Cost Considerations For a Catering Business

Cost Considerations For a Catering Business

Are you starting a catering business? Examine your costs before kicking it off.

Question from HBT reader: Do you have a example for the start up cost for a catering business or what should be on your start up cost for catering?


Normal start-up costs for most businesses can be calculated using this Start-up Cost Calculator. If you haven’t already done so, creating a business plan and marketing analysis are good first steps.

Of special consideration for your business may be the cost of renting a commercial kitchen. Not only must you be equipped with the preparation tools and demands of high volume, you must pass county and/or local health safety inspections. Many residential kitchens will not meet the standards. Cost for a commercial kitchen will vary, but generally range from $100 and up per day.

Check with your local Chamber of Commerce for requirements and the cost of obtaining a Food Handler’s license and a business license.

Your prep costs (pots, pans, utensils) could be higher than normal for commercial applications. Be sure to ascertain your needs accurately.  The little things you discover you need later on can add up quickly.

Will you provide tables and chairs if needed? How about table linen? Check with local suppliers for costs and make sure they can meet your needs.

Other considerations may be a large enough van or covered truck that can handle your transportation needs, and you’ll want to make sure you have the means to keep foods hot or cold as needed.

You should check with your insurance agent about adequate coverage for your business, including your catering vehicle. Your coverage could run a bit higher than the average, run-of-the-mill business.

Since you must observe health and safety laws, and other things such as product liability, you may want to consider hiring an attorney to make sure you have covered all the bases and will be in compliance with all local and state agencies. It’s an added-on cost, but is well worth it since just one mistake can put you out of business.

Brett Krkosska provides how-to advice on small business and home-based work issues. He is the founder of HomeBizTools and the publisher of Straight Talk, a syndicated column that offers a unique perspective on today’s business issues.

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