2 answers
michaela
Student
3
Questions
Asked
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how much does the average catering business cost
I am a 17 year old junior in high school and I really enjoy baking and cooking and I want to start my own catering business but I don't know how much money I should save to start said business #high-school
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2 answers
Sue Butler
Manager
9
Answers
Lansing, Michigan
Updated
Sue’s Answer
Michaela,
Very good question. First, I would recommend you prepare a business plan that has projections for your costs and growth over a period of time, six months, one year, 18 months, etc., (sample business plans are available online). The plan should include if you will work from your own kitchen or commercial kitchen or a separate location, such as an empty store front. Also, include what you estimate your costs to be, i.e., equipment, monthly rent, business insurance, the amount of capital you need (money available to purchase supplies, food, equipment, business cards, flyers, attorney, accountant, banker, etc. ) I would recommend you start by speaking with an attorney who can advise you as to the legal requirements are for food preparation/food safety you need to be aware. The attorney can also draw up a contract you would have potential clients sign and incudes a breakdown of what is included in your services. The accountant can give you a good idea of the expenses, etc., you need to keep track of. The banker can review your business plan and offer input on other items to consider. Do you need to be licensed or have permits for the state you live in.
Assuming you want to start out small, i.e., catering small events for family and friends to get your feet wet and see what is needed in terms of planning, budgeting for food/decorations, etc., that you will need to use. Create forms and checklist to use. Keep track of all of your costs so you have a better idea of what you may want to charge for your services. You need to cover your costs, but also have money to live on and money to put back into the business so you can grow and expand. If you start out small, you may be able to work from home if you have a large kitchen area and plenty of storage and refrigerator space. If you work from your own kitchen, you could have start-up costs of say $1,000 and of course more, if you plan to have your own free standing location, the costs can vary.
Definitely do your research so you do not have surprises along the way. Good luck.
Sue
Very good question. First, I would recommend you prepare a business plan that has projections for your costs and growth over a period of time, six months, one year, 18 months, etc., (sample business plans are available online). The plan should include if you will work from your own kitchen or commercial kitchen or a separate location, such as an empty store front. Also, include what you estimate your costs to be, i.e., equipment, monthly rent, business insurance, the amount of capital you need (money available to purchase supplies, food, equipment, business cards, flyers, attorney, accountant, banker, etc. ) I would recommend you start by speaking with an attorney who can advise you as to the legal requirements are for food preparation/food safety you need to be aware. The attorney can also draw up a contract you would have potential clients sign and incudes a breakdown of what is included in your services. The accountant can give you a good idea of the expenses, etc., you need to keep track of. The banker can review your business plan and offer input on other items to consider. Do you need to be licensed or have permits for the state you live in.
Assuming you want to start out small, i.e., catering small events for family and friends to get your feet wet and see what is needed in terms of planning, budgeting for food/decorations, etc., that you will need to use. Create forms and checklist to use. Keep track of all of your costs so you have a better idea of what you may want to charge for your services. You need to cover your costs, but also have money to live on and money to put back into the business so you can grow and expand. If you start out small, you may be able to work from home if you have a large kitchen area and plenty of storage and refrigerator space. If you work from your own kitchen, you could have start-up costs of say $1,000 and of course more, if you plan to have your own free standing location, the costs can vary.
Definitely do your research so you do not have surprises along the way. Good luck.
Sue
Miranda N. Benson
Operations Manager
16
Answers
Seattle, Washington
Updated
Miranda N.’s Answer
Hello from a fellow baker! There's no one answer to this question, as every business is different. Most businesses scale over time, so they start with small sales and small expenses, and grow larger in both income and expenses as time continues and the company grows. If you plan to start small--say, an event a week, all out of your personal kitchen--you should be able to keep your startup costs in the thousands of dollars. But if you want to go all-in with an additional space, sprinter van for deliveries, and uniforms for servers, your costs will likely be in the $50k+ range from the get go. If you hire anyone on a full-time basis, your costs are likely in the hundreds of thousands.
If you're thinking of starting small, I identified some good starting steps below. I've often thought about starting my own baking business but I don't have the dedication. I admire your enthusiasm and wish you all the best!
Take a general business, entrepreneurship, or accounting class. Check your local community college, as well as your regional library, to find some cost-effective courses.
Find a few "like businesses" online (that aren't in your area, so aren't potential competitors). Ask if they'd be willing to chat over Zoom or exchange emails. Ask them some of the tougher questions--how much startup money did they need, how did they start out, etc.
Determine your catering range. Do you want to offer high-end plated meals for weddings and galas? Are you interested in home-style baking for bridal showers, family gatherings, and small-scale events? Narrowing your niche will help define your scope.
The most fun part--perfect your signature, base recipes. A good cream cheese frosting may just need a few ingredient swaps to be an excellent strawberry frosting. Base recipes will also help you identify what you're best at, and what you most enjoy making.
If you're thinking of starting small, I identified some good starting steps below. I've often thought about starting my own baking business but I don't have the dedication. I admire your enthusiasm and wish you all the best!
Miranda N. recommends the following next steps: