How to start a catering business from a restaurant kitchen: licenses, deposits and pricing

The office down the street has asked twice whether you can do lunch for 60. You have the kitchen and the team; what you lack is a price per head, a deposit policy, the right permit for food that leaves the building, and a way to bill a company that pays in 30 days.

To start a catering business from a restaurant kitchen, confirm with your health department that your permit covers off-site service (or add a catering permit), extend your insurance to off-site events and vehicles, price each job per guest from costed recipes plus staff, delivery and rentals, take a deposit that covers your committed costs, and invoice business clients on agreed terms. Most caterers are small: 55% of US caterers with employees had fewer than five in 2023. Last checked: 5 November 2026.

Is catering a good business to add to a restaurant?

It can be, because it uses a kitchen you already pay for at hours it would sit idle. The market is crowded at the small end and thin in many places. Our analysis of the Census Bureau's County Business Patterns (caterers, NAICS 722320):

The number of caterers grew 7% while their workforce shrank 7%: more, smaller businesses. Payroll per employee is low, which fits work that is mostly part-time and booked event by event. On top of these, the Census Bureau's Nonemployer Statistics counted 406,608 one-person businesses in special food services (caterers, mobile food and food service contractors together) in 2024, up from 248,256 in 2019, and 77% had receipts under $25,000 a year. Many caterers are side businesses.

Density varies by state. Per 100,000 people (Census 2023 population estimates), Vermont has 7.4 caterers, the District of Columbia 7.1, New York 6.5 and Massachusetts 6.2; Arkansas has 1.4, West Virginia 1.6 and Alabama 1.7. Few caterers can mean an opening or thin corporate demand. Ask the offices near you who caters their lunches now.

What licenses do you need to start a catering business?

The rules are local, so start with your county or city health department. From an existing restaurant, the questions are narrower than for a new business:

Alcohol is where restaurants get caught. Many licenses cover only the licensed premises. New York's State Liquor Authority, for example, keeps off-site catering as its own category. Its active license data on 5 November 2026 listed 806 licenses described as "Catering Establishment", for premises that host functions, and only 39 as "Off Premises Caterer Establishment". Ask your state agency which license, if any, lets you pour at someone else's venue.

A home kitchen is not a shortcut. State cottage food laws generally cover lower-risk foods sold directly to customers, not hot food for events. If you are starting without a restaurant, you will need a licensed commercial kitchen; the permit stack is similar to the one in our food truck licenses guide. Check with your health department for your situation.

How do you keep catered food safe off-site?

Your health department will hold you to its version of the FDA Food Code, which keeps hot food at 135°F or above and cold food at 41°F or below. The Food Code also lets food be held without temperature control for up to 4 hours under written procedures, which many caterers use for buffets. Build your kit and your timing around those numbers:

• Hold: insulated carriers, chafing dishes with fuel, ice baths or cold wells, and a probe thermometer for every event.
• Log: temperature when the food leaves, on arrival and every hour on the line, with times.
• Time: cook as close to departure as you can. If a 12:30 lunch leaves the kitchen at 11:00, the clock is running from 11:00.
• Allergens: label every dish and bring the ingredient list. Ask the client for guests' allergies when you quote, not on the day.

The kitchen itself still has to pass inspection; our health inspection checklist covers what inspectors check and the 2026 Food Code changes.

How much should you charge for catering per person?

Price each job from four parts: food per guest, staff, delivery and rentals, then a service charge if you use one, then sales tax. Start from your costed recipes; our recipe costing guide shows how.

Worked example: a buffet lunch for 60. Every figure is an example.

Three decisions sit inside that quote:

• Food cost target. Because staff, delivery and rentals are billed as separate lines, the food price only has to cover food and its share of overheads. Pick a target and hold every catering menu to it.
• Service charge or gratuity. A mandatory service charge is your revenue, not a tip, unless you pay it to staff as wages. Say plainly on the quote what it is and where it goes. Our service charge vs tip guide covers the IRS test, and whether your state taxes the charge is in our sales tax by state guide.
• Minimums. Set a minimum order (a guest count or a dollar figure) and a minimum delivery charge, so small jobs still pay for the van and the setup.

Hosting the event in your own dining room instead? Room fees, minimum spends and buyouts are covered in our private events and buyouts guide.

How much deposit should a caterer take?

Our decision rule: the deposit should at least cover the costs you cannot get back if the client cancels (food ordered for the job, rentals, staff you have booked), and never less than 25% of the total. Our default for new clients is 50% to hold the date; for regular corporate clients with a good payment record, you may waive it and invoice after the event.

Put the terms in writing on every quote:

CATERING QUOTE AND AGREEMENT

Client: ______________   Contact: ______________   Phone/email: ______________
Event date: __/__/____   Delivery time: ______   Service ends: ______
Address and access notes: ______________________________________________
Guest count: ____   Final count due: 7 days before the event (we bill the
final count or the guaranteed minimum, whichever is higher)
Dietary needs and allergies: ___________________________________________

Menu (per guest): ______________________________   $____ x ____ guests
Staff: ____ servers x ____ hours; ____ chef x ____ hours            $______
Delivery and setup                                                     $______
Rentals                                                                $______
Service charge (____%): this is [not a gratuity / paid to staff as wages] $______
Sales tax                                                              $______
TOTAL                                                                  $______

Deposit: ____% ($______) due on signing to hold the date
Balance: due [on delivery / within 30 days of invoice for approved accounts]
Cancellation: more than 30 days before: deposit refunded less rentals ordered;
8 to 30 days: deposit kept; 7 days or less: 100% of food and staff charged
Food left over after service: [stays with the client / removed for safety]

Signed (client): ____________  Date: ______   Signed (us): ____________

Have an attorney review your standard terms once. Check with an adviser for your situation.

What insurance and equipment does a catering business need?

Tell your broker you are adding off-site catering; a restaurant policy may not cover food served elsewhere or vehicles used for work.

• General liability for off-site events. Corporate clients and venues often ask for a certificate of insurance naming them as additional insured.
• Liquor liability if you serve alcohol at events.
• Commercial auto, or hired and non-owned auto cover if staff deliver in their own cars.
• Workers' compensation for the staff who work events.

Buy equipment in this order: a reliable vehicle, insulated carriers, thermometers, chafing dishes and serving gear. Rent the rest per job until the same item has been rented often enough to justify buying it.

How do you invoice corporate catering clients?

Business clients pay differently from guests. Expect a request for your W-9 and certificate of insurance before the first job, a purchase order number on every invoice, and 30-day payment terms.

• Open an account per client with a named contact, the people allowed to order, and a credit limit.
• Invoice monthly for clients who order often, listing each job with date, guest count and PO number.
• Chase on day 31. A polite reminder with the invoice attached, then a call.
• Watch the total owed. Stop taking new orders on credit when an account goes over its limit.

Put the expected catering sales in your monthly cash flow forecast as their own line, with the 30-day payment lag, so a good month for orders does not look like a good month for cash.

Can TablePort handle this for you?

TablePort's house accounts are built for repeat catering and corporate lunch clients:

1. Open a house account for each client, with a balance, an account-level credit limit and the people authorized to order.
2. Invoice monthly. Jobs charged to the account roll into a monthly invoice.
3. Sync to QuickBooks. Sales sync to QuickBooks or Xero, so catering sales land in your books without retyping.

The honest limit: TablePort does not apply for catering or liquor permits, and credit limits are set per account, not per person. See customers and house accounts.