What Are the Start Up Costs for Opening a Catering Business?
Start up costs for a catering business will vary depending on the type of catering you are doing, equipment you will need, and location of your business. Estimates will range from $15,000 to $40,000 depending on the amount of equipment you require. (Dollar amounts listed are estimates based on typical costs in January, 2010. Your actual expenses may be less or more depending on any number of variables.)
Other People Are Reading
-
Location and Facility: $3,000 to $6,000
-
You must acquire an "approved source," which is a health department approved licensed public or private facility to conduct your food preparation and catering in accordance with your state's Environmental Health guidelines. Expenses will include rental fees, security deposits, utilities, initial repairs, and ongoing maintenance to ensure the facility is up to inspection standards.
Licenses and Permits: $2,000 to $3,000
-
Certain qualifications or permits may be required for you to be a caterer, such as being Serv-Safe certified and having the local Health Department annually approve your facility. Additional expenses may include business liability insurance, commercial vehicle insurance, Tax ID's and/or Sales and Use Tax permits for your state, and special event permits if catering at a festival or fair.
-
Employee Costs: $2,000 to $4,000
-
If you are hiring helpers, additional monies will be needed ranging from payroll and accounting services. You may also be required by law to make Medicare contributions, ensure your environment is OSHA safe, and carry special insurance such as Worker's Compensation insurance in accordance to your local state's guidelines.
Equipment and Supplies: $7,000 to $25,000
-
Certainly the most expensive category, you will not only need to equip your kitchen with basic commercial appliances, but have methods of transporting your food in accordance with health guidelines to an event or catering job. Food grade equipment and supplies will be needed, from coolers to chafing dishes, all of which if rated NSF approved will be more expensive. NSF International, The Public Health and Safety Company establishes standards and certifications for food grade equipment and supplies, which some local health departments require caterers to use.
Dry Stock, Food and Beverage: $1,000 to $2,000
-
Dry stock, food and beverages will be an additional expense of catering and should be bought in bulk per job to avoid unnecessary overages. Opening a commercial food account through a distributor or wholesale club will be your best route for food, stock and beverages, although acquiring alcoholic beverages may require additional expenses, permits and fees.
-
References
Resources
- Photo Credit Image by Flickr.com, courtesy of Andres Rueda
