What will I be doing?

Catering is a popular business with more than 46,000 catering businesses existing in the U.S. What does a caterer do? He or she purchases, prepares, delivers and serves food for special events. If you enjoy preparing food and making others happy, a catering service may be a good home-based business for you.

What will I need to start?

First, you’ll need to check with local and state health departments to deter-
mine what licenses, permits and certifications are required to operate a catering service. If you prepare your own food, your kitchen will probably need to be certified as a commercial kitchen. Some caterers work around this by rent-
ing restaurant kitchens during the mid-morning and mid-afternoon slower periods.

You’ll also need utensils, delivery and service tools as well as a source of food and supplies. If you’re renting a commercial kitchen, some of these requirements will be available.

Who will my customers be?

Customers for your catering service include individuals who want to give parties, companies needing to feed employees for a sales meeting or picnic, as well as groups and associations for meetings or seminars.

One successful caterer began her business as an employee of a popular restaurant. She contracted with the owners to pay them 25 percent of any catering she did if she could use the kitchen during the off-hours. Both profited from the partnership.

How much should I charge?

The hourly rate for catering services is typically $25 to $75, depending on many factors. The greater the caterer’s skills and reputation, the higher the hourly rate. Pricing of catered events is typically per-person. A catered company picnic may be priced at $6 per person while an elaborate formal dinner may be priced at $45 per person. The caterer’s hourly rate is added to the costs of food and preparation to establish the base price.

How much will I make?

Your catering service can be very profitable once you’ve learned how to operate it efficiently. Waste is the greatest enemy of profits in the food service industry. Lower the waste and you will increase profits.

One successful caterer specialized in catering weddings, planning one on each of the days of the weekend. She charged $8 per person with a 50-person minimum. After paying for food, preparation, delivery and service, she earned about $22 an hour for her time. The 14 hours she spent on her business over each weekend netted her about $16,000 a year—after taxes! As word-of-mouth spread and her client list grew, she was able to develop her weekend catering business into a full-time venture.

How can I get started?

To be successful in the catering business, develop your food preparation and cooking skills, learn how to buy and store foods and learn to minimize waste. Read this book: Catering: Start and Run a Money-Making Business by Judy Richards (TAB/McGraw-Hill), currently out of print.

The SIC code for catering services is 5812-12.

How can I use computers to increase profits?

Caterers must track job income and expenses down to the olive. This requires good recordkeeping software. In addition, caterers need to print menus. Inexpensive (under $100) desktop publishing software can be used for this. Or most word processing programs can do a decent menu or flyer with columns.