Do you throw elaborate dinner parties for your friends, complete with multiple rounds of appetizers and perfectly paired after-dinner cheese plates? Do you look forward to minor social events as an opportunity to make little skewers festooned with carefully patterend baby buffalo mozzarella, cherry tomatoes, and fresh basil? Are you constantly being asked to “pitch in” with the cooking at other people’s events or functions? Do you find yourself entering local cooking competitions to try out new recipes and bask in the glory of having the best chili in town, WHILE raising money for muscular dystrophy? If so, you’ve probably considered turning your passion for cooking into a successful business, by launching your own local catering empire.
After all, you’ve probably already got the tools you need: Talent, interest, desire, maybe even a small group of potential customers, and perhaps a well-stocked home kitchen that you just KNOW could be used to mass-produce th
e kinds of food you love for an adoring public. Sooner or later, every serious home cook at least considers diving into the very lucrative and satisfying catering business, by leveraging the tools they already have. Turning these dreams into reality can prove a little more complex, however.
In addition to the cooking (that’s the fun part of running a catering business!) there are also other important considerations, including your plan for marketing your business, the logistics of preparing, delivering, and serving food in larger quantities than you may have done before, the mechanics of managing your accounting effectively, and most importantly, the legal considerations of starting your new business and running it safely and with protections you need.
Should You Incorporate Your Home Catering Business?
While it’s possible to get started in the catering business by legally operating as a sole proprietor, this typically isn’t a good idea, for a few reasons. When you incorporate as a limited liability company or partnership, this legal structure has built-in legal protections to protect you personally from legal liability. The food business can be prone to some legal risk; if you have employees, they may slip and fall, or if someone gets sick after eating food you’ve cooked, you can be held personally responsible for damages as a result of those accidents. Incorporating can protect your personal assets from potentially damaging claims by employees or clients. Talk to a lawyer before you get too far down the road in starting your business, or at the very least, consider an online document filing service for getting your corporate structure in place.
Can You Use Your Existing Home Kitchen for Cooking and Food Prep?
Though regulations vary from state-to-state, you probably won’t be able to use your existing home kitchen for your catering business, while your kids play in the next room and your golden retriever circles hungrily at your feet. While it seems simple enough (cook food in your kitchen, put it in your car, drive it to your event), most state health regulations prohibit this type of operation.
In many states, kitchens used for commercial food production need to conform to the same standards as a restaurant or other commercial kitchen. Where I live in Maine, for example, home caterers can apply with the state to have their home kitchens certified for commercial use, but the set of requirements that must be met is significant: The kitchen must be separated completely from the living space, there must be a separate hand wash sink, and the house’s plumbing and septic must be inspected to ensure they meet health code standards. The kitchen must also have regular health inspections, just like any other commercial kitchen.
Unless you’re planning a drastic remodel, your home kitchen will probably fall short of these standards in a few areas. This doesn’t mean that your dream of a small catering business has to die, however. Many towns and cities offer shared commercial kitchen space, which you can rent by the hour to prepare your food. If you live in a smaller town, check with area restaurants; many of them will be happy to supplement their income by sub-leasing their kitchen space to you and your new business during their off-hours.
What Kind of Catering License or Permit Do You Need?
If it were just as easy as throwing 100 chicken wings in a deep fryer, everyone would have a home catering business. In reality though, there are many more legal hoops that you will need to jump through. Though regulations vary from state-to-state, there are probably several licenses and permits that you will need. You’re probably going to need licensing at the state level, including a business license and tax registration for both employee tax withholding and the payment of sales tax. You’ll probably also need to obtain licensing at the local level for your city or town. You’ll also need certification from your state’s health department, which may also require a separate license or certificate for safe food handling. If you plan to make alcohol available at your catering events, you may need a liquor license. Finally, you may need city or town level permits for specific functions in public spaces, such as parks or at special events.
What Was That Thing You Said About Health Inspections?
Nothing will torpedo your business faster than giving an entire wedding party food poisoning on their big day, which makes food handling and safety a number one priority for any home caterer. Make a phone call to your state’s health department; they will provide you with the full requirements for your state, as well as a schedule of inspections and a list of what the health inspector will be looking for.
Remember that the health inspector works for you. Though they may seem strict and some of their requirements may seem to some to go overboard in their stringency, those regulations are in place to help ensure the safe operation of your business and the safety of your customers. In most locations, the health inspector wants to help you succeed and be safe, and they can help provide a blueprint for doing just that.
What About Insurance?
Remember that the food you are producing will eventually end up inside somebody’s body, and because of that, there are ample opportunities for legal problems. It seems obvious, but it’s worth reminding yourself every once in a while: That Gulf shrimp you painstakingly wrapped in bacon, fire-roasted, and drizzled in chimichurri will eventually be working its way through someone’s digestive system. You need a good general liability insurance policy in place to protect you not just from claims of potential food borne illness, but also from claims ranging from an employee slicing off a finger, to one of your event guests having one too many vodka-cranberries, falling headfirst into the hotel’s water fountain and breaking all of their teeth out of their face. It’s worth the time to find a capable insurance broker who specializes in commercial policies for food businesses, who can help you plan for every potential eventuality and prepare yourself legal for any liabilities.
Launching your own home catering business can be a very lucrative and satisfying way to turn your culinary dreams into a reality, with the ability to control and scale every step of the process. In your excitement to get going, however, don’t skip any of the legal steps required. Establishing a solid legal foundation for your business now will provide the base you need for your business to continue to grow and thrive.