business plan for home food business

Food inspectors offer you some pretty sage and, frankly, free advice on how to make sure you’re making a good and reasonable product. Glenford Jameson, Food Lawyer

If your product is complicated or requires additional licensing (meat, fish, and some agricultural products, for example), you may want to consult a lawyer with experience in the food industry. Though the upfront cost may be high for a new business owner, it could avoid even costlier consequences down the road.

However, Glenford says, “with the understanding that there’s this broad, significant regulatory framework,” there are some best practices if you choose to navigate the legal bits on your own:

🚨 Note: Every country and region differs in terms of food laws and licensing requirements, and some industries, like dairy and alcohol, may be subject to additional rules. Be sure to consult with a lawyer and your local government for information specific to your business and region. For the purposes of this article, information and tips will be general, and should not be taken as legal advice.

2. Find your niche

In many cases, the best online business ideas are born out of a passion or a hobby . The same is true for selling food. For example, if you make jams for friends and family from strawberries grown in your own backyard, that’s a good place to start. You already know the process and have had experience honing and testing the recipes.

Bob McClure and his brother Joe grew up making pickles with their grandma Lala, and it was her family recipe that ultimately inspired their business, McClure’s Pickles. An actor and a psychology major, respectively, they didn’t know the first thing about business or manufacturing, but their tried-and-true family recipe was their foundation.

Food trends

Fly by Jing bottled sauce against a foliage background

If you don’t yet have a product idea , look into current food trends for one. The Food Network listed plant-based fish, creative condiments, and coffee alternatives as trending foods for 2022. Other places to watch food trends include Google Trends, food publications, and social media platforms like TikTok.

Jumping on a trend means you’ll likely find plenty of competition out of the gate. Ask yourself how your product can stand out in a noisy market.

When the McClures decided to offer a premium pickled product, they had very little competition. More than a decade later, though, pickling gained popularity alongside the slow food movement. Bob sees the competition as a good thing. “It’s the right type of competition if it’s bringing awareness to highly specialized, quality-driven entrepreneurial products,” he says. “It helps improve our entire category.”

More food business ideas

A hand pours a can of Juneshine into a glass. Fruits are arranged around the glass on a yellow background

Another way to discover a great idea is to find a gap in the market. Many profitable food business ideas start with solving a problem or filling the needs of a niche market.

Jodi Bager’s business, Grain Zero , was designed to help her manage ulcerative colitis, and her audience is made up of people also living with colitis and other forms of bowel disease. She produces healthy snack options without the ingredients that commonly trigger her condition. “We also address the needs of the growing paleo community,” Jodi says, “and we’re appealing to a wider audience than ever before.”

Ideas for beginners

If you’re new to food, look into easy small business ideas that require a low investment, minimal equipment, and fewer shipping challenges and legal restrictions.

Thirteen-year-old Charlie Cabdish makes and sells candied pecans from his family’s home. It’s a business he can still run from a domestic kitchen—between school work and basketball practice—nearly five years after launch.

Market research

If you have an idea already, test its viability. Is there a market for this product? If it’s a saturated market, how can your product differ? Is there an untapped niche or underserved customer?

Your market research should include looking into the rules that govern the specific industry. Is selling your product online and shipping it even possible? Here are a few questions to ask:

3. Decide on a business model: produced vs. curated

Various high end grocery products are arranged on a plain surface

There are many ways to start a business in the food industry from supplying raw ingredients to manufacturers to opening your own restaurant, but if you want to sell food online, there are two main business models.

Producing food products to sell

This business model refers to producing food in either a home-based business or commercial facility and selling it direct to consumers (DTC). You may choose to handle the full supply chain and be personally involved in production or work with a third-party manufacturer that produces and packages a recipe to your specifications. In this model, you may also expand your selling channels and consider wholesaling to other shops.

Legal note: Many regions have cottage food laws that allow you to produce certain food items in a domestic kitchen without meeting the same requirements as commercial kitchens. In the US, be sure to look into each state’s cottage food laws, as they can differ by region.

Curating and reselling food

This model involves reselling by curating other brands’ products under your own banner. Your unique selling proposition (USP) may be that your shop brings the best of a single product type (say, mustards from around the world) to a single shopping experience. Otherwise, you may try dropshipping to bring another brand’s products to a new market.

Note: Much of this article applies to food production businesses. If you’re looking to curate existing food products, skip ahead to step 6 to start building your brand.

4. Source ingredients

Star anise and cinnamon arranged in a pattern

Glenford stresses the importance of doing your homework when sourcing your ingredients. “Trace the supply chain,” he says, so that your packaging claims match what’s inside and you’re working with trustworthy companies.

If you plan to produce a product that will be labeled organic, for example, be sure your raw ingredient supplier has the proper certification before making claims on your packaging. Developing a relationship with your supplier improves trust and makes them feel a vested interest in your business. “Sometimes our suppliers make suggestions based on something new that comes to market,” says Jodi. “It’s a collaborative partnership.”

🗒️ Helpful resources:

5. Determine your food production model

A storefront with a sign that reads "Kitchen Collective"

Though McClure’s Pickles started in their family kitchen, the family continuously upgraded their production. “When we were first starting out, we rented a kitchen that had a larger stove,” says Bob, “and we would call up our friends and say, ‘Hey, I’ll buy you pizza and beer if you come make pickles with me on the weekend.’”

The company eventually landed in a 20,000-square-foot factory space where they still operate today. McClure’s serves as a great example of how to scale production as you grow. Starting from a home-based facility is a low-risk way to test your business model.

Selling food from home

Some food items can legally be produced and sold right from your domestic kitchen, but look into the regulations surrounding your chosen product. In the US, the FDA requires you register your home-based business as a facility . You may need to make upgrades to your home setup, such as improved ventilation. Be sure you secure the required license to sell food from home in your region.

Renting from shared commercial kitchens

Many facilities offer shared or co-op kitchen space that you can rent hourly or monthly, depending on your production needs. The benefits are:

Setting up your own commercial facility

Have full autonomy and start from scratch with this model, building a facility that meets your needs from the start. This is the most expensive option and one that requires due diligence—you are responsible for ensuring your facility meets code and is properly licensed.

This may not be the best option for new entrepreneurs, but rather a future goal. “We started small in our home kitchen and then grew from there,” says Jodi. “We did not move out until we were bursting at the seams and knew we had a big enough business to support the move.”

It is really impressive how much diligence goes into running a USDA-inspected facility. Daniel Patricio, Founder, Bull & Cleaver

Working with an existing manufacturer

This option is great for hands-off entrepreneurs who are more interested in the business than the production. It’s a safe option for industry newbies, too, as the manufacturers should already be versed in food safety and regulations. While the idea, recipe, and brand are all yours, the execution is left to the pros. This gives you more time to invest in other aspects of the business.

“We partnered up with someone that had a USDA-inspected facility so that we could ship across the US sooner, without any food safety issues,” says Bull & Cleaver founder Daniel Patricio. “It is really impressive how much diligence goes into running a USDA-inspected facility.”

6. Build your brand

Oat Haus products styled with other foods against a purple curtain

Selling food online is especially challenging because the most important decision-making sense—taste—can’t be accessed. Because customers can’t sample your product, branding is especially important. Package design, photography, website, product page, and copy need to work together to tell your story and help customers imagine how your product might taste.

💡 Tip: Because packaging is extremely critical in this industry, consider hiring a designer to help with your needs.

Building a brand starts with answering a few questions about how you want customers and the world to perceive it. “We chose our name and our identity—everything from the label, the look, the feel, the text—to be something that connotes handmade and family, yet urban,” says Bob.

A screen grab of Diaspora Co's About Us page

To get started explore more in depth branding resources:

🛠️ Free tools: Stuck on your brand name? Try our free business name generator and domain name generator . If you already have a great name for your brand, turn it into a professional logo with Hatchful .

Packaging and labeling laws

Front and back views of a bag of Pulp Pantry chips

Aside from the visual appeal of your packaging, each country has its own labeling requirements, which may include best-before dates, nutritional information, allergen warnings, and country of origin. If you plan to ship your product across borders, especially to retailers, be sure to check the destination country’s rules around labeling.

7. Run the numbers

How much does it really cost to start a food business ? If you were to open a restaurant or physical food store, your upfront costs could be upward of $200,000 . But there are many ways to get started with much smaller startup costs.

Small-batch producers who start home-based businesses have far less overhead and can expand into commercial spaces later as the business grows.

Without expensive leases or staffing costs, you could realistically start selling food online with just a few hundred dollars to cover ingredients, website and marketing costs, and packaging.

💡Tip: You may be able to claim some of your housing and utility costs at tax time if your living space doubles as your business space.

If it’s not possible to run your business from home, consider the monthly cost of a commercial facility when calculating your startup costs. Production facilities can be expensive, but many co-ops and incubators offer shared kitchens to entrepreneurs for a fraction of what you’d spend in a dedicated space.

8. Price your food products

Most entrepreneurs, regardless of the product they sell, will agree: pricing is hard. Ultimately there’s no one pricing formula that will work for everyone. Know your costs (both fixed and variable), and keep adjusting until you get it right.

Daniel suggests forgoing profit at first to get your product in front of as many customers as possible. “Over time, those cost savings will come,” he says.

A Bull & Cleaver product bag arranged with biltong and other foods

Bob has a different philosophy: if you believe in the value of your product, price it accordingly. He stands by McClure’s pricing. “We’re not the cheapest product out there,” he says, “so we have to compete on something that’s truly unique, otherwise you just become one of the other commodities. And then it’s a race to the bottom.”

Profit margins for food businesses also depend on many factors—what you’re selling or how and where you’re selling it, for example. Restaurant margins are usually less than 10%, while meal-kit services may have margins of up to 40% .

📚 Additional Reading:

9. Set up inventory management

Grain Zero’s brand is built on products that contain natural ingredients and no preservatives. The shelf life on most of the company’s products is only five to six months. Jodi, therefore, keeps inventory tight, turning it over every one to two weeks.

While McClure’s Pickles have a longer shelf life, Bob wants to be sure customers get his product while they’re as fresh as possible. For that reason, the company’s inventory strategy errs on the side of producing too little of the product, rather than too much.

“It’s a juggling act, and we’re always getting better with forecasting our needs,” he says. “We have to make so much to justify a production run, while also ensuring there’s a sales channel or outlet and enough demand behind it to really make it work.”

10. Plan for growth and product development

A jar of McClure's bloody mary mix, a mixed drink, and a beer are arranged on a wooden board

The McClures found success by focusing on their brand’s namesake product, perfecting and iterating on their grandmother’s recipe.

Low-risk ideas came next. Tried and true pickle flavors, for example, were applied to other products, like chips. By popular demand, their Bloody Mary mix followed.

Initially, the McClures expansion moves were made in response to customer feedback. Since then, however, product development has become more sophisticated, and the family relies on data to inform their next move.

You have to make sure that there’s enough critical mass behind the idea before you take that into a product launch. Bob McClure, founder, McClure's Pickles

While the family still loves engaging with customers and hearing their ideas, Bob warns to take them with a grain of salt. “Not all ideas are like gold,” he says. “You have to make sure that there’s enough critical mass behind the idea before you take that into a product launch.”

Expanding to food-adjacent products

Dominion City Brewing Co. sells its beer locally via its online store, but liquor laws prevent it from selling beyond Ontario’s borders. Fans of the brand who live outside the province can still shop for branded merchandise that they sell online, like glassware and clothing.

Back view of a Dominion City Brewing Company sweatshirt

For your food brand, consider complementary items to extend your reach beyond your local market, increase average order value , and build brand awareness:

When Wil Yeung hit his stride on YouTube, amassing thousands of followers on his vegan cooking channel, he was ready to monetize. Now, Wil sells cooking classes, e-cookbooks, and physical cookbooks through his own online store.

11. Set up shipping

A person adds custom paper tape to a shipping box. The tape reads "Spaghetaboutit"

We’ve spent a lot of time building resources to help ecommerce entrepreneurs streamline their shipping processes . It is, after all, one of the most common pain points for business owners.

And, no surprise: shipping food carries additional challenges, especially when shipping outside of the country. “When you’re exporting food, there are a series of foods whose export is regulated under commodity legislation,” says Glenford. “Those have their own rules.” Look into whether your product is subject to specific laws in the countries where you’re shipping to—and from.

Consider, as well, the potential restrictions on your product in its destination country. Technically, once products are in the shipping stream, they become the problem of the purchaser, but a poor customer service experience can be bad for business. Mitigate the customer’s ultimate frustration by versing yourself on the laws where you ship.

For example, a cannabis-infused product may be legal in Canada where you produce, but may not be in many US states.

Alternatively, to avoid the red tape, you may consider working with a fulfillment service if you do most of your business across the border. “We found the cost of shipping individual orders to the US was prohibitive,” says Jodi. “For that reason, we ship bulk orders to the US where they are warehoused and shipped directly out to US customers.”

Packing and shipping fragile or perishable items

A pink box reads "Quele Chose." Colorful macarons are lined up in front of it

Many food items are fragile or are packaged in fragile packaging. As such, they may require extra shipping materials to offer enough protection from breakage. Factor in the extra cost of materials, shipping weight, and staffing time when setting your shipping and handling rates.

Products requiring refrigeration aren’t ideal for cross-border shipping, but Vegan Supply in Vancouver successfully ships its cold products nationally across Canada using cold packs and expedited shipping . You can also work with carriers that use refrigerated vehicles, or opt to only ship and deliver locally.

Order pickup and local delivery

If you’re selling an item that simply cannot be shipped by post (say, cupcakes slathered in fluffy icing), consider alternatives that still allow you to sell food online. Offer online options to customers who preorder your product: in-store pickup or local delivery.

At the start of the pandemic, many retail stores pivoted to selling food online and set up contactless curbside pickup in lieu of in-store shopping. In response to these challenges, we’ve put together a comprehensive guide to help you set up these delivery methods for your store, too.

Launch your own food business and try Shopify free

12. choose your sales channels .

The best way to start a food business is to sell online through your own website. This method gives you full control over your brand and ownership of your customer list. Reaching your target audience is a bit trickier with an online store than with a marketplace, so you may wish to explore other sales channels as you grow.

Building a website

As with branding and packaging, the look and feel of your website is important in helping influence the customer to buy a food product without tasting it first. In some cases, it may also be a visitor’s first impression of your brand.

Website content

Use product page copy to describe your product’s taste and texture in detail. Online product descriptions should include ingredient and allergy information in full. Product photography is also important here (we’ll talk about this in more detail later). Also consider including on your product page: customer reviews, user-generated content (UGC), and recipes that include the product.

To keep the product page uncluttered, invest time in a thorough FAQ page to answer additional questions about ingredients, dietary information, and production methods.

Even if your website isn’t supplying the bulk of your sales, it’s important to nurture it as a tool to connect with customers and tell your story. “We’re in 5,000 stores worldwide,” says Bob, “but we still have a core group of people that come to our website, purchase every year, like to see what we’re doing, and get connected to our brand, our story.”

Nutrition information on Surreals' website

🍔 Operating a restaurant? You can still sell online with Shopify. Try our online ordering system to help you expand take-out orders and spend more time doing what you do best: making delicious food.

Website building and design

A collection page on Acid League's website

Building a website from scratch may be a daunting idea, especially if your talents lie in cooking, not coding. Good news: you don’t have to. With many ecommerce platforms, like Shopify, you can set up a site quickly, with no technical experience necessary.

Choose from a set of standard website templates in the Shopify Themes Store then customize it with your brand colors, logo, and copy.

A few of our favorite themes for online food businesses include:

💡Tip: If site design isn’t your strength, hire a Shopify expert to help tweak your chosen theme or build custom features.

Food photography

Close up of chopsticks picking up green noodles

You can opt to DIY your photoshoots or hire a professional who has experience with styling and lighting food. Food photography can be especially tricky due to capturing natural-looking color and glare from reflective surfaces (say, package jars or glossy sauces).

For product pages, shoot food product photos against a clean background. These should include packaging from several angles and close-up details of the product to show texture and color.

A hand with fancy jewelry holds a bunch of cucumber pickles

Lifestyle photography can be used on the homepage, in marketing campaigns, and in recipe content. Photos of your food products used in recipes or paired with other foods help your customer see how your product can be used in their own cooking or entertaining.

Retail and wholesale

Two people working inside an independent cafe

McClure’s initially grew its business through retail partnerships. Success with that channel relied on seeing retailers as partners in the business and inviting them to care about the company mission. “Some of our retail partners take on more familial partnerships. We’ll work with them to do menu pairings or specific events that focus around our products and theirs,” says Bob.

🗒️ Resources for finding retail partners:

Other sales channels

Many brands expand their sales channels to reach even wider audiences when selling food. If you don’t plan to open a retail store, there are other offline opportunities. Online marketplaces are another option for your business. You can sync your Amazon or Etsy shop with your Shopify store to make inventory across channels seamless.

13. Market your food business

Marketing is one of the most important aspects of running a business. It will be one of the biggest learning curves for new entrepreneurs when starting a food business. In the case of selling food online, connecting your customers to your story is extremely important. If they can’t taste your food, you’ll need to appeal to their other senses.

Your online store is a great place to start. Investing in search engine optimization (SEO) can help your store rank in search engines for relevant terms your target audience is searching for.

Content and social marketing

McClure’s dedicates a significant percentage of its site to community—extra content, recipes (its own and customer generated), and prominent social calls to action. Social media is very important to the brand. “That’s where our core consumer goes,” says Bob. “We want to be engaged with our community because they’re the influencers. Word of mouth can take your brand extremely, extremely far, as we’ve seen.”

Side by side recipes from McClure's Pickles website

Offline marketing

Due to the nature of your product, it’s important to take your brand to the streets—and to the mouths of your potential customers:

Other marketing ideas for food brands

Building a successful online food business relies on a consistent effort to drive customers to your ecommerce store. As algorithms change and new social platforms emerge, it’s especially important to build your own customer lists. Incentivize signing up to your email newsletter or creating a customer account. Offer discounts or membership perks in exchange for an email address.

Other marketing tactics to attract customers:

No more half-baked business ideas

Selling food online today has never been easier. As direct-to-consumer (DTC) food businesses become increasingly popular and new ecommerce technology emerges every day, now is the time to go for it. Build your dream and turn your love of cooking into a profitable business.

Over a decade after its launch, McClure’s employs dozens of people who make and ship its product to thousands of consumers and retail partners around the world. Though Bob can’t confidently say he has it all figured out, his journey has been a rewarding one.

“Some challenges are big enough to break you,” he says, “but how you use them as a learning experience in the future is what really makes for a great ongoing success story. If we don’t learn from what we do as entrepreneurs, we don’t truly grow.”

Feature illustration by Pete Ryan

Selling food online FAQ

Can you make food at home and sell it.

You can make food at home and sell it online or in-person. Certain countries and states have specific cottage food laws that govern the production of food like baked goods in domestic kitchens. You can run an online food business while also selling at local farmers markets.

What is the cheapest food business to start?

he most cost-effective way to start a food business is to make your products at home and sell them online. This model allows you to bootstrap your food business and grow it slowly.

How do you price food for sale?

hen pricing any product, a simple formula is to add up your variable costs plus your fixed costs plus profit margin. It’s also important to keep in mind who your consumer is and what they’re willing to pay for the food you’re offering. Compare your products to other successful online food businesses and use the average pricing in the market as a benchmark.

How can I sell food on the internet?

To sell food on the internet, first determine what kind of food you want to sell and your production model. Next comes branding, setting up shipping, building an ecommerce site and considering other sales channels like online marketplaces.

About the author

Dayna Winter

Dayna Winter is a Lead Writer at Shopify, telling stories about the humans behind brands and the moments that motivate them to create. On the side, she resells vintage, runs a film-themed vacation rental, and is working on her green thumb.

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Home-Based Food Businesses: Getting Started and Scaling Up

2020 has been a turbulent and unsettling year but with lockdown forcing us to take a breather, it has also has been the prime time for self-reflection and development. With many finding comfort in the kitchen during these uncertain times, cooking skills have sharpened and for some, a hobby has turned into a career!

In addition to new food businesses blossoming, some catering and hospitality workers have changed their business model by transforming their own kitchen into a delivery kitchen , allowing them to operate food delivery businesses from home.

Starting a business can be daunting and overwhelming (even from the comfort of your own home); t here is a lot to consider and do before you even start producing food from home . We’ve covered all the essentials needed for starting a home-based food business and tips for scaling up.

Benefits of Setting up a Food Business from Home

Starting a Food Business: Checklist

Construct a business plan.

First things first; create a business plan. Having a business plan helps you set achievable goals and milestones and is proven to help your business grow 30% faster. I t makes you think about what you want your business to be, where you see it going, and what you want to achieve from it. It will help you set out your objectives for your home-based food business. It will also help you to prioritise your next steps:

Register your Business

Once you have a working business plan, the next steps are as follows:

A food business is categorised as preparing , cooking, storing, handling, distributing, supplying or selling food. The below businesses require a licence to become a part of the food industry:

Getting your Food Establishment Ready for Approval

Food hygiene.

Good food hygiene in the kitchen is essential; it ensures that the food you serve meets food health and safety rules and regulations and hygiene standards . The Food Hygiene Rating Scheme gives businesses a rating out of 5 so that consumers can make informed decisions about where they buy their food.

Ratings are a reflection of the standard of food hygiene found at the time of inspection from an environmental health officer . As a business, it is your responsibility to comply with food hygiene laws at all times to ensure food is always safe to eat.

This includes:

General Food Law

Before you begin trading, you should brush up on the General Food Law requirements you’ll have to abide by as a professional caterer. The Food Standards Agency has a guide that covers the following areas:

Scaling Up Your Food business

First step: find the perfect kitchen space.

Scalability describes the ability of your business to grow when production increases, without being held back by available resources. Acquiring a professional kitchen is the biggest leap a home food business will take. Your business has grown and evolved and now requires a long-term and sustainable business plan. Buying a food production space is very costly for small businesses or startups and isn’t always achievable. The answer to cutting costs and reducing your overheads: renting a commercial kitchen .

Choose Suppliers

To ensure your suppliers are the correct fit for your business, visit trade shows or exhibitions to help you decide on the best and most cost-effective manufacturers. It’s also a great opportunity to network.

Acquire your Kitchen Equipment

Safety, workflow and space efficiency should all be taken into consideration when acquiring the necessary kitchen appliances . A commercial kitchen requires industrial-grade equipment that can withstand the wear and tear of heavy-duty use.

Invest in Technology

Technology makes it easier and less expensive to scale a business. You can grow quickly and efficiently at a lower cost by investing in the right Customer Relationship Management (CRM) software, digital marketing tools and Point of Sale (POS) systems. Evaluate not only software but also networks and hardware such as servers and computers.

Create a Marketing Strategy

Marketing is the heart of every successful business; it’s the first step in creating awareness about your brand.

4 great tips to market your business;

At Dephna, we offer flexible commercial kitchen spaces with 24-hour access and commission-free deliveries. If you’re looking to scale up your home-based food business and are interested in renting one of our commercial kitchens, dark kitchens or modular cold rooms , book a visit to one of our prime London kitchen locations now.

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The Complete Guide to Starting a Home-Based Catering Business

Blog > Food Entrepreneurship > The Complete Guide to Starting a Home-Based Catering Business

With lower startup costs than a restaurant and the ability to determine your own hours and dishes, a home-based catering business can be an exciting entry into culinary entrepreneurship!

With no brick-and-mortar, “customer-facing” space needed, starting a catering business from home can be more affordable, and a great way to either supplement your full-time income or replace it entirely.

Still, this is a big undertaking. However, you can follow this step-by-step guide to get your home-based catering business off the ground, and start wowing clients with your delicious food!

On-site vs. off-site catering.

Home-Based Catering Laws

Start Looking at the Numbers

Create your business entity, craft your menu, assess your equipment.

Hire and Train Your Staff

Collect reviews and testimonials.

Catering services are generally split into two categories—on-site and off-site. With on-site catering, the food is cooked and completed at the event location, like a wedding venue or hotel. With off-site catering, food is cooked somewhere else and then brought to the event location. This is often the case with catered business lunches and private parties.

As a home-based caterer, you may have the option to work either of these methods into your business. You could do the prep work at home, and bring everything to the event location for the final cooking and plating. Or you could do all the cooking from your home kitchen, and deliver the completed dishes to the venue.

The method you choose could be influenced by your city and state catering regulations, so make sure to do your research before determining your business model.

The Essential Culinary Career Guide

What's your ideal culinary career: Fine dining? Your own restaurant? Pastry? Get our self-evaluation guide to find out!

We’ve compiled a checklist of all of the essential questions into one handy guide: career options, culinary interest surveys, educational opportunities, and more.

Clicking the "Get the Guide Now" button constitutes your express written consent to be contacted via phone, text, and/or emails by Auguste Escoffier School of Culinary Arts at the number(s)/email you provided, regarding furthering your education. You understand that these calls may be generated using an automated technology. You can unsubscribe at any time or request removal of street address, phone number, email address via Escoffier website.

Know Home-Based Catering Laws

Before you file any paperwork or spend a dollar to establish your business entity, you need to know what is possible (and legal) in your area.

Does your city/county/state even allow for catering out of your home? And if so, does your kitchen meet the health department guidelines? These rules may require extra ventilation, a three-compartment sink, and non-permeable surfaces, like stainless steel countertops. Rules vary from state to state and city to city, so make sure to get the specific details for your region!

You may find that while you can operate the business side of your catering operation from home, you’ll still need a commercial kitchen rental where you can do the actual cooking for off-site catering. You may have to rent a shared commercial kitchen, or you may be able to cut costs by operating out of a kitchen at a local church, restaurant, or community center. Get creative!

Chef plating white dishes with tomatoes and feta cheese

There are two factors to a business’ profitability—income and expenses. Before you jump into your new venture, start sketching your financial outlook and making some projections so you build a profitable business.

What Will It Cost to Open Your Doors?

There are costs associated with every business—your job is to figure out how much you’ll need to spend starting and operating your catering business at home. Additionally, you should calculate your income to determine how long it will take to recoup those startup costs.

Keeping your expenses low at the beginning can help you become profitable sooner. Instead of buying all new equipment and serving dishes, what can you find second-hand or borrow? Can you purchase and store ingredients in bulk to save some money?

After you figure out your startup expenses, think about how you’ll pay for them. Will you be able to cover these startup costs out of your personal bank account, or do you need to seek a small business loan or grant? Even if you don’t need outside funds right away, you may want to secure a loan just to cover any possible emergencies that may occur as you get up and running. Unexpected expenses crop up, like higher food prices or broken equipment that needs repair.

Remember to factor in the cost of a rented kitchen space if you need one!

Smiling Caterer Delivering Tray Of Sandwiches To House

How Much Can You Expect to Bring In?

How many events can you reasonably cater per year? And how large do you plan for those events to be? This is a vital part of your planning process and goes to the very heart of your home catering business.

It’s not all about how many events you can do—it’s about how many you want to do. Flexibility is part of the appeal of this business model, so it’s up to you to decide what you want your business to look like.

Is this going to be a full-time venture with a team that serves large weddings and corporate events? In that case, you want every weekend to be booked.

Or do you envision it as a supplemental business to your full-time job, or a fun money-making hobby? If that’s what you envision, you may only plan to do one small, high-end dinner party per month, focusing on personalized service and top-shelf ingredients.

Do you plan to be a company of one? This will limit the size of the event you can manage, but it also reduces your expenses.

These factors determine how much income you can make per year. Build out a rough calculation of the amount you can expect to make versus your anticipated expenses to make sure there’s room for profitability.

If financial planning seems a bit daunting, Escoffier’s Online Food Entrepreneurship program can help you grasp the culinary math fundamentals to start a food business, such as money management, purchasing, receiving, menu pricing, inventory, and more!

Group of people smiling and talking at a dinner party

Name Your Home-Based Catering Business

Time to brainstorm some names!

Check with your Secretary of State (if you’re in the U.S.) to make sure that the name hasn’t already been registered. It’s also a good idea to do a web search of the name to make sure there are no catering businesses that already hold that name. Remember, you want to make it easy for people to find and remember you.

Plus, putting in a little research upfront can allow you to avoid confusion or legal troubles from a similarly-named company.

Build Your Business Structure

Consult with an attorney and/or tax professional to decide what the best business structure for your company will be.

A sole proprietorship is the easiest to create, but it doesn’t keep your personal and business assets separate. A limited liability company will protect your personal assets from business debts or liability, but it is a little more complicated to set up. If you’d like help with setting up your business, consider contacting a local small business center.

Once you’ve established your business name and structure, you can register for an Employer Identification Number (EIN) with the IRS.

Set Up Your Business Banking

Keep your personal funds and business funds separate, so you can accurately track your profit and expenses. This will also make paying your taxes much easier at the end of the year!

Get Any Required Licenses and Permits

Each state, county, and city will have its own requirements for permitting and licensing. To start, you’ll probably need a business license. Contact the Small Business Administration (SBA) to get guidance on the rules in your local area.

If your state allows you to cater from your home kitchen, you may need an annual health inspection from the local health department. You may need a food handler’s or food manager’s license as well.

And if you plan to sell alcohol as part of your catering services, you’ll likely need a liquor license to stay in compliance.

Long story short: be diligent in your permits and licenses! An error here could lead to financial or even legal trouble down the road.

Person using a laptop while also holding their phone

Get Liability Insurance

Even if you take proper precautions, any time you cook for others there is some element of risk. If someone gets ill from eating something you cooked—even if it’s not your fault—you may face liability. Liability coverage can protect you and your business if something unfortunate happens. A specialty insurance provider like the Food Liability Insurance Program may be a good fit for this type of business.

You may also need to update your homeowner’s insurance since you’re running your business out of your home. Contact your insurance company for details.

Now that all the paperwork is out of the way (for now), let’s talk food!

Caterers may choose numerous specialties, from regional cuisine to farm-to-table to plant-based catering. Choosing a specialty in your menu plan reduces your pool of possible clients, but it also makes it easier for you to stand out and market directly to your ideal customer. After all, if I’m a client who wants to serve guests a gluten-free, vegan meal, I’m probably more likely to hire the gluten-free vegan caterer than a “jack of all trades.”

“The most valuable part of my Escoffier education has been the knowledge I gained from all of the Chefs. Each one had a different take on things. It was a great experience.”* Kathy Gadison, Escoffier Culinary Arts Graduate

To avoid reinventing the wheel for every event, you can opt to offer a set number of dishes that customers can pick from. You may also want to establish “tiers” in your menu, with each tier having a different per-person cost. This gives your customers flexibility in choosing their dishes while still working with their budgets.

When pricing your menu, consider your food costs , labor costs, and additional overhead (insurance, kitchen rental space) to make sure you can cover all of your expenses and still have some profit left over from each event.

Also, consider your service method when designing your menu. If you’re only offering buffet-style catering, you may want to avoid dishes that rely on exquisite presentation or need refrigeration. Finally, think about on-site vs. off-site delivery. Food that you plan to deliver from your home kitchen to the venue must maintain quality through the transport and setup process.

Escoffier’s Online Food Entrepreneurship program curriculum also examines the various aspects of menu design and management, including how to use home-based catering menus as a strategic financial tool.

Mini sandwiches and bread on a plate in front of flowers

What do you have, and what do you need?

If you offer baked goods on your menu, for example, you may need a second stand mixer or multiple ovens. A dedicated catering refrigerator can give you extra cold storage, plus make it easier to keep your catering supplies safe from hungry family members if you’re cooking at home.

You may also need chafing dishes and Sternos to keep food hot when it reaches its destination, plus serving utensils and dishes.

When you have all these extra items, where will you keep them? If you have a large garage or storage shed, that can work. But you may need to rent a storage unit nearby to keep these things out of your home or rental kitchen space.

Start Building Relationships with Vendors

As a catering business owner, you have access to wholesale food suppliers that can supply you with bulk ingredients at better prices. They may also be able to help you source specific ingredients, which is valuable if you’re in a specialty market.

Event planner using checklist while examining delivery of crockery and decorations while movers unpack boxes

Start communicating with vendors early to get an idea for who has the best prices, quickest delivery times, and most responsive customer service. And if you’d like to source ingredients from local farmers and small food producers, start reaching out early to build relationships.

When it comes to sourcing, think beyond the food. If you can source linens, flatware, and plates as part of your service, you can both charge a higher rate and provide a useful service to your clients. So strive to develop relationships with rental vendors as well.

Start Marketing Your Home-Based Catering Business

How will you get the word out? If you plan to cater to an older crowd, you may want to go with traditional marketing methods, like taking an ad out in a local publication. If your ideal customers are younger and tech-savvy, social media is probably a better place to focus your efforts. Focus on high-end photography.

You’ll also need a website. A website makes you “findable” online, and it can be your home base to display menus, testimonials, photos, and pricing. It’s also where you can share your story and credentials, like your Food Entrepreneurship degree or diploma , and what is special about your cuisine.

“For me, having access to the school online means it is now possible to receive the culinary education I have desired, while still being able to grow my business and take care of my family, without even having to leave our valley. It is awesome that in my lifetime, we have developed the technology making this educational venture even an option. I am grateful for the opportunity, to say the least.”* Kirsten Douglas, Online Culinary Arts Graduate, Owner & Catering Chef at The Main Event

If you’re catering small events, you may be able to handle them on your own. But as events get larger, they often grow in complexity.

Even if you can handle all the cooking on your own, who is going to serve it? Two or three people may be enough to keep a buffet well-stocked, but if you plan to do seated meals, you’ll need more staff to prevent slow service and cold food.

If you’re an Escoffier graduate, you may be able to find some team members among your fellow alumni through the Escoffier Alumni Association !

Smiling chef cutting carrots and other vegetables on a white cutting board in a kitchen

One of your best sources for new clients will be old clients. Along with relying on word of mouth, encourage past customers to leave positive reviews and testimonials you can share.

Some bookkeeping software has this function built in. After you send the final invoice and the client pays it, the software can send out an automated email with a link to your review platform of choice.

Celebrate Major Moments Through Food

Starting a catering business at home can be flexible and rewarding! You have the opportunity to make rewarding connections with interesting people and help them to celebrate life’s big events through food. But it can also be challenging and demanding.

Education can be a great way to prepare you for starting a catering business. Escoffier’s Online Food Entrepreneurship programs include core culinary principles, marketing concepts, and business planning methods that may help demystify some of the important concepts of entrepreneurship and set you up for success. And with online culinary school , you may even be able to complete your program while you start your catering business. To take the next step in your entrepreneurial journey, contact us today to get started!

Interested in learning more about culinary entrepreneurship? Try these articles next:

How to Start a Bakery Business From Home

This article was originally published on June 11, 2021, and has since been updated.

*Information may not reflect every student’s experience. Results and outcomes may be based on several factors, such as geographical region or previous experience.

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