I'm not sure if you're still just going to do catering in people's homes or if you're expanding into other type sales? The question is, "Are you cooking in other people's homes rather than bringing prepared food from your kitchen in?"

In general, check with your town for the following...

1.) Business license (If you provide one meal a month you may not need a business license. If you provide 4 meals a month you may be considered a commercial business & need a commercial kitchen even if you're doing all cooking at your client's home. It depends on your state & local muninicipality. The only way to know for sure is to call your town hall.)
2.) Health Certificate (In some states, even cooking in somebody's else's home you need a personal Health Certificate that includes a TB check, use of rubber gloves, hair nets, etc. Again, call your town hall.)
3.) Inspection (Are you supplying equipment such as bread machines that the state needs to inspect?)
4.) Call a good commercial insurance agent & they generally recommend liability insurance for any damage you might cause in the home (or are accused of), in case (God forbid) anybody becomes ill from the food (accidently serving something with peanuts to somebody with a peanut allergy), somebody trips over equipment you've brought in & they break an arm, the stove you're using catches fire, etc., etc., etc.
5.) If you have anybody helping you that you pay (on the side or otherwise) you will have to pay for their Workmen's Comp, Social Security, taxes, etc.
6.) You'll need a Tax I.D. for the IRS
7.) Some states require you to charge sales tax on either your services or the food you sell
8.) You might want to consider forming a limited liability corporation to limit your personal exposure
9.) If you serve any alcohol such as even wine with dinner...you'll need to check with you state's Liquor Board
10.) If you're driving your personal car to these events with equipment or food you should check with your car insurance carrier to make sure you're covered for commercial use of the vehicle

11.) As to the contract...

In general, a contract has 4 simple rules:

a.) There has to be a offer,
b.) There has to be an acceptance,
c.) There has to be valuable consideration, and
d.) Good faith

Technically, and again in most states, any contract over $500 or for real estate, has to be in writing to be valid. But again, this stuff varies so much state to state & there are so many variations.

In addition, your basic contract should cover:

1.) Names of parties involved,
2.) Services to be provided,
3.) What's expected when you get to the house such as are you using their stove, etc.,
4.) Cover any required clean-up,
5.) Who has what insurance,
6.) Time of performance,
7.) Time of payment (receive upfront deposit including how they will be applied & terms of refund such as weather events),
8.) May consider including a clause protecting you in case you can't provide the services for reasons beyond your control such as illness, weather, traffic accidents, power failures, etc.
9.) You should have a written statement from client that no special situations exists such as food allergies, etc.
10.) You should have a brief disclaimer that other than providing the states services the homeowner will be responsible for any damage, liability other than those caused by direct negligence on your part,

Try looking online for a basic contract format. At some time, you should consider going to a civil attorney & having a contract written specific to your company.

Sounds exciting! Tell us more about the events you're catering.

/tricia

Wow, THANKS Tricia! Yes, I am cooking in other people's homes rather than preparing the food at my house and bringing it. No other types of sales. :O)

I was glad to read your detailed response, as I already have considered a lot of these things! I really appreciate your info, and will check with my local town hall and attorney!

Thanks again!
Sooz

I haven't done a cooking business but I did run a wedding photography biz for a lot of years. If you want to hire extra hands, do it as contract labor. No collecting taxes, etc. The person you hire is responsible for all of that. You'll need a document for them to sign that they understand that.

Good luck with your adventure. A good cater makes life wonderful for others. ;0)

Hi, Happy, and thanks for the great suggestion about hiring contract labor!

Smiles,
Sooz

I cater here on Long Island....Dont know about your state but here in NY you have to have a board of health kitchen that is certified or the insurance company with not give you insurance.

Thanks for the info, Eileen!

Here's my update... went to the city's website, and apparently if I cook in another person's home, which is what I plan to do, I do not need a business license.

The website specifically states:
All businesses with (city) addresses--it says businesses, not personal homes
Residents working from their homes--I won;t be working from MY home
Out-ofcity businesses such as contractors, sub-contractors, delivery businesses, etc.--that's not me either
All professionals (and there is a list, none of which is a cook or caterer)

Now, to look into insurance stuff, food handling stuff, and more detailed contract info.

Thanks!!

Smiles,
Sooz

If you do hire independent contractors make sure you follow the IRS restrictions concerning IC's vs Employees to the letter. I own a franchise and one of our east coast locations was fined $26,000 by the IRS for violations....such as if you "train" somebody...they are an employee...if you "orient" them to the position they are contractors. Silly? Yes. Important ...very! Get a good tax person that can navigate the hurdles. Well worth the money.

Duane

I think a couple of your city's requirements that make it necessary for you to obtain a business license could be interpreted more than one way and you should check with the city to get clarification. You wouldn't want to be in trouble because you misinterpreted the guidelines/ordinances.

"All businesses with (city) addresses--it says businesses, not personal homes"

Just because you operate out of a home (yours or otherwise) does not mean that it is not a business.

"Residents working from their homes--I won;t be working from MY home"

You ARE working from your home if you don't have an outside office. You just perform your service in someone else's home.

I'm not trying to be arbitrary. I just wouldn't want you to get into a tussle with the city later.

Doona's right. The place you perform the actual service is not your business address. In most areas, if you are running a business that has no seperate physical facility (rented office, etc.), then you are a home-based business and the "business address" is your home.

Tricia gave you a terrific list. The only thing I would add is to make sure yorr city doesn't have restrictions on home-based businesses. I've never run into it myself, but I know a phtotgrapher and wedding planner who have.

Sooz, the best thing to do is get you an Insurance Agent who specializes in this kind of insurance. If you know of any caterers that would be willing to speak to you about it, see if they have an agent. The agent is not the same as the insurance company. The agent will go find you an insurance company with the best price, do all the leg work, and most importantly, know the rules.

And here in Georgia, a contracted person you do not have to pay social security, taxes on. You pay them a flat salary and they take care of their own taxes. But you would need an I9 (think that's the #) to show citizenship or work visas. Simple, have a copy of their driver's license and SS card and have them fill/sign a one page form that you keep in your files. This is a form you can find online and print out.

A lawyer can fix you up with corporate papers that would protect your personal assets in the case of any law suits.

I personally would start with the lawyer even though they're going to cost you some big bucks. They'll keep you going in the right direction.

Good luck with this - it sounds great!

Beth

Wow! Great advice and things to consider, and I will look into each and every one of them! I'm drafting an email to my attorney tonight!

MANY thanks!!!
Smiles,
Sooz

Sooz -
Check out the Small Business Administration or SCORE in your area. I bet they will have all this info in their computer system specific to your city.

Just a thought - Maybe what you're doing is closer to being a personal chef & that could alleviate the catering/health permit concerns. As a business entity operating out of your home, providing chef service, you could hire temps through a service & your payroll tax liability/obligations for the workers would be nil. IMO, that would be the way to go. If you hire employees, you'll be stuck with withholding, matching SS taxes, & unemployment taxes & quarterly filings with the Feds & State. I don't know if these workers could qualify as independent contractors or not since they usually work under your direct supervision & controlled hours; simply making them sign an agreement that they're independent contractors won't cut it with the unemployment people. Maybe there's some exception for day workers or the maximum you pay them within a given period of time.

Good luck on your adventure -I like the idea.

Thanks for the idea, Bean--yet another thing I had not thought of, and really, they probably have loads of info!

Antiquesilver, I plan on keeping things very small--intimate dinners and special celebrations, etc, which means I can do it all myself and use someone else's kitchen too. I really like the idea of temps if it comes to that--I see this more as a hobby where I can earn some "pin money" rather than a part-time or full-time job, but I do want everything to be legal. Yes, I see it as a personal chef-type venture!

Smiles,
Sooz

I think you want to make sure that as a chef, you're covered for any accidental breakage in the home, any "missing items" (esp. if you hire helpers) and that you're covered if you slip and fall or injure yourself on the job. (And think about disability insurance, if you can't work for some reason.)

You want to make sure that any contract with the homeowner indemnifies you from any complications that might result from the food--undisclosed food allergies, choking, etc. I'm not trying to alarm you, but we live in a litigious world and you need to protect yourself.

I agree with ideefixe. When something goes missing - even if no one has seen it in 10 years - YOU will be the one who 'stole it' & suddenly it's a valued family heirloom.

Antiquesilver, the I9 has nothing to do with them being id'd as independent contractors. It's solely to protect you from hiring 'illegal aliens', something the government is cracking down on. It's required for both contract labor and employees.

Sooz, this is why you need a lawyer who's current with your states requirements. You're getting a lot of conflicting info here and it could get you in trouble. Stick with the lawyer and insurance agent and you'll be covered.

Beth

Dirtgirl, I made no reference to the I-9. That form only pertains to employees, as far as I know; I've never seen it used with independent contractors & I work with them on a regular basis. If you contact a service to provide temps - not independent contractors - it's the service's responsibility to keep an I-9 since the temps are employees of theirs. An example is hiring a temp secretary for 2 days through ABC Manpower. As a business owner, you pay ABC & they pay - & take responsibility for - the secretary who showed up. She is their employee & you have no obligation (and probably no right) to question her citizenship, much less have her submit an I-9.

If a business hires unincorporated independent contractors, it's necessary to have them fill out Form W-9 for tax identification purposes so you'll have a SSN & address for 1099's at the end of the year.

Thanks for all the details and info, Ideefixe, Beth, and Antiquesilver. I am definitely going to followup with my attorney and insurance guy AND my tax lady! So much for a little hobby where I can make some pin money! lol

Again, many thanks to all !

Sooz