How to start a catering business
What it costs, what you file, what it earns and what ends most of them. Every number below is cited to where it came from.
No government or peer-reviewed source publishes a startup cost range for a catering business, so no figure is quoted here. The hardest part is you cannot legally cook at home.
What it costs to start
No primary source publishes thisNo credible sourced range for U.S. catering startup costs was found, published figures come from vendor blogs and template sites with no stated methodology, so no number is given. The sourced components are: commissary or shared commercial kitchen access, which averages $20 to $35 per hour nationally ($40 to $75 in major cities) or $400 to $3,500 a month depending on hours, plus health department plan review (King County, WA charges $504 for the first two hours and $252 per hour after) and general liability insurance of roughly $400 to $800 a year.
What you have to file
Licensing is set by state, county and city, so this is what the category tends to require rather than a list for where you live. The state pages below carry the filing detail for each of the 50.
- Business licence / business registration and EIN
- Sales tax permit
- Catering permit from the local health department (covers food service at remote sites such as hotels, offices and venues)
- Use of Commissary / Shared Kitchen Agreement signed by the facility owner, a residential kitchen is not acceptable
- Field plan review inspection, with an equipment floor plan and menu submitted
- Food worker cards / food handler cards for all employees
- Certified food protection manager certificate
- Temporary food establishment or special event permits for individual events
- Alcohol server permits (e.g. Washington's MAST) and a catering liquor licence or banquet permit if serving alcohol
- Commercial auto insurance and general liability insurance
- USDA FSIS grant of inspection if preparing meat or poultry beyond the retail exemption limits ($100,900 for meat and $74,200 for poultry sold to hotels, restaurants and similar institutions, CY2024)
What the margins look like
No primary source publishes a profit margin for this business. IRS Statistics of Income does not break out a line this specific, and the percentages in wide circulation come from vendor surveys and market research whose samples and methods are not published, so none is quoted here.
Whether demand is growing
Flat
Roughly flat: IBISWorld puts the U.S. caterers market at $15.8 billion in 2025 (up 3.3%) and $15.7 billion in 2026 (down 0.9%), while the number of businesses has grown an average 1.7% a year over 2021 to 2026.
How big the market is
There are 13,644 catering businesses in the U.S., up 1.1% year on year, in a market IBISWorld sizes at $15.7 billion (2026).
The part that ends most of them
You cannot legally cook at home. Health departments require caterers to work from an approved commissary with dedicated storage, warewashing and prep areas, and explicitly bar residential kitchens, so the recurring kitchen rental, plan review and food worker card requirements land before the first booking. Beyond that, the frequently repeated claim that catering fails because of seasonal cash flow is plausible but we found no primary study quantifying it, so it should not be presented as a statistic.
Source: source
Before you start
- What it will cost you, since the numbers above are the category and not your version of it
- Sole proprietor, LLC or S corp, what actually differs, with no recommendation
- What your state wants filed, read from the state's own pages
- What you have to sell to break even, which decides whether the margin above matters
- Which way you actually work, if the choice between these is really a choice about you
A different business
Compare all twenty side by side
SideKix, “How to start a catering business”. https://sidekixhq.com/how-to-start-a-catering-business.html
Questions people ask
How much does it cost to start a catering business?
No credible sourced range for U.S. catering startup costs was found, published figures come from vendor blogs and template sites with no stated methodology, so no number is given. The sourced components are: commissary or shared commercial kitchen access, which averages $20 to $35 per hour nationally ($40 to $75 in major cities) or $400 to $3,500 a month depending on hours, plus health department plan review (King County, WA charges $504 for the first two hours and $252 per hour after) and general liability insurance of roughly $400 to $800 a year.
What licences do you need for a catering business?
Typically: Business licence / business registration and EIN; Sales tax permit; Catering permit from the local health department (covers food service at remote sites such as hotels, offices and venues); Use of Commissary / Shared Kitchen Agreement signed by the facility owner, a residential kitchen is not acceptable; Field plan review inspection, with an equipment floor plan and menu submitted. Licensing is set by state, county and city, so the exact list depends on where you operate.
What profit margin does a catering business make?
No primary source publishes a profit margin for this business. IRS Statistics of Income does not break out a line this specific, and the percentages in wide circulation come from vendor surveys and market research whose samples and methods are not published, so none is quoted here.
Is demand for a catering business growing?
Roughly flat: IBISWorld puts the U.S. caterers market at $15.8 billion in 2025 (up 3.3%) and $15.7 billion in 2026 (down 0.9%), while the number of businesses has grown an average 1.7% a year over 2021 to 2026.
What is the hardest part of running a catering business?
You cannot legally cook at home. Health departments require caterers to work from an approved commissary with dedicated storage, warewashing and prep areas, and explicitly bar residential kitchens, so the recurring kitchen rental, plan review and food worker card requirements land before the first booking. Beyond that, the frequently repeated claim that catering fails because of seasonal cash flow is plausible but we found no primary study quantifying it, so it should not be presented as a statistic.