entering the niche makes sense for entrepreneurs and business enthusiasts with a flair for cooking.

Frequently Asked Questions

Is starting a catering business expensive?

No, starting a catering business is not considered extremely expensive, especially when compared to other business ventures. However, the initial investments you’ll need to make depend on the size and scope of your business.

What licences and permits do I need to start a catering business?

Necessary licences and permits for a catering business vary by location but generally include a business licence, food handler’s permit, and health department permits. Chances are that you’ll also need a food service establishment licence if operating from a commercial kitchen. Make sure to ask your local health department and business regulatory agencies about the licences and permits you’ll need.

What makes a catering business successful?

Successful caterers usually have outstanding organisational skills, a strong understanding of food safety, and the ability to manage multiple tasks simultaneously. It’s also helpful to have a creative and appealing menu and presentation, combined with attractive prices that are neither too high nor too low.