So you want to learn how to start a catering business? Starting a catering business is an interesting prospect for many people who either love food or are already in the catering business. It also attracts a lot of people who are looking to break into the restaurant business but aren’t ready to take on the risk. Take the following statistics brought to us courtesy of Bizfluent into consideration: the average profit margin of catering businesses is 10-12% whereas the average profit margin for actual restaurants is just 4-7%. These numbers indicate a great opportunity for people interested in starting a business.
But there is a lot to consider if you are thinking about starting a catering business in Dallas, TX in particular. In the following guide, we will be talking about the first basic steps you need to take, the kind of equipment you will need, and what foods you can legally cater in Texas.
What Equipment do You Need to Start a Catering Business?
Depending on the kind of food you plan to provide to your clientele (foods ready for office lunch hours, formal event-goers, etc.) you will need certain types of equipment. Take a look at the following breakdown:
If you plan on catering guest events (weddings, corporate events, etc.) you will need portable chairs, tables, linens, beverage dispensers, serving trays, and utensils. Be diligent about estimating the expected turnout so that you have enough supplies for everyone.
On-Site Cooking Equipment
Catering companies are formed by the types of food they provide. If you plan to serve food that can be prepared in a home or commercial kitchen and transported, you won’t need on-site cooking equipment. But if you plan to cook food on-site you will need food pans, holding cabinets, commercial induction ranges, cold food tables, etc.
In most cases, you will need chafing dishes and buffet serving materials like tongs, ladles, and trays. You should also know that most of the aforementioned equipment can be bought or rented. Pricing can vary, but when you buy or rent in bulk, you get a discount. This is especially true if you’re a regular customer with a catering license.
The biggest item here is a catering van that can transport refrigerated or heated food. Ultimately, your entire business rests on your ability to transfer food to the destination. Without transportation, catering is never going to work out.
Get the Proper Insurance
Even if your catering business is small and operated out of your home, don’t assume that your current insurance will cover everything that can happen. From workman’s compensation insurance from your employees to liability insurance, you need to be properly covered.
In the case of catering businesses, general liability insurance for commercial businesses should cover everything. But be sure to talk to an insurance agent who is familiar with food services in Texas. Also, be sure that your vehicles are properly insured.
Create your Menu
When you are creating a menu for your catering business, you need to plan carefully. You must first identify your target market. Will you be catering to offices where lunch items like sandwiches, soups, and salads will be common fare? Or do you plan to cater special events where the menu is going to be more varied? Planning your menu with your clientele in mind is essential because you don’t want to waste money investing in materials and equipment that don’t suit your operations.
There are some other considerations based on where you stand right now. Take a look at what we mean:
- If you Own a Restaurant – If you want to start a catering service as an extended arm of your existing restaurant then you can’t simply offer the same menu you do in your establishment. That’s because your kitchen probably produces a lot of dishes that can’t be transported. Instead, you should think about the dishes you can make in your existing kitchen in bulk that can be easily and healthily transported.
- If you Don’t Own a Restaurant – If you don’t have access to a commercial kitchen and plan to operate out of your home kitchen, the principle is still pretty much the same: create a list of foods that you can make en masse that can also be transported easily. But if you can, do try to rent out commercial kitchen space to expand your menu. Using a commercial kitchen will also enable you to legally offer more foods which leads us to our next section.
What Foods can you Legally Serve?
If you plan to run your catering business out of your home kitchen, your options are going to be very limited. That’s because Texas is very restrictive on the foods that you can legally serve out of your home kitchen. You are pretty much relegated to dry baked goods, dehydrated fruit items, coffee, candy, and condiments. But if you use a regulated commercial kitchen, your horizons will be broadened substantially.
Get your Catering Business off the Ground
We hope you have found this ‘how to start a catering business’ guide helpful. For more helpful resources and professional business guidance, become a member of the thriving community here at DFW Biz Pros today.