Business Idea

Start A Catering Business

About

Starting a catering business requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell catering, or selling catering online, you can use this page as a guide for everything you'll need to know.

Key stats

market size
$11.6B
revenue (monthly)
$20K
starting costs
$46.8K
gross margin
11%
avg product price
$1500
time to build
180 months
growth
Word of mouth
business model
Brick & Mortar
time investment
Full time

About

Starting a catering business requires a great deal of effort, dedication, and most importantly passion.

If you're interested in how to sell catering, or selling catering online, you can use this page as a guide for everything you'll need to know.

Key stats

market size
$11.6B
revenue (monthly)
$20K
starting costs
$46.8K
gross margin
11%
avg product price
$1500

 

time to build
180 months
growth
Word of mouth
business model
Brick & Mortar
time investment
Full time

Startup Costs

Min Startup Costs Max Startup Costs
Employee & Freelancer Expenses $151 $352
Website Costs $223 $7,215
Business Formation Fees $600 $4,700
Equipment & Supply Expenses $66 $1,200
Retail Business Expenses $1,250 $11,650
Inventory Expenses $350 $14,750
Food Business Expenses $2,125 $36,000
Vehicle Expenses $2 $10,004
Advertising & Marketing Costs $75 $5,286
Software Expenses $150 $2,420
Total Startup Costs $4,992 $93,577

Successful Businesses

Business URL Rank
UCLA Conferences & Catering conferences.ucla.edu #2,352
Chipotle chipotle.com #6,595
University of Notre Dame Catering catering.nd.edu #8,055
WSU University Catering catering.wsu.edu #9,547
KSU Catering catering.kennesaw.edu #15,034
IU Catering catering.indiana.edu #18,572
USU Catering catering.usu.edu #22,007
Qdoba catering.qdoba.com #81,428
Hospitality recruitment at Caterer.com – find hotel, restaurant, chef & bar jobs today caterer.com #129,412
Fogo de Chão fogodechao.com #131,605
Lunds & Byerlys Catering catering.lundsandbyerlys.com #152,511

Pros & Cons

Pros Description
Flexibility You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.
Ability to start your business from home It's not necessary to have a physical storefront or office space to get your business started. You can do everything from the comfort of your own home, at least in the beginning!
Little startup costs required The cost to start a catering business costs significantly less money than most businesses, ranging anywhere from 62 to 93,577.
Meaningful business connections You never know who you will meet as a catering business. This could be the start of an incredible business opportunity!
High customer retention rates Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.
Pick & choose the clients you work with Catering Businesses have the ability to choose the clients they work with. You have the freedom to work with only a few loyal clients or with hundreds of clients!
Cons Description
Low margins The gross margins for your catering business are typically around 11%, which can make it more challenging to incur new expenses and maintain profitability.
High employee turnover In the catering business, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.
Taxes As a catering business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.
Niche Market A niche business is not necessarily a bad thing, in fact, it can be the key to your success. However, it can be more challenging and time consuming to find the perfect niche market and target audience.
High overhead expenses With starting a catering business, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.
You may need to charge sales tax If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out [this article](https://www.thebalancesmb.com/do-i-need-to-collect-sales-taxes-in-my-state-398913)

Marketing Ideas

  • 1

    Affiliate Program

    Affiliate marketing is a great way to bring in a new revenue stream, especially when you don't sell products or services.

    Simply put, an affiliate program is an agreement where a business pays another business or influencer ("the affiliate") a commission for sending traffic and/or sales their way.

    The affiliate typically gets a unique link where clicks and conversions can be tracked.

  • 2

    Direct Sales

    Direct sales strategy implies a direct contact between a seller and a consumer without the involvement of any third party. Direct selling is popular in sectors where sellers communicate with their clientele personally. The sales technique occurs at non-store locations which include at home, work, or online.

    For direct selling to succeed, hire a few (or many) salespeople to support the sales conversion process. It's critical that you assign them specific roles and responsibilities to nurture the client and provide excellent support.

  • 3

    Word of mouth

    Word of mouth is when a consumers reflects their interest in a company’s product or service in their daily dialogues.

    Therefore, word of mouth advertising is essentially a free advertising triggered by the customers experience.

    According to Nielsen, 92% of people trust recommendations from friends and family.

    Therefore, in today’s hyper-connected world, a single recommendation through a word of mouth can have a huge impact to your business.