How to Start a Catering Business? Steps, investment & more

. 7 min read
How to Start a Catering Business? Steps, investment & more

A catering business knows no limits, particularly in a country like India that embraces diversity. As a land of joyous celebrations, where every festival has the prerequisite of serving delicious fare to guests, the catering business has immense growth potential.

Be it any social event, celebration event, even a charity event or mourning, it all calls for a wonderful caterer. Therefore, it won't be wrong to say that the role of a caterer in an event cannot be excluded. Probably that's why home catering services are in huge demand nowadays.

So, if you are looking for a detailed guide on how to start a catering business from home or anywhere else, we have it covered in the following points -

1. An ideal catering business plan

The sole purpose of your catering business plan is to decide the niche you want to pursue. The most popular involves home catering services, private chef services, special event caterings.

An ideal catering services business plan is one that contemplates every aspect and sets a framework for future business. This catering services business plan should cover the following aspects:

  • Space and storage requirements
  • Investment costs
  • Expenses for few months
  • Potential customers
  • The menu

Deciding on a menu is an extensive task that needs to be locked in this step of your catering business plan. A menu is made in close consideration with several factors like the price of raw materials, rates of competitors, quantity, costs involved. The feedback from the market must be diligently studied as it helps understand a consumer's real demands.

2. Determine your investment

Investment is a major role player in any business. However, the major advantage a catering business offers is that it does not need a huge investment.

The investment is required for several purposes like rental costs, transport, on-site equipment, licences, and other expenses. Even the smaller costs need to be covered, like napkins, workers, table decorations, etc. An average capital of Rs. 20 lakhs is required to start a small-scale business.

However, if you want to know how to start a catering business from home with no money, these are a few of the ways you can consider:

  • You can approach business investors by adopting a creative and lucrative idea.
  • Different schemes by government departments for small business owners.
  • Loans and financial benefits through agencies and several departments.

Hence, if money is your concern, then you need not worry. This is how to start a catering business from home with no money -

3. Choose an appropriate kitchen place and storage facility.

The next step of your catering business plan is to choose an appropriate area for your kitchen if required and a storage facility for storing all the equipment. A clean and hygienic location will help you attract more customers due to the higher quality standards.

You can even start a catering business from home if you set your kitchen place or storage facility at home. So, location is not a concern if you are worried about how to start a catering business from home. The rent of such an area varies from place to place. Several factors one should consider while choosing a suitable area are rent, prime locality, area.

Empty catering plates, platters and trays setup before event

4. Choose appropriate equipment and suppliers.

After the selection of the appropriate location, you need to choose the equipment you require. The number of equipment you require is based on the items on your menu. Apart from cooking equipment, you also require some storage equipment.

In the case of a start-up, you can buy your raw materials from local distributors. Afterwards, you can shift your orders to a supplier once you move up to a larger scale. The equipment required for your catering business is divided into three categories:

Cooking equipment:

  • Deep fryers
  • Oven
  • Coffee/beverage station
  • Pans and pots
  • Utensils
  • Refrigerators
  • Stoves

Storage Equipment:

  • Multiple-compartment sinks
  • Cabinets
  • Disposable containers

Other Equipment:

  • Tin foils
  • Plastic wraps
  • Garbage bins
  • Serving equipment
  • Stainless steel prep-tables
  • Heated, Non-heated holding areas

5. Get adequate licensing and permitting.

Since food is involved in this business, a lot of licensing procedures come into the picture automatically.

The licenses consider several factors like the safety of location, cleanliness, contamination-free food, hygiene of containers and workers, and personal hygiene. These are a few of the licences that you will require if you want to set up your catering business from home or any other place:

  • FSSAI License

It is the Food Safety and Standards Authority of India. It ensures strict compliance with food safety norms and hygiene maintenance in your catering business.

  • Shop and Establishment License

This is a mandatory licence for starting any commercial establishment or a shop.

  • Liquor Licence

This license is mandatory if you wish to use, sell and market alcohol in your business. It is a legal permit given by the State excise department.

  • Fire NOC

Since fire and electricity are involved extensively in this business, a fire No objection certificate is mandatory for setting up a catering business in India to ensure the safety of your building from any sort of potential fire hazards.

  • GST

The goods and sales tax number is an essential prerequisite for any sort of commercial establishment in the country.

So, if apart from knowing how to start a catering business, you actually want to make it a reality, you need to have a thorough knowledge of these licensing procedures.

6. Hire adequate workforce

The next step of how to start a catering business is to hire the adequate manpower required for the task. The staff must maintain high standards of personal and work hygiene, dedication, and cleanliness as well. These are a few of the person you require for your catering business:

  • Head Chef
  • Junior cooks
  • Delivery persons
  • Transportation men
  • Cleaners
  • Waiters
  • Specialised chefs
two office colleague discussing about Marketing Business Strategy in laptop

7. Market your business

The last step of your catering business plan is to market it to receive a large number of orders. The more the orders in the catering business, the higher your profits will be. An effective marketing strategy is to provide quality service to your existing clients. If your clients spread a positive message about your business, the higher are the chances of more orders. You can also run several offers and campaigns about your catering business.

Also, by effectively using the power of social media, you can easily win the hearts of a large mass audience. An effective marketing strategy is something that will bridge the gap between your business and the consumers.

The catering business is a business that will provide you with not only huge returns of money but also contentment to your soul as there is no greater virtue than serving food.

Also read:

1) How to Open a Restaurant? 10 easy steps to help you open a Restaurant of your own!
2) Top 10 Businessmen in the Industry & What You Can Learn From Them
3) Top-5 markets in India every businessperson should visit
4) Where to Get a Small Business License?
5) OkCredit: Simple, Paperless & Secure solution for businesses

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Q. What is the average investment one needs for opening a catering business, and what costs does it cover?

Ans. A minimum of Rs. 20 Lakhs is required to start your own catering business. The initial investment covers expenses for a few months, cost of equipment, raw material costs for the beginning, and rental costs as well.

Q. Are there any other licences required apart from those mentioned in the guide?

Ans. The other licences that may be required for a catering business are food handling licence, water licence, sewage permits, several insurances, etc.

Q. Is a liquor licence mandatory for a catering business?

Ans. The need for a liquor licence is dependent on the type of menu you wish to serve in your catering business. If any sort of alcoholic commodity is being served, then a liquor licence is deemed to be mandatory.

Q. Are other equipment apart from cooking and storage equipment necessary?

Ans. Other equipment like tin foils, serving plates, utensils are essential as it is necessary for conducting small activities of the catering business. It assists in the usage of cooking equipment and storage equipment.

Q. Is marketing strategy essential for this business?

Ans. Yes, it helps in connecting to a larger mass of consumers.