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What is a Catering Business from Home?
Do you have a passion for cooking? Are you an organised person with a flair for business? If so, setting up your own catering business from home could be extremely rewarding. Not only will you have the luxury of working for yourself, but you can also use your creative cooking skills and entrepreneurial streak to create a potentially lucrative business.
Your catering business can encompass many different tasks. Your responsibilities as a caterer could include:
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- Planning a menu.
- Sourcing ingredients.
- Preparing and cooking food.
- Transporting or delivering food.
- Presenting or serving food.
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Running your own catering business from home can be extremely profitable. The catering industry in the UK is worth more than £405 million. Since the initial outbreak of the Covid-19 pandemic, when businesses and events were closed, the catering industry is now beginning to regain momentum. With more people than ever changing careers, now could be the perfect time to enter the world of catering.
A catering business from home, also known as home catering, would involve you preparing and cooking the food at home. You can then deliver the food to parties, functions and events. Depending on the type of catering business you choose to run, you could also present and serve the food. Some caterers even choose to be involved in the clean-up process after the event. A catering business can be a part-time or full-time career. If you are looking for a more flexible schedule, you can choose your own hours and only accept certain bookings. Caterers usually get most of their business in the evening or at weekends.
As a caterer, the success of your business is likely to depend on several factors, such as:
- The quality and taste of the food you supply – Sourcing food from quality suppliers is key. You may also want to plan a menu that suits different tastes, can be changed to accommodate food allergies and features vegetarian and vegan food. It is also important to consider the practicality of the food you cook and how time-consuming or difficult the dishes are to prepare. Most importantly, your food should be delicious. Consider trying your recipes on friends and family before including them in your menu.
- Your organisational skills – All caterers operate in different ways, depending on the type of caterer they are. The behind-the-scenes food preparation can be time-consuming and is a key aspect of catering. Being organised is essential to the success of your business.
- Marketing and word of mouth – Marketing your business is key, especially in the beginning. You could create fliers and online posts, attend food fairs and wedding fairs, and advertise online. Word of mouth is also a great way to ensure your business succeeds. You could receive repeat business from the same client, or they could recommend you to others.
Depending on the type of catering you provide you may first have a meeting with the client. This meeting is where you will discuss the menu, the number of people you will be catering for, the venue and the client’s vision.
Some caterers choose to have a pre-prepared menu that the client can choose from. This menu will have been planned ahead of time and will feature tried and tested dishes.
There are many different ways to run your catering business from home. Think about the type of business you want to run and how best to achieve this before starting up your catering business.
Types of Customers
The types of customers you plan to cater for is also known as your target market. There are a variety of customers you can target with your catering business.
Potential target markets include:
- Businesses and corporations.
- Parties and other social events.
- Weddings and other formal celebrations.
- Outdoor events.
- Children’s events.
- Vegetarian or vegan customers.
- Customers with specific religious beliefs, for example, Halal food.
- Regular or repeat customers.
Many caterers will opt for a specific target market, based on a number of factors.
This could include:
- Your pricing strategy – How much do you plan to spend on your menu and how much do you plan to charge your customers? Many caterers have a price per head for events they cater. The price you charge per person will affect your target market. For example, wedding caterers will usually charge more per head, compared to catering for children’s birthday parties.
- Your menu – The menu you provide will be a significant factor in the type of customers you attract. A caterer who cooks gourmet food will target different customers to a caterer who provides buffet food.
- Competition – Before deciding your target market, it may be worth researching other caterers in your area. For example, if there are a lot of social event caterers but very few corporate caterers, it may be worth tapping into this less competitive market. Researching your competition can also help you to find ways to stand out.
- Your abilities and experience – This could be another significant factor in deciding the type of catering you will provide. For example, if you are an experienced chef who is looking to open your own catering business, you may be more likely to target upmarket events with sit-down meals.
Equipment You Will Need
A catering business can be a low-investment enterprise. However, even though you are working from home, you will likely need to purchase specialist equipment. The type of equipment you will need will depend on the type of catering you plan to provide.
Typical start-up costs and the cost of catering equipment can vary significantly based on a number of factors, such as the type of catering you will supply, your equipment needs and the size of the catering jobs you plan to provide. The cost of purchasing equipment for your catering business can vary significantly.
Below is a general list of equipment required for many caterers.
Cooking equipment
Cooking equipment requirements can vary significantly, based on the type of catering you will provide and the amount of food you plan to prepare. You may be able to use some of the cooking equipment you already have in your home, such as your oven and grill. However, for large-scale catering, you may require additional cooking equipment. Some caterers even convert a dedicated space or room in their house for their business. You may also want to consider cooking equipment that can be transported and stationed at an event. This could include induction cookers and portable gas ranges.
Utensils
This could include cooking utensils and serving utensils. Some catering businesses also provide their customers with eating utensils, so consider the type of catering you will provide before purchasing utensils. Investing in a good set of professional kitchen knives may also speed up your prep work.
Pots and pans
This could include frying pans, woks, saucepans and crockpots. It may be worth investing in more expensive, higher-quality pots and pans initially to save you from needing to replace them. Non-stick pans can also be a huge advantage.
Kitchen tools and accessories
Depending on the food you are supplying, there are some additional kitchen accessories you may require. This could include blenders, food processors, chopping boards, colanders, thermometers and timers.
Additional supplies
This could encompass any other items that are required for cooking and storing your food. Examples include aluminium foil, clingfilm and baking paper.
Food stock and ingredients
It is not recommended to purchase stock or ingredients until you have finalised your menu. In fact, many caterers choose to only purchase stock once they have secured a client. This is especially true of fresh food, meat and perishables. This is to avoid food wastage and loss of investment. However, it is recommended that you spend time sourcing your ingredients, even before you gain clients. This ensures you have the best ingredients at a competitive price. Consider wholesale food distributors, manufacturers and local suppliers. Once you have secured some clients, it may be more cost-effective to buy some food stock in bulk.
Transport supplies
If you are preparing the food at home, you will need equipment to transport the food from your home to the event location, without losing temperature. Insulated food trays or containers will help to keep the food hot or cold. For any food that does not require a specific temperature, storage boxes and containers should be sufficient.
Food labels
Food labels are essential in catering. It is required by law to show the name of the food, any allergen information, additives and if any ingredients have been irradiated or come from genetically modified sources. For more information on the 14 food allergens all caterers should be aware of, consult our knowledge base.
Display items
Many clients may prefer to hire a caterer who also considers how the food will be displayed. This could be especially true if you are catering for a special event or providing a buffet. You could even add the cost of renting display items to your price list. Display items could include risers, cake stands, centrepieces, display trays and folding tables. Warming trays and chafing dishes can also be used as a practical yet attractive way of displaying cooked food and keeping it hot.
Serving equipment
Depending on the type of event you are catering for and the venue, you may have to provide serving equipment. This could include serving platters and serving utensils, such as tongs and ladles.
Transport
Consider how you plan to transport the food from your home to the event. If you already have a car, you may be able to use this for transport. However, if you are planning to cater large events with more than a hundred people, you may want to consider investing in a dedicated van or food delivery vehicle.
Cleaning equipment
When you receive a visit from the Environmental Health Office (EHO), they will pay particular attention to how you keep your kitchen, food preparation and food storage areas clean. You will likely require different cleaning materials for different areas of your kitchen. Some cleaning equipment you should invest in includes cloths, sponges, a sweeping brush, a mop, antibacterial surface cleaners, sanitiser and dishwashing soap.
Appropriate clothing
Even though you may be preparing the food at home, you should still ensure you are wearing appropriate clothing. An apron and hairnet should be worn for hygiene purposes. Gloves may also be recommended when preparing food. If you plan to serve food as part of your catering business, you may also need to invest in a uniform.
Typical Costs
Start-up costs can vary significantly, depending on the type of catering business from home you plan to run. To help you get an idea of the typical start-up costs you can expect, we will look at the factors you need to consider.
Equipment costs
As mentioned above, the cost of purchasing equipment can vary significantly. To reduce your equipment costs, you could look into renting some of the larger, more expensive equipment. To get an estimate of how much equipment is likely to cost you, make a list of the things you need. Equipment costs can vary from £1,000 to as high as £50,000.
Costs of advertising
It is generally recommended that businesses spend no more than 10% of their revenue on advertising. So if you expect to make £50,000 per year, no more than £5,000 should be spent on advertising. If you plan to advertise at wedding fairs, expect to pay around £200 + VAT for your space.
Food hygiene training
The costs of food hygiene training can vary significantly. Food hygiene training is a legal requirement and is something that many potential clients will look for. We offer online food hygiene training with certification for £20 + VAT. You may also want to consider undertaking training for Allergen Awareness. Consult our online Food Hygiene courses for more information.
Insurance
The cost of business insurance can vary significantly, depending on the type and amount of coverage you choose. Public Liability Insurance, Product Liability Insurance and Legal Indemnity Insurance are usually recommended for catering businesses. You should expect to pay £100-£200 per year for insurance.
Food stock and ingredients
You should aim for the cost of your stock to be no more than 30%-40% of your food sale price. This means in order to estimate your food stock costs, you first need to estimate the price of your menu and the number of menu sales you plan to make each month. For example, if your menu is priced at £20 per person and you plan to cater for 500 people per month, your menu cost is approximated at £10,000. This means you should be spending no more than £3,000-£4,000 per month on ingredients.
Replacing or upgrading equipment
It is inevitable that some equipment will need to be replaced or upgraded as your business grows. The cost of this will vary significantly depending on the type of equipment you are replacing. For example, upgrading your car to a van could cost £30,000, whereas replacing utensils may only cost £100.
Typical Pricing
How much you charge customers could vary, depending on a number of reasons. Many catering from home business owners find it easier to have a price per head for their catering. It can be very difficult to decide how much to charge, especially when you are just starting your business.
Pricing can vary significantly, with some caterers charging £10 per head and others as high as £100 per head. The quality of the food and service you provide will determine your pricing. If you are proving a gourmet sit-down meal, your pricing is likely to be significantly higher than if you are providing a cold buffet.
There are several factors to consider when deciding your pricing.
Ingredients
Once you have planned your menu, calculate how much the ingredients are going to cost. As mentioned earlier, your ingredients should be no more than 30%-40% of your food sale price, although many caterers aim for 30%. Once you have calculated the ingredient cost, you can use this to calculate the food sale cost.
Labour and time
How much time is it going to take you to prepare and organise for the job? Will you need to hire any additional staff? These are all important considerations when deciding your pricing.
Overhead costs
This could include delivery costs and any other business-related costs. This could include the cost of your insurance and electricity and gas. You can split the total of these costs between your different clients.
Any other services you provide
If you are involved in serving the food or cleaning up the venue, this should also be included in your pricing.
Safely Running a Catering Business
You will inevitably receive a visit from the Environmental Health Office (EHO) within the first weeks or months of opening your catering business. They will check that you are safely running your catering business and have the correct protocols in place.
To ensure you are safely running your catering business, there are several protocols you should follow.
Be aware of HACCP and use risk assessments
Hazard Analysis and Critical Control Point (HACCP) helps you to manage food and hygiene safety procedures. This ensures you have minimised potential hazards and risks and are actively promoting safety procedures. Although written risk assessments are not a legal requirement in businesses with less than 5 employees, they can help to protect you and your customers and demonstrate your awareness of HACCP and the actions you have put into place. For more information about HACCP, consult our knowledge base.
Food hygiene training
As mentioned before, food hygiene training is an essential safety protocol for catering businesses at home.
Firefighting equipment
Businesses are required to have firefighting equipment on site at all times. Consult gov.uk for more information on firefighting requirements.
Be aware of cooking temperatures
This helps to reduce or eliminate the risk of food poisoning. Using a food thermometer could be an excellent way of ensuring food is cooked and stored at the correct temperature. The Food Hygiene Company has some useful information on food temperature guidelines for you to consult.
Cleaning
Cleaning protocols are essential in the food industry. Ensure you are aware of recommended protocols and are following them at all times. For more information about cleaning, sanitising and disinfecting, consult our knowledge base.
Food contamination risks
Being aware of food contamination risks is essential. Wash surfaces and equipment thoroughly, keep food separate and be aware of how you can pose a contamination risk.
Legal Requirements
There are several legal requirements you must adhere to when setting up your catering business:
Apply for a food business registration
The first thing you will need to do when setting up your catering business is to apply for a food business registration. You can apply for this on the government website, and it is free of charge. If you run a food business without registration, you can be fined or receive a prison sentence of up to 2 years. You must apply for the food business registration at least 28 days before you begin trading.
Set up as a sole trader with HMRC
If you are running your catering business as an individual or as a self-employed person, you will need to register as a sole trader. You will have to name your business and keep records of all your income, profits and expenses. You do not have to pay to register as a sole trader.
Food hygiene certification
Food hygiene training is a legal requirement for caterers. Obtaining a food hygiene certificate is the easiest way to prove that you have undertaken food hygiene training.
Liability insurance
Public and Product Liability Insurance protects you against claims for injury or property damage. Injury encompasses illness and food poisoning at an event you catered for. This insurance covers legal costs and compensation payouts if you are sued.
Legal indemnity insurance
This helps to protect you against a claim from a client who is dissatisfied with the service you provided. This insurance can cover legal defence costs and compensation costs.
Planning permission
Depending on how much food you plan to make, you may need to get planning permission. Contact the planning team at your local council to find out whether you have the correct planning permission and building regulations approval.
Positives of Owning a Catering Business from Home
There are multiple benefits to owning a catering business from home:
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- You are your own boss and can work in the comfort of your own home.
- Caterers can have a flexible schedule. You can set your own working hours and choose how often or how little you work.
- You can do something you are passionate about.
- You do not need to undergo any specialist training.
- Starting up a catering business from home can be relatively easy.
- You can choose the size of your business. You can choose to remain a small catering business from home or opt to grow the business.
- You are likely to see client loyalty and receive repeat business or recommendations.
- Catering can be extremely fun and rewarding.
- It is easy to plan and predict your revenue and overall profits.
- It can be easy to link in other industries, such as private parties and weddings.
- You can pick and choose your own clients. You can turn down work or particular clients with no implications.
- There is unlimited income potential.
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Negatives of Owning a Catering Business from Home
Although owning your own mobile ice cream business has many potential benefits, there are some important potential negative aspects you should consider.
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- Start-up costs can be quite high.
- Catering businesses require commitment and can be time-consuming. As you are the boss, all the responsibility falls on you.
- Depending on where you live, there may be a lot of competition, making it more difficult for you to succeed.
- The cost and maintenance of equipment can be quite expensive. You also need to consider the possibility of expensive equipment breaking suddenly and encountering unexpected costs.
- Impacts on the economy can hugely affect the catering industry. As we have seen with the Covid-19 pandemic, industries such as catering can be the first, and worst, industries to be affected. This is completely outside of your control.
- You may be limited to the amount of equipment and stock you can order and store. As you are using your home space, you need to consider this when planning your business.
- There is a potential for cross-contamination or food poisoning.
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Planning Your Catering Business from Home
Planning your business effectively is key to its success.
There are some key steps you should follow when planning your business:
Decide your target market
Deciding what type of catering you aim to deliver is a key consideration. There are many different types of caterers, including:
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- Corporate catering – Corporate catering involves catering for corporate functions. This could include meetings, mixers and other corporate events. Corporate events can be large or small, so keep in mind the size of the event you are capable of catering for.
- Wedding catering – Wedding catering usually incorporates a sit-down meal with a buffet in the evening.
- Social events catering – This could include birthday parties, christenings, funerals, retirement parties and baby showers.
- Food trucks – Food truck catering is growing in popularity. You can have a food truck that parks in high-traffic locations daily. Alternatively, food trucks that are hired for specific events, such as festivals, fairs and weddings, have grown in popularity.
- Buffet catering only – Specialising solely in buffet catering can help to simplify and streamline your business. You can supply a menu of catering options to potential clients who can specify which food they would like. You can choose to supply hot and cold food or only cold food.
- Sit-down catering only – Sit-down catering can be more time-consuming and require more organisation and planning. However, sit-down caterers can usually charge more per person, compared to buffet caterers.
- Dessert catering – This type of catering has grown in popularity in recent years. It has become a trend to provide a variety of desserts or personalised cakes and biscuits at events.
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Plan your equipment requirements
What equipment do you need to start your business? Would it be cheaper to rent the equipment rather than buying it? Is there any equipment you can buy later on, once your business is more established?
Calculate your start-up costs
This can help you figure out whether you can fund the start-up costs yourself or whether you need to consider a business loan.
Develop your catering business plan
This helps to give you a clear plan, aims and actions. A business plan can help you to establish costs, potential profits, your target market and any opportunities or threats you should be aware of. Take a look at our business plan template to help you effectively plan your catering from home business.
Think of a name for your business
Your business name is very important, as it is the first impression customers will have of your catering company and how you will be recognised. Think of your name carefully and run it by friends and family before you register it with the government.
Ensure you have the correct paperwork and have followed all legal requirements
This helps you to avoid any fines or delays in opening your catering business. Consult our list of legal requirements above.
