Catering is a business that provides food services at various sites, such as cruise ships, hotels, parks, hospitals, pubs, aircraft, filming studios, event venues, or entertainment sites (wedding parties, celebration parties, birthday parties et al).
The catering industry includes companies that provide individual event-based food services. These companies have equipment and vehicles to prepare food off-site and transport it to events. Examples of events catered by industry establishments include; graduation parties, wedding receptions, business luncheons, and trade shows.
The catering industry in the United States is fast-growing. In terms of revenue, the catering industry will have a market size of $10.6 billion in subsequent years. By 2024, it is anticipated that Texas caterers would generate 874,2 million dollars in income.
Steps on How to Start a Catering Business in Texas
Table of Content
Conduct Market Research
It is important to conduct market research before venturing into the catering business. The first stage in conducting research should be to create a market-based research question that is consistent with your goals and objectives.
You should look for information that will help you maximize your business, and also provide you with data. Seek information that will give you an idea of what your potential market will be looking for in a catering service, and help you run your business with less stress.
a. Who is the Target Market for Catering Business?
- Graduation parties
- Wedding planners
- Business luncheons and trade shows
- Annual general meetings
- Event planners
- Corporate organizations
- House parties
- School events
- Birthday parties
b. Is Catering a Profitable Business in Texas?
Yes, catering is a profitable business in Texas. According to credible statistics, by 2024, it is expected that caterers in the state will earn about 874,2 million dollars.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to the catering business, and they are;
- Corporate Catering
- Wedding Catering
- Social Event Catering
- Concession Catering
d. Who are the Major Competitors?
- Robinette & Company Caterers
- Lush Catering Company
- Eddie Deen & Company Catering
- Macklin’s Catering Co.
- Best Austin Catering Company
- The Root Cellar Catering Co.
- The Heights Catering
- Vestals Catering
- Azalea Catering Company
- Corporate Caterers
- Coburn Catering Services Inc.
- Austin Catering
- Catering with a Twist
- Bernard’s Catering Company
- Texas Custom Catering
- Abby’s Catering
- TCP Catering
- Tastefully Yours Catering
- CoJo Unlimited Catering
- Wendy Krispin Caterer.
e. Are There County or State Regulations or Zoning Laws for Catering Businesses in Texas?
Yes, there are county and state regulations and zoning laws for catering businesses in Texas. Note that the Food and Drug Administration (FDA) sets the federal food code. However, the FDA doesn’t oversee individual catering businesses.
Instead, the various states use the food code as the basis for their business. They may adopt its rules, interpret them differently or set their own. The caterers in Texas are required to obtain a health permit from the Texas Agency of State Health Services (TASHS), your city or county health department, or both.
Your company must have at least one certified food handler from the TASHS. Opening a home-based food business in Texas does not require a permit from the health authority unless a client files a complaint. The health authority is not allowed to interfere with your home-based food business.
f. Is There a Franchise for Catering Business in Texas?
Yes, there are franchise opportunities for catering businesses in Texas, and they are;
- Corporate Caterers
- Apple Spice Box
- Cousins Maine Lobster
- Bayside Lemonade
- Flippers Pizzeria.
g. What Do You Need to Start a Catering Business in Texas?
- A feasibility report
- Business and marketing plans
- Business licenses and permits
- Good commercial kitchen facilities
- EIN (Employer Identification Number)/Federal Tax ID Number
- Suppliers of food ingredients and drinks
- Startup Capital
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a catering business are;
Creative Catering Business Name ideas
- Fort Worth© Home Catering Services, Inc.
- San Marcos® Catering Services, LLC.
- Rita Foods© Caterings Services, Inc.
- Stella Walter® Caterings Services, Inc.
- Del Valle™ Caterings Services, Inc.
- Glee Taste™ Caterings Services, LLC.
- Above All© Caterings Services, LLC.
- Fresh Serve® Caterings Services, Inc.
- Olly Caterers© Caterings Services, Inc.
- This Day© Caterings Services, Inc.
- Chef Rosa® Caterings Services, LLC.
- Golden Fingers™ Caterings Services, LLC.
- Houston Caterers© Caterings Services, Inc.
- Chef McKinney® Caterings Services, Inc.
- Dallas Caterers™ Caterings Services, Inc.
- San Antonio™ Caterings Services, Inc.
- Chef Jacinta© Caterings Services, Inc.
- Chef Silas® Caterings Services, LLC.
- Blue November© Caterings Services, Inc.
- Chef Zara© Caterings Services, Inc.
Register Your Business
a. What Type of Business Structure is Best for Catering in Texas?
There are several options available when it comes to catering companies in Texas, but an LLC is one majority of participants in this industry considered best. The providers will want to form an LLC in order to defend themselves, in case of any lawsuit.
b. Steps to Form an LLC
- Choose a name for your LLC
- File articles of organization
- Choose a registered agent
- Decide on member vs. manager management
- Create an LLC operating agreement
- Comply with other tax and regulatory requirements
- File annual reports.
c. What Type of License is Needed to Open a Catering Business in Texas?
- General business license
- Caterer’s permit
- Health and safety permit
- Food handler’s license
- Health and trade license
- Lift clearance license
- Zonal permit
- Signage permits
- Operational state facility inspections for your kitchen
d. What Type of Certification is Needed to Open a Catering Business in Texas?
- Clean Health Certificate
- Food handler Certification
- Catering Training Certificate
e. What Documents are Needed to Open a Catering Business in Texas?
These are some of the legal documents that are required if you want to open a catering business in Texas;
- Business and Liability Insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
f. Do You Need a Trademark, Copyright, or Patent?
There may not be a need to file for trademark protection or intellectual property protection. The nature of the business makes it possible for you to run the company without needing to take legal action against anyone who uses your intellectual property without your permission.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Catering business in Texas?
You should budget about $65,000 and above to successfully launch a catering business in Texas. Please note that you can start a catering business with less than the amount stated here.
b. What are the Costs Involved in Starting a Catering?
- Business registration fees – $750
- Legal expenses for obtaining licenses and permits – $3,300
- Marketing, branding, and promotions – $2,000
- Business consultant fee – $2,500
- Insurance – $2,400
- Rent/Lease – (If you will be operating from home, ignore this expenditure)
- Operational cost (salaries of employees, payments of bills et al) – $20,000
- Start-up inventory – $5,000
- Catering equipment and wares – $25,000
- Website: $600
- Opening party: $3,000
c. What Factors Determine the Cost of Opening a Catering Business in Texas?
- The size of the catering business
- The choice of location
- The required licenses and permits
- The type of food and services (catering rental services)
- The cost of branding, promotion, and marketing of the catering business
- The cost of the insurance policy covers
- The cost of registering the business
- The cost of the purchase of catering equipment and wares
- Source of your food ingredients, supplies, and ongoing expenses
- The cost of the purchase and customizing of uniforms, shoes, and caps for your employees
- The cost for the grand opening of the catering business
- The cost of training and employing staff.
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
Building a new facility is not required for your restaurant business, but if you have the necessary funding, it will benefit you and also provide you the chance to design a facility that will fit into your business goals.
e. What are the Ongoing Expenses of a Catering Business in Texas?
- Supplies (inventory expenses)
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Transport and logistics
- Salaries of employees
f. What is the Average Salary of your Staff?
- Chief caterer (Owner) – $55,000
- Cooks – $32,000
- Waiters/Waitress – $28,000
- Cleaners – $27,000 Per year
g. How Do You Get Funding to Start a Catering Business in Texas?
- Raising money from personal savings
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
San Antonio© Caterings Services, Inc. is a catering company with its headquarters in San Antonio, Texas. Their goal in launching the company in San Antonio, Texas, is to offer clients wonderful catering services at competitive prices. They will provide catering for celebrations such as picnics, anniversaries, weddings, end-of-the-year parties, birthday parties, corporate gatherings, and other special occasions.
Delivery, rentals, event management, and consulting services are also involved. No matter how much money a client has to spend, San Antonio© Catering Services, Inc. will go beyond to provide value.
- Local food sales
- Intercontinental food sales
- Small chops and snacks
- Catering wares and equipment rentals
c. Mission Statement
Our mission is to establish a standard catering business in Texas that will meet the people’s needs (cooking, event planning, rentals, training, and consultancy services) in San Antonio and neighboring cities in the state.
Our vision is to build a world-class catering company that will become a leader in the industry not just in San Antonio, Texas, but across the United States.
d. Goals and Objectives
The goals and objectives of a catering business are to provide food service at a remote site or a site such as a cruise ship, hotel, park, hospital, pub, aircraft, filming site or studio, event venue, or entertainment site.
e. Organizational Structure
- Chief Caterer (Owner)
a. SWOT Analysis
- Ideal location for a catering business in Texas
- Experienced and qualified caterer
- Availability of different types of delicacies
- Moderately priced menu
- Reliable and efficient inventory management system.
- Financial constraints may restrict the expansion of the business
- A new business that will be competing with well-established catering businesses in the city.
- A rise in the number of people who would want to organize events that will require the services of caterers within our market space.
- Online market, services, technologies, and the opening of new markets.
- The arrival of a new catering business within our market space
- Economic uncertainty
- Liability problems
- The government could change its regulatory status and decide to enforce laws that can strangulate new businesses of this kind.
b. How Do Catering Businesses Make Money?
Catering businesses make money by preparing and serving;
- American food
- Intercontinental food
- Small chops and snacks
- Catering equipment and wares rentals
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
d. Sales and Advertising Strategies
- Introduce your catering business by sending introductory letters alongside your brochure to event planners, park managers, hotels, schools, religious organizations, clubs, corporate organizations, households, and other key stakeholders in the city where your catering business is located.
- Advertise on the internet, blogs, and forums, and also on social media like Twitter, Facebook, and LinkedIn to get your message across, so the social media users or those who read blogs will know who to contact when they need the services of caterers.
- Create a basic website for your business, so as to give it an online presence.
- Directly market your catering.
- Advertise your business in community-based newspapers, local tv, and radio stations.
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Services?
The amount a caterer charges in Texas is based on some factors. On the low end, catering costs per visitor can be around $10; while on the high end, they can be $150 or more. The value of the cuisine, presentation, variety, ingredients, and service determines the prices.
b. How Much Profit Do Catering Owners Make a Year in Texas?
The report shows that on average, catering owners make anywhere from $45,000 to $120,00 and above, annually.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the catering business
- The types of food, snacks, and other services
- The location of the catering business
- The management system of the catering business
- The business approach of the catering business
- The advertising and marketing strategies adopted by the catering business
- The number of years catering is in the business.
d. What is the Profit Margin of a catering service?
The guideline in the catering business is to keep food cost percentages between 28 percent and 32 percent. But rather than being a general rule that applies to all catering businesses, it is more of a recommendation.
e. What is the Sales Forecast?
- First Fiscal Year: $250,000
- Second Fiscal Year: $320,000
- Third Fiscal Year: $450,000
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for Catering Business in Texas?
- The demography of the location as it relates to families and the frequency of parties and events
- The demand for catering services in the location
- The purchasing power of the residents of the location
- Accessibility of the location and the road network
- The number of catering businesses in the location
- The local laws and regulations in the community/state
- Traffic, parking, and security et al.
b. What City is Best to Open a Catering Business in Texas?
- San Antonio, Texas
- Dallas, Texas
- Del Valle, Texas
- Austin, Texas
- San Marcos, Texas
- Arlington, Texas
- Fort Worth, Texas
- McKinney, Texas
- Houston, Texas
- Round Rock, Texas.
c. What Equipment is Needed to Operate a Catering Business in Texas?
Before you can open a catering business, you should purchase the following items; cooking gas, deep freezers, fridges, blenders, serving utensils (plates, ashtrays, glasses, flatware), and drums et al.
When hiring employees for a catering business, you should hire a competent chief, caterers (cooking assistants), waiters/waitresses, and cleaners.
Launch the Business Proper
No catering opens without first planning an opening party to formally launch the business. If you are on a tight budget, you may want to do a soft opening celebration, instead of a grand opening event for everyone in your business location. Or you may want to do both.
The bottom line is that by properly launching your catering business, you will formally let residents of your community know that it is open for services.
a. What Makes a Catering Business in Texas Successful?
- Choose a good location to launch the business
- Make sure you offer a wide variety of foods (give your customers options)
- Throw an open house grand party before officially opening the catering business
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your catering business
- Leverage all available online and offline platforms to promote your catering business in Texas.
b. What Happens During a Typical Day at a Catering Business?
- The catering business is open for the day’s work
- The caterers (cooking assistants) prepare the food and snacks
- Foods are delivered to customers or event venues as requested
- Stocks are taken and reports are written, and submitted to superior officers
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Catering Business in Texas?
- Excellent culinary skills
- Excellent customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Work experience in a catering business environment
- Experience in managing people
- Experience in business administration
- Experience in preparing varieties of delicacies.