Catering is a popular way for private individuals and businesses to provide meals and refreshments at social events, meetings, location-based operations, and more.

For entrepreneurs, a catering business can be lucrative in its own right, or it can serve as a stepping stone to opening a brick-and-mortar restaurant. Starting a catering business requires careful budgeting and planning just like any other business venture, but presents some unique and exciting challenges of its own.

Learn how to start your catering business in Canada by following these 7 steps.

What is Catering?

Catering is part of the foodservice industry and usually focuses on social events and other gatherings. These events are usually hosted at a remote location like a hotel, park, film set, banquet halls, or event venue, rather than at local restaurants.

Before you start planning out your catering company it is a good idea to decide which type of catering business you want to start. There are a few different types of catering:

• Corporate catering: This refers to catering, that is for corporate and business events, which can range from small onsite office gatherings to larger offsite upscale events.
• Wedding catering: Wedding catering is probably the most common type of catering. A formal event, full-service caterers, will sometimes have to provide the decor, table arrangements, and presentation of the dishes.
• Social event catering: This type of catering is for more intimate events, like birthday parties, retirement celebrations, grand openings, bridal showers, etc. These events are usually smaller, which means catering menus will differ from event to event.
• Concession catering: Concession catering includes major sports events, film sets, seasonal competitions, and live concerts. Planning for these types of events requires careful planning to make sure you have the right menu for the people attending these events.

Whichever type of catering you choose, it's important that you are aware of what is expected of you in your chosen catering category and target audience. Some types are less formal than others, while others require you to be extremely organized. Be sure to make your choice based on your strengths.

Jobs in the catering industry 

Odds are you can’t run a catering business all by yourself. You need a crew that can help you in and out of the kitchen. Here are some important jobs that need to be filled:

• Chef
• Sous chef
• Prep cooks
• Waitstaff
• Bartender
• Dishwasher
• Event planners

Advantages & Disadvantages of Operating a Catering Business

Like any business, the catering industry has advantages and disadvantages that need to be considered. It's important to weigh the pros and cons and figure out if catering is the right fit for your lifestyle and mental health.

Pros of operating catering businesses

Flexibility

Whenever you own your business, it offers more flexibility than if you were working for someone else. For example, you can decide which clients to take on, what type of cuisine you want your catering business to specialize in, your hours, and more.

You are your own boss

Being your own boss has many benefits, including more control over your menu, a great sense of satisfaction, higher motivation and morale, and a diverse learning experience. Being your own boss means that you get to call the shots and get to decide which direction your business gets to grow towards.

Do what you love without the daily grind of restaurant work

Sometimes working at a restaurant can be stressful. The hours are usually long and you’re on your feet all day working towards someone else’s vision. Undoubtedly, catering is a lot of work, but it doesn’t entail the long 15 hours shifts you would be working in the restaurant industry. Catered events are usually for a couple of hours, and you get to set the menu alongside your clients.

Work closely with clients

When you’re working behind a line, you rarely speak to the customer and hear how they enjoy your food. However, when you run a catering business, you have direct contact with your clients and can adjust your menu according to their requests.

Cons of operating your own catering business

Big commitment

Any business that you start will require commitment, but the catering industry requires just a little bit more. The food industry is one of the hardest industries to get started in due to the amount of competition. When you first start your business, it'll take a while to find clients and build your reputation. 

Depending on which type of catering services you are offering, there'll also be off-seasons, so it's important that you stay committed to your business during those times in order to achieve success.

Customers

Dealing with customers can sometimes be challenging, especially when they’re not happy with your service. It's important to keep customers happy because one bad review can have a domino effect on your catering business. To combat negative reviews, learn how to increase positive reviews for your catering business here.

Starting a Catering Business in 7 Steps

1. The business model

Before starting a catering business of your own, you’ll need to be prepared for self-employment. Make sure you do your research on the tax implications of being self-employed, and how to go about registering your business and thinking up a marketable name and logo.

You want to be aware of what’s involved in the job description of a professional caterer. Being your own boss can be convenient, but it also means a lot of late nights, early mornings and weekends that you’ll be spending in the kitchen without the benefit of overtime pay.

As a professional caterer, you should have a real passion for cooking and serving clients high-quality meals. There’s also a lot of cleanups involved, so be ready to wash a lot of dishes or have it in your budget to hire someone. You need to be organized and very punctual. Clients won’t be pleased if you show up late to a time-sensitive function.

A good sense of direction and adaptability is also an advantage, as caterers are often travelling to new venues and neighbourhoods, working with different clients every day. Be prepared to determine the logistics of setting up warming plates, platters, and dishes in a variety of less-than-ideal spaces. Some caterers opt to combine transportation and kitchen space by buying a food truck.

This model is a favourite of caterers for film and television shoots, as a given client might hire one company for a set period of time but shoot on a different location each week. In this case, you’ll need to have the proper licencing to operate a food truck and be able to pay for expenses such as fuel and maintenance.

2. Create your home-based catering business plan

Whenever you start a business plan you have to write a business plan, which will help not only when you’re talking to investors, but it'll also help you stay organized in the early stages of your small catering business.

Here are some key sections you should include in your business plan:

• Executive summary: Summarize your business plan and outline growth for the next 5 years.
• Company description: Give an overview of your catering services, including type, cuisine, business name, etc. If catering events, then you may need to include details about event planning- will you be serving just food, or alcohol too? Where will you prepare food and how will you get it to the venue?
• Market research: This is an analysis of the catering industry and where they stand in the country you plan to operate in. What's your competition doing and how can you provide services to beat theirs? 
• Customer analysis: Analysis of your target market, and your ideal customers and contracts. This is where you will identify potential customers.
• Competitive analysis: This is where you research your competitors, see which part of the market they are in, in terms of value, quality, geographical location, and more, including event planning for food businesses. 
• Marketing plan: Outline your marketing strategy, which can include social media, print ads, digital ads, word of mouth referrals, and other forms of marketing.
• Organization and management plan: Outline your organization and team that will be responsible for the day-to-date operations of your catering company. This is your sous-chef, pastry chef, wait staff, etc.
• Financial plan: This is one of the most important parts of your business plan. Outline your financial plan and your budget for your startup costs, marketing strategies, salaries, and profit projections. This should include overhead costs of buying a delivery van, insurance coverage, food and cooking equipment, catering equipment license to serve alcohol, food handling training for staff, and any other necessary business expenses. 

3. Secure needed licenses

There are many health and safety measures you have to take into account when starting a business in the foodservice industry. Depending on the province you start a catering business in, there are a few food safety licenses you have to apply for and pay the health department. In most provinces, you need a food premises license and a food handlers certificate.

Each province and municipality has their own regulations about food prep and operating a catering business. Learn more about the licensing requirements in your province:

• Newfoundland and Labrador
• Nova Scotia
• PEI
• New Brunswick
• Quebec
• Ontario
• Manitoba
• Alberta
• B.C.
• Yukon
• North West Territories
• Nunavut

4. Plan your costs

Starting a catering business comes with its own unique set of expenses. Along with a budget for supplies, like food and drink, you’ll most likely need to budget for purchases of specialized equipment and for hiring staff.

Remember that most clients will expect you to provide catering equipment like platters, hot plates, tablecloths, and serving utensils. You’ll need to purchase enough of each to accommodate the number of people at a given event. Depending on the type of foods you plan on serving, you may also need to invest in some kitchen implements and small appliances.

A bare-basics catering company serving mainly prepacked foods can pick up plenty of clients like schools, low-budget film crews, and small businesses, but if you plan on serving at high-class events or preparing lunches for powerful executives, these types of clients will expect higher-quality, hand-prepared dishes. You’ll need to budget according to the quality of the foods you plan on serving.

Depending on the size and scope of your business, you may also need to think about renting commercial kitchen space. Working out of your own home might be fine for your first year or two of incorporation, but if the business goes well, you might want to expand your food preparation space. 

Eventually, you may find yourself in the market for a business lease. Hiring staff can also be a budgeting hurdle for catering companies. When thinking about a new cooking facility, consider using shared kitchens, like 2ndKitchen. This is a great way to save money and not worry about keeping your home up to the standards required by your municipality. Use sites like the Kitchen Door to help connect you to shared kitchens in your area. 

When you’re first starting out, you might be able to get by with conscripting a couple of friends or relatives to help you arrange platters or load dishes into your vehicle on the day of an event. As your company grows, you’ll need to hire part-time serving staff to help out at functions. Larger catering companies and ones that create daily meals for clients need a few full-time staff members to help out with prep as well as serving.

5. Create a menu

When brainstorming about the type of food you want to offer your clients, it's important to have a sample menu so customers can get an idea of what your cuisine covers. Customers usually pick from packages and will make custom requests. Having a sample menu will give them insight into what they can expect.

When creating your sample menu there are a few questions you can ask yourself:

• What's your style of cuisine?
• What type of events will you be catering?
• Who's your target market? 

The answers to these questions will give you a good idea of the type of cuisine you’ll be making, your ingredient costs, the price point of your menus, and the type of dinner service you want to offer your guests.

Overall, you may want to consider a menu that can work for both formal catered events like cocktail parties, a wedding reception, and corporate events, as well as casual affairs and small events like at-home dinner parties and luncheons. Having gluten-free and vegan options is also a good idea to cover any dietary restrictions your potential customers may have for such event planning catering.

6. Market and attract clients

Catering is a large field, and as such, most individual catering businesses opt to specialize their services to one particular area. Corporate catering businesses deliver food to office functions and may even cater daily lunches for employees, depending on the size and budget of the client company. Some caterers work specifically in the film industry, setting up craft services tents or lunch trailers for film crews on location.

Other business models are tailored to support social gatherings and events such as weddings with high-quality dining and drinks. It’s a good idea to narrow down the types of food you offer so clients will know what to expect. Are sandwiches the mainstay of your operation, or do you exclusively supply handcrafted chocolate desserts? Your budget will determine what types of food and equipment you are able to purchase, which can influence the clientele you attract.

If you’re more interested in catering to high-powered executives and celebrities, keep in mind you’ll probably have to spend a few years making a name for yourself, not to mention building up enough profitability to pay for the necessary expenses. Keep track of your target market’s needs, and know when to direct your marketing materials at certain people.

Summer barbecues and winter holiday functions alike are usually planned-out several months in advance; if you want to snag a contract for a company Christmas party, you’ll want to start marketing to managers and executives in September or October.

Catering is a large industry with plenty of opportunities to carve out your own niche. Use social media to your benefit, by posting links to your site, contact information, and photos of your food offerings. Learn more about social media marketing here.

With the right tools and planning, you can create food experiences that are memorable for your clients, and profitable for you.

7. Manage your finances

Keeping track of your finances is imperative when you are the owner of a small business. There are many expenses associated with running a food service business, including:

• Food cost
• Equipment cost
• Payroll
• Business and liquor license
• Kitchen leases or rent
• Transportation costs and insurance
• Permits
• Marketing

You will also have to make sure that your business is getting paid on time. Use our free small business invoice template for a professional invoice that will impress your clients.

Owning a catering business is a lot of work. While you’re figuring out your menu, plating, venue, and finding clients, you won’t have a lot of time to organize your accounting. Using QuickBooks Self-Employed for all your bookkeeping needs, from expense tracking to cash flow management, QuickBooks is a great tool to keep your finances on track. Try it free with a 30-day trial when you start a catering business today!