How to get a catering license: A six-step guide for caterers

If you love to cook, a catering business could be a lucrative way to make money and pursue your passion. And a catering license can help your business look professional, get more work, operate safely and meet all state business requirements.

In many places, it’s illegal to work as a caterer without proper business licenses and permits. The local health department can shut you down until you get the right paperwork. You could also face fines or even jail time. And if you get someone sick from your food, you could face the costs of a lawsuit.

Get a catering license and operate as a legal business to avoid these substantial risks. Read our six-step guide to help you get your catering business license and start your new culinary career.

1. First, catering education and training
2. Decide on a catering business structure
3. Get catering business insurance
4. Apply for a general business license
5. Get for a license for a catering business
6. How NEXT helps caterers find easy and affordable insurance

1. First, catering education and training

Culinary school is not required for a catering license. However, it can help give you an edge over other catering businesses demonstrating you understand health and safety regulations.

But to become a caterer in most states, you must get a food safety certification or a food service permit.

This certification generally involves a short class followed by a final exam. You can take a class online or at many community colleges, universities and private culinary schools. Check with your local department of health for food safety resources.

If you want to serve alcohol, you may need to take an additional class in alcohol safety.

Although it is not required, another way to establish yourself as a skilled, professional caterer is to earn a certificate from the National Association for Catering and Events. Certification is based on a comprehensive exam that covers eight core competency areas:

• Accounting
• Beverage management
• Catering services
• Contracts and agreements
• Food production
• Event management
• Human resources
• Sales and marketing

2. Decide on a catering business structure

Catering is a business, and how you decide to structure your business affects things like taxes, insurance and exposure to legal actions. Most small catering businesses organize as either a:

• Sole proprietorship: This is the default business structure and it does not require any special paperwork. The simplest and easiest option, the business operates under your name and social security number. Your business expenses are deducted on your personal tax return, and you simply pay self-employment tax on your earnings. You are 100% personally liable for your company if you get sued.

• Limited liability corporation (LLC): If the business has more than one owner, it can’t be a sole proprietorship. An LLC is a simple business structure for businesses with two or more owners. It protects the owners from being personally sued for business matters. All profits and losses from the business are “passed through” to the owners’ personal tax returns.

• S corporation: An S corp is a simple form of incorporation similar to an LLC. It offers some tax advantages over an LLC and requires extra paperwork to establish and maintain.

Choosing your business structure is a big decision. Always seek advice from your attorney and accountant to determine which one is best for you.

3. Get catering business insurance

NEXT catering customer Simileoluwa Adebajo shares how easy it is to get coverage.

Catering insurance is vital for every small business, and it’s essential for the food service industry. Insurance gives you financial protection if someone gets hurt or you are held responsible for damaging property that doesn’t belong to you. Event venues often require it.

Most caterers usually choose insurance coverage that includes:

• General liability insurance: To cover a wide range of catering risks, including property damage, slip-and-fall injuries, medical payments and legal fees and defense costs. It’s fundamental insurance for any business.

• Workers’ compensation insurance: This can help pay for medical care and lost wages after an employees’ workplace injury. It’s required in most states if you have employees.

• Commercial property insurance: To help protect your business equipment, inventory, food spoilage and the building you own for your business.

• Liquor liability insurance: Add this to your coverage to protect yourself against the risks of serving alcohol.

• Commercial auto insurance: Most states require commercial auto insurance for business-owned vehicles to help pay for medical expenses and property damage in case of accident.

4. Apply for a general business license

In most states, you will need a business license or business permit to give you the right to conduct business in your area. A local government agency usually handles permit applications and issues these documents.

Business license fees vary depending on your catering business and location. Expect to pay a license processing or filing fee and the cost of the license itself.

5. Get for a license for a catering business

Catering license requirements vary by location. Call your local Small Business Development Center or the local branch of your department of agriculture and ask how to get a catering license in your area.

These centers are designed to help new businesses get started and to help existing small businesses succeed. They offer a great deal of free information and assistance, and they can help you work through all the details of getting your catering operation off the ground.

A catering license or permit often includes a health permit or inspection. A health inspector will likely visit your commissary kitchen to ensure that you meet all state and local requirements for commercial food preparation and safety.

If you want to sell alcoholic beverages, you will need a separate alcohol permit. Again, check with your Small Business Development Center.

6. How NEXT helps caterers find easy and affordable insurance

Catering business insurance from NEXT is flexible and customizable. It gives you the coverage you need to grow with your business.

Get a quote, find your price and access your certificate of insurance in about 10 minutes. Manage your policy online or on the app 24/7.

Start a free instant quote with NEXT.