How to start a Catering Business in UK USA (Business Plan)

Catering Business

Do you have these questions in your mind?

  • How to start a Catering Business?
  • How much does it cost to start a Catering business?
  • How can you make from a Catering Business? 
  • How to find the best location to open your Catering Business?
 

In this article, you will find answers to all your questions. So please grab a cup of coffee, and let’s get started.

Table of Contents

What is the Food Catering Business?

With a global market value of around $240 billion and an annual growth rate (CAGR) of 4.7%, the food catering industry is one of the biggest industries in the world right now.

 

Starting a catering business can be rewarding and exciting if you have a passion for food and an entrepreneurial spirit. 

 

However, like any other business, it requires careful planning, research, and a solid understanding of the industry. From identifying your target market and defining your menu to obtaining the necessary licenses and permits, many steps exist before launching your business

 

By the end of this article, we will teach you everything you need to know when starting your catering business. 

Market Insight: The UK catering service market size is around £4.5 billion and is expected to grow more over the years, while in the US, they have the biggest market size in the world with $15 Billion.

Catering Business

Types of Catering Business Models

You can choose from several types of catering business models when starting your catering business. These include:

 

1. Full-Service Catering: 

This model provides complete catering services, including food preparation, serving, and cleanup. Full-service catering is ideal for significant events like weddings or corporate events.

 

2. Drop-Off Catering: 

In this model, the catering company prepares the food, but the client picks it up and serves it themselves. Drop-off catering is ideal for smaller events, such as parties or meetings.

 

3. Food Truck Catering: 

This model involves a food truck catering to festivals, fairs, and corporate events.

 

4. Corporate Catering: 

This model provides catering services to businesses, typically for corporate events such as meetings, conferences, and seminars.

 

5. Wedding Catering: 

This model specializes in wedding catering services, including reception dinners, rehearsal dinners, and bridal showers.

 

6. Social Catering: 

This model provides catering services for social events like birthday parties, anniversaries, and family gatherings.

 

7. Specialty Catering: 

This model specializes in a particular type of cuisine or event, such as ethnic cuisine, vegan or vegetarian catering, or catering for specific dietary needs.

 

Note: Choose a catering business model aligning with your skills, interests, and target market. Offer a combination of catering services meeting the needs of different clients and events.

Catering Business

Pros and Cons of a Catering Business 

Pros of a Catering Business include:

  • Less risk investment
  • Profits margins are moderate
  • Low start-up costs in comparison to opening a restaurant
  • A little skill is enough to start the business
  • Being your own boss.
  • Low operating cost
  • Flexibility to decide your menu
  • Flexibility to pick small and big work according to convenience
  • If you offer a good standard of food and services, the retention rate is high
  • In the beginning, you can even start from home
 
Cons of a Catering Business include:
 
  • Profit margins are not high
  • You don’t have flexibility in timing, due to fixed event timing
  • Every customer has a different taste, few might not be impressed
  • Repairs of equipment could sometimes be expensive
  • Cost of raw materials might vary, sometimes profit can be lower than expected.

Remember, as a startup, your goal should be to keep your costs low and depend on your skills. If you push the process and try to go full-service from the very beginning, there is a good possibility that you’ll be overburdened and may get lost in the process.

Investment required for a Catering Business

Starting your Catering Business is an excellent idea. In the US, you can start this business from $15K -$80K, while in the UK, the figure may vary, and you can start this business with an investment between £5K – £50K, depending on the quality of materials you take.

 

In the beginning, you can manage to do with less staff. It will save the cost of wages. Gradually, once your business grows, you can hire staff accordingly.

 

List of some of the common operating expenses:

 

  • Raw materials
  • Gas
  • Salaries
  • Vehicle
  • Rent
  • Internet
  • Insurance (if any)
  • Electricity
  • Telephone
  • Office Supplies
  • Repairs
  • Licenses (if any)
  • Property taxes
  • Loans if any
  • Advertisement costs
  • Office & Administration
  • Miscellaneous expenses

Busiest time for your business:

The business cycle of a Catering Business is always active. There is a high demand for catering services during festivals, weddings, and birthdays. We can say that the catering business is not seasonal, however, it might sometimes vary due to a few factors.

Catering business

How much will you earn as a Catering business?

It is easier to estimate the earnings of a Catering business with more information about the specific company, such as location, target market, and competition. 

In addition, factors such as overhead costs, sales volume, and pricing will all play a role in determining your earnings.

The average US Catering business revenue is around $50K – $200K annually, while in the UK, it’s about £25K – £75K per year, with a profit margin of about 15% – 25%. 

Market Insight: Compass Group, the world's largest catering company, headquartered in the British town of Chertsey, has reported an excellent 37.5 percent increase in revenue to £28.5 billion (€32.9 billion) for 2022.

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Catering Business

Types of Staff needed for your Catering Business

Here are some types of staff needed for a catering business:

  • Chef/Cooks
  • Event Coordinator/Manager
  • Servers/Waitstaff
  • Bartenders
  • Dishwashers
  • Drivers/Delivery personnel
  • Kitchen assistants/Helpers
  • Cleaners
  • Marketing/Sales personnel
  • Administrative/Office staff.
  • Pastry Chefs/Bakers
  • Menu Planners
  • Sommeliers/Beverage experts
  • Event decorators/Florists
  • Equipment Technicians/Maintenance Staff
  • Accountants/Bookkeepers
  • Human Resource personnel
  • IT/Technical support staff
  • Purchasing/Inventory Management personnel
  • Security personnel (for larger events)
 
Note: Many-a-times, the founder of a startup, because of his/her lack of funds tend to not hire any staff in the beginning, while this may be a cost-effective method at first, eventually we advice you to hire staff that will help you in the fast and smooth working of the company. 

 

Catering Business

Roles and responsibilities as a Catering Supervisor!

As the founder of the company, during the early stages of your business, you may have to take on the role of business supervisor to guide your employees to your vision and goal for the business. 

 

Below is a list of a few roles and responsibilities of a catering supervisor:

 

  • Collect customer’s requirements (number of guests, event date, etc.)
  • Plan food and beverage menu as per client’s demand, discussion with chef also
  • Planning the special requests by the client
  • Scheduling staff shifts according to events on that day.
  • Preparing stock of raw materials and ingredients before the event
  • Transporting meals, beverages, and other items to the venue safely
  • Supervising catering staff, chefs, and helpers
  • Inspecting if everything is cooking as per the menu and served properly
  • Communication with the coordinator or family.
  • Inspect the final arrangements before guests’ arrival
  • Ensuring no dishes or any other item is missing while wrapping up
  • Timely training of staff about customer service and other compliances
  • Ensuring hygiene, health, and safety regulations
  • Analyzing expenses, budget, payroll, etc.

 

Note: As the business grows, you can hire someone to take on this role, as you may have more important things to do!

Catering Business

List of Basic Items needed for your Catering Business

Below is the list of the basic items required for the catering business, few could be optional for you-

 

  • Raw material/ingredients
  • Cooking Oven
  • Serving Equipment
  • Coffee/Beverage Station
  • Cambro
  • Garbage Bins
  • Fryers 
  • Disposable Containers for Storage
  • Refrigerators
  • A modular kitchen setup with multiple burner stoves 
  • Serving tables/chairs
  • Serving equipment/utensils/cutlery
  • Tinfoil papers
  • Storage cabinets
  • Plastic Wrap
  • 2-3 compartment sinks 
  • Transportation vehicle/fuel
  • Apron/gloves/table service essentials
  • Cleaning items
  • First aid kit (optional)
  • Firefighting equipment (optional)
 
Note: As a startup, if you don’t have required funds to acquire all the above mentioned items, THAT’S OKAY! Start with the items you can afford at that moment and just go with it!

A typical day in a Catering business includes:

1. Starting early in the morning
2. Preparing the orders for the day
3. Ordering and storing the ingredients
4. Check supplies
5. Taking orders
6. Sending the orders
7. Cleaning
8. Refrigerating/freezing necessary items for the next day
9. Handling customers’ complaints and feedback
10. Close

Catering Business

Licence and Regulations needed for a Catering Business 

There are different regulatory bodies for the country you want to register in. Always check local laws & permissions related to the licenses and acquire permits & support, or else you may have to pay hefty fines.

 

In the US, check the rules & regulations of the SBA (Small business administration). Below is the list of commonly required licenses & permits for catering businesses in the USA:

 

  • Business license/seller’s permit
  • Employer Identification Number
  • Caterer permit
  • Food handler permit
  • Fire certificates
  • Health department permit
  • Zoning permit

 

In the UK, information through the FSB (Federation of small business) & government’s official website, www.gov.uk, will help you. Below is a quick overview of registering your business in the UK: 

 

  • Register with your local authority
  • An HSE (health & safety executive) will visit you within six months of registration
  • Register with HRMC (HM Revenue and Customs)
  • Get a trading license
  • Take employers liability license
  • Gas/electrical safety certificates
  • Food hygiene certificate
  • HACCP approval (Hazard Analysis Critical Control Point)
  • Public liability insurance
Catering Business

Useful tips for growing your Catering business

When starting your own Catering Business, first of all, there are some things you should keep in mind: 

 

  • To expand, try getting into a contract with an airline whose international flights offer meals to the passengers. The scope and count of this are high.
  • Be clear if you prepare food on-site or cook in a commercial kitchen.
  • Use customized T-shirts with the company’s name and logo, giving them a professional look.
  • You should keep an extra T-shirt in case of stains and spills
  • Always meet clients’ special requests and leaves a good impression.
  • Always make a good menu for what you offer. It will be easy for the client to select and finalize
  • Do a tie-up with a good vendor and suppliers. It will save you from any last-minute hassle.
  • Keep extra staff in case of any emergency.
  • Always hire a good chef. 
  • Pick up orders according to your kitchen space and storage, or else it won’t be easy to manage.

Trends & Challenges in a Catering Business

Trends in a Catering Business

1. Organic food
2. Tacos
3. Vegetable-infused cocktails
4. Korean cuisine
5. Local herbs and spices
6. Classic food

Challenges in a Catering Business

1. Food waste
2. Difficult to offer another segment of vegan food
3. Food and beverage industry have many norms but profits are not very high
4. Rising prices of raw materials

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Catering Business

Shall I go for a Catering franchise?

Buying an existing Catering Franchise of a recognized brand is a good idea; however, it is expensive also.

On the other hand, the franchisor will benefit you will all the existing brand image, customer loyalty, advertising, market research & strategies.

In addition, you will get guidance from the franchisor about training the workforce & ambiance of the premises. 

Some of the top Catering Franchises in the world:

  • On Safari Foods
  • Junzi Kitchen
  • Sirico’s Caterers
  • Herban Feast
  • Brother 2 Brother Catering
  • Ravishing Radish
  • DJ’s California Catering
 

Conclusion

In conclusion, starting a Catering Business can be rewarding and profitable.

 

However, conducting thorough market research, creating a solid business plan, and securing the necessary funding are crucial.

 

In addition, it is essential to find the right location, choose the right equipment and suppliers, and create a unique and inviting atmosphere for customers.

 

Following these steps, you can set your Catering Business up for success and build a business that customers will love for years.

Want to Save Time in your Business Launch?

  • How to Create a Business Plan
  • What is Market Research, USP, Niche & Positioning
  • How to find a suitable name for your business
  • How to create your brand image (Logo + Branding)
  • How to Register Your Business
  • How to Register for Taxes
  • How to get Licenses / Permits
  • How to Open a Business Bank Account
  • How to Get Business Insurance
  • Which Payment Processing Terminal (POS) to buy
  • How to get Funds for your Business
  • How to do Sales & Marketing – Offline & Online
  • Why have a Website / Blog / Social Media
  • How to build & train your Dream Team
  • How to provide Excellent Customer Service
  • Buying an Old Business Vs Franchisee Vs Own Brand from Scratch

Handpicked inspirational Youtube videos for you

Starting a Catering Business: The DJ’s Catering Story | Learn How to Cater | Catering Toolbox  – YT Channel ‘Catering Toolbox’

World’s Largest Airline Kitchen – Emirates Flight Catering – YT Channel ‘Sam Chui’

A. You will need public liability insurance, which covers you in case someone is injured or their property is damaged as a result of your business activities. You may also want to consider product liability insurance if you are serving food that could potentially cause illness.

A. Consider your target market and the type of events you plan to cater, and create a menu that showcases your unique offerings and caters to different dietary restrictions. You may also want to offer customizable menus to allow customers to tailor their orders to their specific needs.

A. Consider the cost of ingredients, equipment, and labor, as well as your overhead costs (such as rent and utilities). You may also want to research the prices of other catering businesses in your area to ensure that your prices are competitive.

A. Basic items required for the catering business, few could be optional for you-

  • Raw material/ingredients
  • Cooking Oven
  • Serving Equipment
  • Coffee/Beverage Station
  • Cambro
  • Garbage Bins
  • Fryers 
  • Disposable Containers for Storage
  • Refrigerators
  • A modular kitchen setup with multiple burner stoves 
  • Serving tables/chairs
  • Serving equipment/utensils/cutlery
  • Tinfoil papers
  • Storage cabinets
  • Plastic Wrap
  • 2-3 compartment sinks 
  • Transportation vehicle/fuel
  • Apron/gloves/table service essentials
  • Cleaning items
  • First aid kit (optional)
  • Firefighting equipment (optional)

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