How to Start a Home Catering Business
Posted on October 7, 2014
On the outside, starting a home catering business seems like the best idea since sliced bread. You’d save money by working in your own comfortable, familiar space and do what you love day in and day out. But before you dive headfirst into your own business, there are many factors you should consider before making the decision to base your catering company from your home. Home-based caterers face difficult obstacles that other caterer’s can easily overcome. Along with limited space, equipment, meeting health codes and regulations, home caterers looking legitimate enough to compete with other caterers who have their own commercial kitchens or store fronts.
In this article you will learn:
- How to scale your business
- Health code basics for home catering
- Tips for dealing with HOAs
- How to get your license
- Tips for creating your commercial kitchen
- Ideas for finding clients
Scaling Your Home Catering Business
Depending on how much capital you start with will determine how big or small you start. Unless you have somehow already developed a great reputation for catering, it’s probably best to start out small. You can always grow a small business into a large one, but if you invest all your capital into a large-scale business that fails, you could lose a large sum of money and have nothing to show for it when all is said and done.
With less than $10,000 you can open a part-time catering operation from your home. Some people have opened this kind of business with as little as $1000 of start-up capital. If you are a home-based catering startup, you need to make a clear budget for yourself. Before you begin getting your licenses and operating your business, you should know exactly how much capital you have and what you need to buy to start up. You should also have a nest-egg of capital available to use for purchasing food and renting supplies as you cater your first dozen events or so.
Meeting Health & Safety Codes for Home-Based Catering
You will have to take some costly measures to ensure that your company is complying with health and safety codes and regulations, or face the penalties. Health regulations differ from city to city, so you will have to contact your local health department to begin. Most local health codes will require the following:
Just because you are taking your food elsewhere doesn’t mean that you can get around the zoning laws. You will need to contact your local zoning office to ensure that you can operate a home catering business from your household. Once you are approved, the city can send a local health authority to examine your proposed business.
Plans for a Separate Kitchen Area
In order for your catering company to receive approval, you will probably have to show the health authorities that all of your commercial operations will take place in a separate commercial kitchen. Usually this kitchen must be separated from your home by a solid wall and a self-closing door. You may also need to provide a second entrance and exit to this kitchen. You cannot prepare family meals in the commercial kitchen or visa versa.
As with any food service establishment, you will require a food service operating license before you can start your home catering business. Usually, the license is obtained from your local health authorities.
Compliance with Fire Codes
Check with your local fire marshal to ensure that your business will meet the necessary fire safety regulations, including proper ventilation and emergency exits.
If you can meet the requirements by obtaining everything listed above, you may be able to operate a catering business from your home. However, you will still probably encounter the difficulty of working with limited space and equipment, operating a commercial kitchen that continues to meet regulations and overcoming the stigma that home-based caterers are not as professional.
Home Owners’ Associations
Ah, the dreaded HOA. Once your plan has received approval from the zoning and health departments, there is another obstacle you probably will face: your Home Owners’ Association (HOA). If you live in an area with an HOA, you may have had to conform with rules about what color your house is painted, where you park your car and the kind of trees you can plant in your front yard. It should be no surprise, then, that they will have a say in whether or not you can cater from home.
Depending on how strict the committee is, when it comes time to convince the HOA to let you operate your catering company from your house, you may want to emphasize any or all of the following:
- You may prepare and cook the food from your home, but your home itself will not become a venue for the events you cater.
- There will be very little increase in traffic to and from your house due to the new catering business you are running.
- You will not put marketing materials in your yard or park your catering vehicle in plain site of the road, where it could become an eye sore for other residents.
- You will comply with all health codes and meet all necessary requirements to operate your business legally.
If your HOA approves your plan and will allow you to operate your business from your home without heavy fees, only then should you begin building your separate commercial kitchen. The last thing you want is to start building your home catering kitchen, then face severe financial losses when you realize your HOA won’t even let you operate there.
Running a home-based catering business actually has several tax advantages. Make sure to keep a clear record of your business expenses separate from your living expenses. This means, for example, that the utility costs of operating your commercial kitchen should be kept separate from your home utility bills. When tax day arrives, you can actually write off these costs as a deduction. You can also write off some of your travel expenses from your home. Just make sure you speak with an accountant to take advantage of the benefits and make sure you are not abusing the write-offs.
Creating Your Commercial Kitchen
Once you have formulated a plan for creating a commercial kitchen in your home that is separate from your living quarters, you can begin building your kitchen. It can be based in a separate part of the main building, or you can house your kitchen in a garage or guest house. Just make sure you have access to electricity, water and gas to make your kitchen fully operational.
The equipment and supplies you need for your kitchen depends on your type of operation. If you will be cooking your food at the venue’s kitchen, you will only need the most basic commercial prep supplies in your home. The same is true if you will be cooking from a mobile kitchen or creating a temporary kitchen at the event sites. You will probably only need the following:
- Commercial refrigeration
- Kitchen work tables
- Commercial dishwashers
- Basic kitchen supplies
- Steam table pans
- Disposable catering supplies
- Food carriers
If you are not using a temporary or mobile kitchen for the events you are catering, you will have to invest in cooking equipment like a fryer, convection oven and range. Everything else you need, including chafing dishes, catering display items and event tents, can be rented. Eventually, if your business is going well, you may want to purchase these items to save money in the long run by reducing your rental costs.
Getting Clients for Your Home-Based Catering Company
Once you have all of your permits and your kitchen is up and running, there is one more serious obstacle that you face: getting clients for your business. Without your own private space where you can hold tastings and put up a big sign, you might have trouble marketing your business as a legitimate catering service.
Step 1: Form a Solid Marketing Strategy
You should start by following all the steps any other caterer would follow to build a foundation for your catering brand.
Step 2: Capitalize on Your Low Profile
You are a home-based caterer. You can either choose to hide this fact, or you can capitalize on it. While at first your homey nature might make your business seem a little less legitimate, keep in mind that many people’s favorite chef is their mother, father or grandparent. Sell yourself as providing “homemade” food “just like mom used to make,” or “good ole’ home cookin’.” Make sure everyone knows you will feed them as well as you would feed your own family. This will give you a certain edge over your competitors, who might come off as cold and sterile in comparison.
Step 3: Provide Tastings
Hopefully, your marketing techniques have created interest, and someone has contacted you for a tasting. Unlike restaurants who delve into catering or large-scale catering operations, you do not have a store front or retail space where you can offer tastings. Instead, you must take the samples to your clients. Over the phone, get a clear picture of which menu items they are interested in. Then bring the sample food to them as if it were an event. Make sure the food arrives hot and delicious, and hopefully you will impress them enough to get a contract.
Once you have gotten a few clients, the hope is that your home catering business will only grow as they spread the word about how great your food and services are. You are now ready to run your catering business like any other catering operation. Despite, or perhaps because of, your home-based nature, you can create a marketable and highly profitable catering company with as little initial capital as possible.