How to Start a Food Service Business

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When starting a food service business, it’s important to have a road map to success. Having a few strategies in place, such as finding underserved market segments, can increase your business’s chance of success. It’s also important to take care of the logistics, such as applying for a business license with your city and securing food handler's cards with your department of health. Here’s a guide to starting a food service business.

Determine what type of food business you’ll launch. There are several options, including a bakery, catering company or restaurant. You can also choose mobile options, such as a mobile coffee or sandwich car. Once you’ve identified the type of business, visit competitors during peak business hours to determine how much demand exists for the service.

Identify what niche your food business will serve. For example, there may be fierce competition in the coffee business, but no companies offering mobile coffee services that provide on-site espresso service for corporate events and weddings. Identifying unique niches and targeting underserved markets will assist in making your business a success.

Find a location for your food business. Once you’ve identified your target market, it’s time to secure a space for your food business. Make sure to select space that’s close to your target demographic. For example, if you’re opening a catering company targeting corporate clients, lease office space in a large building close to potential clients.

Secure the necessary licenses. Most state require that individuals apply for a business license at their city hall office. You may also need a food handler’s permit, which can be obtained at your local health department. And if you’ll be serving liquor, apply for a liquor license with your state’s licensing department.

Purchase equipment for your food business. After you’ve secured the necessary licenses, invest in equipment to run your business. Check out discount suppliers such as Gala Source (see Resources) to get low prices on items to run you business.

Tips & Warnings

  • Save enough money to pay your living expenses for 6 to 12 months. The first several months of operating your food service business will be the most difficult. Having living expenses tucked away will reduce some of the pressure.
  • Expect to work long hours in the beginning. When launching your food business, you'll be working long hours -- 40 to 60 hours per week (and more in some cases). After your business experiences success, you'll have the ability to hire additional staff and reduce your hours.

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