How to start a catering business

If you’re passionate about events and flavour, starting a catering business could be a lucrative opportunity for you. However, catering businesses aren’t without their unique logistical challenges, so you’ll need to learn the basics to overcome them. Find out how to start a catering business ready for any occasion in this article.

We’ll walk you through the key aspects of how to get set up and event ready for any occasion in this article, including:

  • How to set up your business legally
  • How to develop a menu
  • Dietary safety, preferences and allergens
  • How to advertise your new business
  • How to engage your target customers
  • How to budget for your business and manage your finances

Take the first step to building a business and learn how you can do it faster and more effectively using our guide for new catering entrepreneurs. We’ll also show you how you can save hundreds of hours back from your admin using accounting software solutions like Countingup.

How to set up your business legally

Depending on your direction for your business, you’ll need to complete three to four important legal procedures in order to get set up: declare your new income to HMRC, meet the safety requirements for food establishments in your local area, get a driving licence for transporting food and obtain an alcohol licence.

Set up your business 

One of the earliest hurdles, as you establish your business, is how it’s run legally. Catering businesses have two main routes as they start out, but both options allow you to keep your profits and pay taxes to HMRC.

One of the quickest ways is to become a sole trader as all you have to do is register for Self Assessment. When doing so, you’ll need to verify who you are and disclose routine information about your new business (such as your address and business name). For more information and help with the process, read our article How to register as a sole trader.

Although, as a catering business, you may need to hire waiting or bar staff depending on the venue and needs of your clients. While you can hire people as a sole trader, it’s typically done through a limited company as you’re more legally protected if things were to go wrong. You can learn more about the differences between ways to set up your business by reading our article How to set up your business: Sole trader or limited company.

Getting food business licences before you operate

Regardless of which method you choose in setting up your business, you’ll need to register with your local council for a food business licence. This step is crucial as you’ll need to meet the requirements for things like food hygiene and storage. 

The registration process is free but you must make sure to register at least 28 days before operating at events in order to avoid fines or other legal trouble from running an unregistered food business.

Driving licence

Now you need to plan how you’ll transport your catering equipment and food. As you first start, you may be able to use a standard category B driving licence (allowing you to use a car and tow up to a certain weight).

Although, as your business grows in the future, you may need to upgrade your licence for larger vehicles in category C or D (like a van with temperature controls). Find out more information on what your current licence allows you to do on the website.

Alcohol licence

While food sits at the heart of a catering business, you can earn extra money by providing a bar. 

The application process for alcohol licences differs depending on where you operate in the UK. Licences may be called a ‘Temporary Events Notice’ in England and Wales or an ‘Occasional licence’ in Scotland and Northern Ireland. Find out more about alcohol licencing in your local area here.

How to develop menu items

Developing a menu as a catering business means you’ll have to be flexible. You may find that your clients want to be more involved in deciding menu items for their event or need certain items substituted for dietary needs.

Catering professionals need to do more than taste tests – you’ll also need to plan how you’ll cook and deliver dishes at scale and in a timely fashion. This isn’t to say that taste and presentation aren’t important, but nowadays, customers are looking for other elements in their food. We’ve outlined the basic steps to develop your menu below. 

Step 1: Experiment and perfect your recipes 

Given that catering businesses can be hired for a variety of functions, including weddings, birthdays, funerals, and corporate events, your menu capabilities will need to be flexible. Specifically, you may wish to have a collection of customer favourites on offer as well as readying various substitutions that cater for dietary preferences or allergens (discussed further below). On top of this, you should consider how your menu can evolve to include different cuisines if your customers ask. 

As you experiment with different dish combinations, make sure to record your ingredients and processes accurately. 

Step 2: Measure how long your goods can last 

When simplifying your menu items, preparing particular foods like rice, pasta, sauces and dressings can help you save time from cooking on-site. However, you’ll need to have an idea of how they’ll last once prepared with use-by dates. Regardless of what you’re making, this applies to cooked and uncooked foods – for example, pre-chopped vegetables and meats.

Given that you’ll mainly provide food for events as they happen, you won’t have to worry as much about communicating best before dates to customers. Instead, you should focus primarily on understanding the standards and specifications of food storage along with any staff you hire.

If you’re entirely new to catering processes, food storage, and temperature requirements, the UK’s Food Standard Agency has support available on hygiene and storage, along with online training courses.

Step 3: Plan how you’ll deliver or serve it to customers

This final step concerns how you’ll present your food to customers at their events. 

Depending on the client’s wishes or how you want to run your business, you can either provide your food buffet style or deliver a more bespoke experience with table service. While there won’t be quite as much emphasis on presentation with buffet-style serving, how customers first see their food is crucial.

Try to strike a balance between ways in which your meals can be well presented as customers see them without compromising on how this can be achieved at scale as you cater for potentially dozens of people.

Dietary safety, preferences, and allergens

We’ve already briefly mentioned how you’ll need to make sure your food items are safe once they’re made with things like use-by dates and fridges. Unfortunately, some customers have additional dietary preferences and needs that you need to be aware of. 

As an overview, you’ll need to ensure your ingredients comply with UK safety regulations, and depending on the type of cuisine you make, dangers from certain food groups will be more relevant. For example, cross-contamination from fish, salmonella tested eggs and minimum cooking temperatures for meats are core concerns for food safety. In particular, note that minimum cooking temperatures vary across the UK depending on which location your food licence grants. 

Even beyond the safety of ingredients as they’re cooked, some food groups present danger to customers regardless – these are known as allergies and intolerances. Common ones include fish, eggs, wheat, nuts and more. When initially providing a menu to clients, you’ll need to disclose which dishes contain such allergens and ingredients. Likewise, when preparing food, you’ll need to control how surfaces are used to prevent allergen ingredients from getting in dishes they shouldn’t. Ideally, similar courtesies for vegan/vegetarian and halal customers should also be followed in order to give your new business a good reputation. 

Critically, if you can’t guarantee that your dishes are entirely free of harmful ingredients when they were made (especially nuts), it’s best to be careful and declare trace amounts to customers. The UK’s Food Standards Agency has advice and training on allergens for new food businesses available online.

How to advertise your new business

Catering businesses have a wide range of options in their advertising methods and even enjoy a captive audience during events that shouldn’t go unnoticed.

As a starting point, you use social media websites like Facebook, Instagram or Pinterest to show off your tasty dishes and circulate advertisements relatively cheaply. As you’re taking photographs and videos of your work at events, take simple steps to improve the quality of your content like adequate lighting and small editing tweaks so certain colours translate well to customers’ screens. Learn more about using social media in our guide How to use social media for business

Marketing your business can even use small steps like including a logo and business name on your menu as customers first view it. From here, as customers recommend catering providers through word of mouth advertising, your strong band presence can help invite new customers. Read more about business marketing in our article What is small business marketing?

How to engage your target customers

If your business is to be successful, you need to have a strong familiarity with your target customers. 

Even if you’re already advertising on social media and building a respectable following online, identifying new ways to speak directly to your ideal customers is vital. Specifically, using more targeted advertising methods like wedding trade shows or food blogs can be a powerful way to build more brand awareness.

To better understand your target audience and how to catch their attention, read more in our article What is a target market and how to define yours. From here, once you have your target market established, you’ll then need to use this information effectively in order to build your business. You can learn more about marrying your target market information to your business advertising in our article How to create a marketing strategy for small businesses.

How to budget for your business

Catering businesses can be expensive to start depending on your aims but offer a highly rewarding profit method once you’re set up. You’ll need an informed and well-researched budget in order to get your business established properly without surprise expenses. Budgeting for business is a relatively straightforward practice, which is why we’ve got dedicated advice ready in our article How to budget for starting a business

In particular, catering businesses and other hospitality providers need to pay close attention to their profits. New businesses often lose money for their first few months while they set up, yet many manage to grow beyond and make a profit in later months. However, many food businesses operate on thin profit margins. For this reason, it’s essential to know how different strategies and investment options change your business’ profits. Learn how to calculate your business’ profit rates with our article How to calculate profit margin.

You should aim to diversify your business’ offers to achieve larger margins by including things like at-home catering services for luxury clients or incorporating hibachi-style catering: cooking food for customers live and in-person.

Keep your finances organised easily with a simple app

Even if you’re a whiz in the kitchen, bookkeeping can seem like a daunting subject – especially if you’re unfamiliar with accounting practices and tax compliance standards. 

However, built for small business owners, the Countingup app is the two-in-one business current account and accounting software solution that makes it easy. The Countingup app automates time-consuming bookkeeping admin, giving you more time to focus on growing your business, meeting customer demand and finessing your advertising.

Countingup provides key business tools like automated invoicing and a receipt capture tool so you can keep organised records easily when you’re on the go. You can also take advantage of the real-time profit and loss reporting feature so you can get insights into your business at any moment, and enjoy tax estimates on your profits so you’re not caught out by a tax bill at the end of the year.

Gain complete confidence in your new business’ financial records. Find out more about Countingup here and sign up for free today.