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Catering Business Startup Costs

Congratulations! You have chosen to start your own catering business and you want to create a truly unique experience while keeping your costs down and becoming an overall successful business. It’s a smart thing to sit down and analyze the costs of starting your business. It will give you clear insight on what you are going into and how to be prepare effectively.

Continue reading for the main startup costs associated with starting a catering business, as well as a few tips to get the biggest bang for your buck.

Licenses, Permits, and Insurance

You must comply with all laws and regulations within the catering industry. If you fail to do so, you could penalize your business and even end up in jail in some cases. You will want to comply with local, state, and country laws. A business license will be the first thing you need to get. This will give you permission to start a business in your state. Then you will need a catering license which will need to be renewed yearly. Next you will need to get all the necessary permits for your catering business. Permits will depend on local laws and regulations, and they can range from anything for serving food to the location of your business. There will be different levels of insurance you can choose from. However, you will want to ensure that your level of insurance protects your business normal everyday risk within the catering industry.

Catering Equipment

You have to have all of the tools to build a successful catering company. From the technology you need to your cooking utensils, your equipment is what builds the customer experience. Some questions you might ask yourself is should I buy used? What technology is worth investing in? What is the bare minimum equipment I need to get started? And What do I need to buy as I’m building my business? Before you buy anything, it’s important you do your research and get all of your questions ask first. Catering equipment can be one of your biggest expenses starting out so it’s important you make smart decisions.


How much staff will you need when you first start your catering business? Usually it’s best to start out with the least amount of staff as possible. Additionally, you want to be able to pay your starting staff a decent amount. If you start your business with a high employee turnover, it can be extremely damaging to your reputation. It doesn’t help that the hospitality industry has the highest turnover out of any other industry, but if you do the things you can control to keep your employees than do it. Be flexible while also being smart about your labor.


Food costs can add up to be huge chunk of change if you’re not careful. From food waste to food suppliers and your menu, there are a lot of factors to keeping your food costs balanced. If you decide to invest in a good management software, they usually come with tools that can manage your food costs most effectively. If you think you can cut it with the old process of eyeballing and using manual spreadsheets, you may cut yourself thin with human error.


You have to get the word out about your business or you won’t get any customers. Since your new to the catering industry, you will have little to no word of mouth capabilities. Every small business needs some level of marketing to survive. Social media will be the perfect place to start if you’re on a small budget. A basic website will be your next step. If you have a website, your business appears more legitimate. Additionally, it can be a great way to collect leads and therefore increase sales. As your business starts to grow, then you will want to consider adding on more marketing channels.

Real Estate

Where will be the central hub of your business? There are many catering businesses that start out of their home and graduate to bigger and bigger offices with commercial kitchens. If you are tight on budget, starting out of your home is not a bad thing. You can save money on permits, and even some of your equipment.

Closing Words of Advice

The bottom line is you want to balance your costs with the goals of your catering business. You don’t want to spend all your money up front either. The goal is to spend the minimum amount without sacrificing any of the goals of your business. Anyone within the hospitality industry will tell you that things happen. It’s important you have a reserve on hand for things like slow seasons, unexpected staff turnover, and more.