As with any small business, setting up a restaurant business will require a financial investment. Some people are lucky enough to have start-up funds available, which others must use on their home to secure financing.

It is often said that “with great risk comes great reward,” and using one’s home as collateral is no exception to this rule. Starting a catering business provides the opportunity to create financial security, but it also comes with financial risks. With this in mind, it is very important to never risk more than you can afford to lose.

How much money is generally required to start a catering business? Generally speaking, starting a catering business requires around $2,000, which includes initial supplies, equipment, and any required local licenses. Before you can open your business, you will need at a minimum a business license, a food handler’s permit, and a tax identification number. Tax identification numbers are assigned through the IRS. Contact your local court or city officials for information on obtaining a business license and food handler’s permit. If you plan to serve alcohol, you will also need to obtain a liquor license.

Start-up expenses such as advertising and equipment will vary depending on whether you want to start with the basics and grow your business or want to start with a larger business setup. Advertising alone will require a minimum investment of $500 to $1,000. When you are just starting out in your catering business, it will most likely take a while for you to get established and turn a profit. It is very important to make sure you have enough savings to support yourself until you have your business up and running.

For most people starting a catering business, food preparation is the fun part of the business. After all, it is creative, exciting and challenging. But owning your own small business means you also have to attend to the business side of running your business, including accounting, marketing, staffing, and office administration. While you can do all of these things yourself, it’s best to hire someone with experience in each of these areas as soon as possible to handle the related responsibilities. Nobody can be a successful master of trades.

Acquiring new customers and sales is important to the survival of any business. For any service- and people-oriented business, being a true “people person” is a must. This means having the ability to interact with people from all walks of life, at all levels of business in a way that makes them feel comfortable with you and also confident in your abilities to get the job done successfully. You are expected to know the wants and needs of your customers before they do. Excellent and personable communication skills are a must.

Perhaps right now you’re feeling a little nervous or insecure about the skills required to start a catering business. The best way to gain confidence in your abilities is preparation. Talk to small business owners about their experiences, both their successes and their failures. Starting a small business, regardless of industry or area of ​​expertise, has many of the same responsibilities and challenges.

And finally, the best preparation for setting up a restaurant business is experience. Check with your local community college for hospitality or service management courses. Moonlight with a local caterer or banquet facility to gain hands-on industry experience. If you’re lucky, you’ll learn a lot about what it takes to be successful while learning from the mistakes of others without risking your own financial security or your new catering business.