Pizza catering can be a lucrative business. The catering business as a whole is forecasted to exceed $12 billion by 2020. And sales from mobile caterers are forecast to reach $1 billion.
In this article, you’ll learn about the things you’ll need to start a successful pizza catering business.
Decide on Your Pizza Business’ Structure
You will need to register your business. When doing so, there are many business structures you can choose from. For example, you can choose to be a sole proprietor, a partnership, or a corporation. But for most people, an LLC is a good choice. You can even register as a single member LLC. But make sure to ask your lawyer before making any decisions.
Sometimes, mistakes happen. Imagine that you mess up during a huge catering event. Maybe you ran out of dough and could only deliver half of the pizzas agreed upon. These things happen. But hiring a caterer cost your client a lot of money. So they decide to sue you.
LLC stands for Limited Liability Company. When you work as an LLC, your personal assets are protected from lawsuits. For example, your home and your retirement account.
Apply for an Employer Identification Number
You will also want to apply for an Employer Identification Number (EIN) with the IRS. This will come in handy when tax time comes. Furthermore, EIN’s are especially important if you want to hire employees.
Most catering companies that hire you will also ask for your Federal Tax ID. You will likely get paid as an independent contractor.
Finally, you might also need a State Employer Number.
Get a Seller’s Permit
A Seller’s permit will allow you to purchase pizza ingredients at wholesale. This is especially handy when selling unique pizza flavors.
A seller’s permit will also allow you to sell retail without any problems. Selling pizzas means you will also need to collect sales taxes. Indeed, all everything you sell is taxable. So seller’s permits are helpful for that, too.
Apply for a Business License
A business license will allow you to get your business going in your city without any problems.
Depending on your location, processing fees for business licenses can cost anywhere from $20 to $50 or more. It may also cost you another $10 or more for the flat annual tax. Some cities require you to pay this tax for the privilege of doing business in that location. So make sure to research the requirements for your area.
In somewhere like California, you may have to pay as much as $1000 to get your business license. This is because you are using their city to market your business. At least, that’s California’s reasoning for why they charge such high prices.
Qualify for a Food Handler’s Permit
When you start a pizza catering business, you become a part of the foodservice industry. As a result, you will need to get food certified. In most states, you will need to obtain a certificate before you are allowed to sell food.
Get Your Health Permit in Order
Whether you cook your pizza from home or a commercial location, you will likely need to get a health permit. This will also involve scheduling a health inspection.
Keep Records of Your Business
Keep records of your clients log sheets. You should also take note of their particular needs and specifications. This is so that you will know what they need in the future. For example, do you have a client that wants everything smoked with mequite wood, and only mesquite wood?
You can even use this information for retargeting them. For example, if your client hires you for a birthday event, it stands to reason that they will have a similar event around the same time in the following year. In this case, you can send them a coupon. This can help entice them into hiring you again. Finally, make sure you prepare and keep records of your invoices.
Choose Your Business Location
Make sure to check your city or county for zoning regulations. If you decide to lease or buy a commercial location from a previous catering business, then you likely won’t have any problems. This is because the previous owner should have already cleared the location with the zonic authorities.
Unless you are sure of what you are doing, do not sign a long term lease when you are just starting out with your new pizza catering business. This is because if the business fails, you will be liable to pay the lease in full. This is true even if you stop using the location.