Your love of cooking has motivated you to pursue a catering business. You believe that hard work and dedication can make it extremely lucrative.
However, before you leave your current position, there are several things to know about how to get a catering license for your business. Here's a step-by-step breakdown of how to be a caterer.
Catering Education and Training Options
If you're wondering how to become a caterer, the first thing to do is to get an education in the catering industry. It's more than cooking and serving. There are elements of accounting, sales and marketing, hiring, and contract law. Knowledge of these subjects is required to get a food safety/service certification/permit in your state.
The classes to obtain this caterer license are available online. Additional locations include two-year and four-year colleges. An additional course is normally necessary if you want to serve alcohol as part of your business plan.
Though catering classes are offered at most culinary arts schools, it's not necessary to take additional courses to qualify for a caterer license. However, enrolling in this type of institution is recommended.
Not only does it expand on the cooking skills you already have, but it also provides a better understanding of local health and safety regulations you must be aware of. In turn, you gain an upper hand over the competition.
At the end of the class, you're given an exam. Whether you pass or fail determines if you can apply for a catering business license. It's recommended to reach out to your local health department to determine the proper guidelines and where these certification classes are offered.
On top of obtaining a local catering permit, you should also earn a certification from the National Association for Catering and Events. This is based on a comprehensive knowledge base that covers core competencies. These include:
- Beverage management
- Contracts and agreements
- Human resources, and
Can You Work Without a Catering License?
Even if you have the proper insurance for your storefront or home-based catering service, you still need a license from the state to operate. In fact, some regions don't let you obtain a permit without the necessary coverage.
Without the proper certification, you put yourself and your assets at stake. Since you work with food, you run the risk of the health department shutting you down until you get the right permits. Further operation without the proper catering license requirements leads to potential fines.
There's another risk you take when you don't have a caterer license that's connected to your clients. If someone gets sick from the food you provide, then you face problems on two fronts: you could be sued by the customer as well as face legal action from regulatory authorities.
Should this happen without insurance, then the costs of attorneys and any damages come out of your personal assets. Furthermore, you're deemed as high risk. It gets harder to obtain business insurance and approval for a permit. On top of this, your reputation is greatly harmed.
What licenses are needed to start a catering business?
Obtaining a food establishment license
In addition to qualifying for and receiving a catering license, you also must obtain one for the food establishment. This is the location where the items are prepared, cook, and possibly served to the public. Without this permit, you don't have the legal standing to continue operations.
Each county and state has its own guidelines and fee amounts to obtain a food establishment license. Generally, you need to define whether the location is static or a mobile unit like a food truck. The licensing agency also needs to know if you intend to operate in an area they inspect and license.
In either environment, you are asked to provide details on various features of the establishment. For instance, the menu, equipment manufacturers and layout, utility and HVAC diagrams, and interior finishes. All of this information is packaged together with a licensing fee. Obtaining an alcohol license
Should you want your catering establishment to serve alcohol, then you must obtain a license. This is a non-starter when it comes to local and state regulators. If an inspection reveals you serve alcohol and aren't licensed to do so, then you must stop immediately or close your operation down. Furthermore, excessive fines will be levied against your company.
Like a food establishment license, regulatory conditions differ between the Alcohol Beverage Control (ABC) agencies in each region. Some are directly regulated at the state level while others let counties and municipalities handle regulation.
There are different types of alcohol licenses based on how you intend to serve. For example, an on-license is for a catering establishment that provides drinks on the premises. An off-license allows customers to purchase alcoholic beverages for off-site consumption.
Since your catering establishment focuses on food, you would qualify for one of two license classes. One is for beer and wine served to complement your dining offerings. A restaurant license qualifies you to serve any type of alcohol, including hard liquor, within the establishment.
To obtain a liquor license, you need to provide several pieces of information. This includes an employee identification number (EIN), certificate of incorporation, floor plans, and a proposed food menu. In addition, a fee of several thousand dollars is required.
Obtaining other licenses or permits
There are other licenses and permits required for your catering business depending on the situation. For instance, if you want to construct an outdoor patio, then you need a building permit. Should you want to expand your offerings and include musical performances, then a license may be required. The same is true if you want to market your business through billboards.
As above, the types of licenses and permits vary by state and local jurisdiction. It's best to speak with a county or state representative to determine the necessary legalities, especially when it relates to business insurance.
Getting a Catering License
There are several steps to acquire a catering permit. However, none of these can take place if two criteria aren't met. First, you must be 18 or over. Second, you must have a valid photo ID for confirmation.
1. Get a business license
There's a difference between a business and a catering license. The former must be initially obtained before you proceed on to the latter. The reason is that the business license is proof you have the right to conduct sales in your municipality, county, or state.
The process to qualify for business authorization depends on what the local government considers your catering operation. If they consider it as something that offers a service, then you'll need a license. On the other hand, if it requires strict health guidelines and inspections, then it's a permit.
Most likely, you need to get a business license at the start. Catering and health inspection permits come next.
2. Check your region's catering licensing requirements
Once you acquire your business license, the next step is to make your catering company official. It's a must that you check your local requirements to make and sell food, especially if you want to relocate your business from one county or state to another.
An internet search should help you identify the agency you need to visit to determine licensing requirements. If that doesn't work, then speak with a representative from your local Small Business Association (SBA) office. Additionally, you could speak with other catering organizations to find out what's needed.
3. Get a catering license
When the first two requirements are completed, you work on your catering license. As we previously mentioned, this requires you to take a class and pass an exam. Further, a health inspection is required to certify your kitchen and serving areas are up to local standards.
This doesn't just apply to a separate business establishment or food truck. States that allow home-based catering operations must go through the same inspection and licensing processes. Failure to register this type of business results in fines and possible legal action.
Registration Criteria for a Catering or Food Establishment License
A catering or food establishment license isn't provided without some required information. The data is needed to verify your business is legitimate, whether it's home-based or established elsewhere.
The basic registration procedure
The basic registration procedure for a license is as follows:
- Registration: Register your business with the respective government agency along with the necessary fees.
- Records: Record the application reference number you receive in case it's needed.
- Approval: Wait for approval or rejection. The amount of time this takes depends on what the agency says.
- Inspection: You may need to have your business inspected before an application is approved or denied. You will receive information from the registration agency on the date and time of this action.
- Apply for the next license: If a license is granted, then you can move on to the next license while you start operations. If the license is denied, you receive details on the reasons. From here, you can appeal the decision.
Required documents for a catering business
There are a number of documents you will need to provide, including:
- Completed and signed registration forms
- A valid photo ID
- A copy of the business license
- Proof of possession of the catering operation. This could be a rent agreement, utility bills, or a partnership deed. This also applies to home-based operations in some areas.
- Certification of incorporation if applicable. This doesn't apply if you are a sole proprietorship or limited liability corporation (LLC).
- Floor plans and interior designs
- A layout of the kitchen and serving areas
- Details on the utilities and HVAC unit
- Menu of proposed dishes
Additional fulfillment requirements
On top of the items mentioned, there are additional requirements to fulfill to obtain a catering or food establishment license. Most of these are related to health conditions.
- Pollution-free: The location, whether it's home-based or not, should be free of internal or external pollutants.
- Ventilation: Areas must be properly ventilated.
- Storage: Storage spaces need to be clean and large enough to hold the necessary supplies.
- Cooking: Methods of cooking must be free of contamination.
- Fresh produce: Fresh food or frozen fish needs to be used.
- Containers: Containers used for storing food must be free from dirt or other particulates.
- Counters: Counter areas need to be clean.
- Training: Any staff members need to be properly trained in food preparation and handling. Furthermore, they must maintain personal hygiene standards.
Should your catering business or food establishment not adhere to some of the above requirements, then a notice of improvement could be issued. This details what is missing in your paperwork. Or, if it involves problems with a health inspection, you are provided with the findings. You're given a certain number of days to make the necessary changes before the next review.
Violation of these requirements results in varying penalties. Not addressing the missing paperwork or cleanliness issues delays the time it takes to get your catering license.
Continued flagrant denial to complete the necessary tasks could result in a rejection of the application without appeal. Punishment is harsher if a health inspector is denied access to your establishment for another review. This could result in a severe fine and possible jail time.
The Catering Business Structure
In this case, the structure means how you define your catering business. There are three forms to consider.
The first, sole proprietorship, means you operate under your own name and Social Security number. Plus, you file your business assets and expenses on your personal tax filing. While this is the easiest form of structure, it also increases the risk of liability to your finances.
The next structure is an LLC. Here, you operate under a business name and an EIN and could have more than one owner. The advantage to an LLC is it protects your personal assets if you're sued.
Then, there's an S-Corporation. Similar to an LLC, it allows you to incorporate and take advantage of certain tax benefits. On the downside, there's more paperwork involved, and taxes are normally filed quarterly.
Food Service and Safety License
This license is also known as a food establishment license or a food handler's license, depending on the state you're in. All catering businesses need this license to operate. To obtain this license you'll need:
- To pass an inspection of your venue from the appropriate governing body
- Training for employees
- Food certification for you and your staff
Catering permits are required in some states and counties. This permit requires you to have a:
- Kitchen verification form completed by the caterer and the facility owner
- Detailed menu and explanation of how the food is prepared and transported
- Facility layout renderings of all equipment
Business License and Registration
This is a requirement for all businesses to have. Depending on where your business is, you may have to have this license before you start operating. You'll need to register your business if you have employees.
In most states, you won't be able to obtain a business, catering, or food establishment license without some form of insurance. It's required to ensure you have the necessary coverage to handle potential legal issues should a customer sue. At the minimum, you need a business liability insurance policy.
This addresses many basic issues. Among them is coverage for medical costs incurred by a customer injured on your premises. Equally important, business liability insurance handles the cost of your legal defense and monetary awards. On top of this, the policy shields your assets when someone sues for libel or slander.
While comprehensive, this form of liability insurance doesn't cover everything. For instance, injuries to your employees or vehicle accidents while on the job wouldn't be covered. These require additional policies such as workers' compensation and commercial auto insurance.
To find out what's best for your catering company, it's recommended to speak to an insurance representative to determine needs and costs. Contact us today to learn about how we can assist you.