Start a personal chef business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your personal chef business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a personal chef business?
A personal chef must purchase cooking supplies, food, food storage containers, rent/purchase space to prepare meals, obtain liability insurance, and invest in marketing efforts. One must pay a fee to obtain a license, permit, and Food Safety Certification.
What are the ongoing expenses for a personal chef business?
Personal chefs must pay for food, cooking supplies, a space for food preparation, utilities, high-speed Internet for recipe research purposes, liability insurance, rent, advertising, and labor. However, labor costs are typically non-existent or quite low when the business first starts. If you add a food prep assistant, they will likely earn between $10 and $15 per hour. If you opt to prepare meals from a space outside your home, monthly rent will likely run between $600 and $1,200 depending on the size and location. Utilities for such a food prep space will likely run $50 to $100 per month. High-speed Internet will likely cost around $50 per month.
Food costs hinge on the number of clients you recruit. The cost can range from around $400 per month to several thousands for multiple clients. Cooking supplies will eventually deteriorate. You will likely spend at least $50 to $100 on new cooking supplies each month. Budget in $100 to $200 per month for advertising purposes. A marketing professional might be necessary if the business expands across posterity. This professional will earn between $30,000 and $50,000 per year.
Who is the target market?
The ideal customer is a wealthy individual who is willing to refer the personal chef to other wealthy colleagues and friends. Personal chefs tend to prefer cooking for individuals who enjoy a wide variety of foods and are willing to try new dishes. Businesses and other organizations are also coveted as clients as they are comprised of numerous individuals. An abundance of mouths to feed means more money for the personal chef.
How does a personal chef business make money?
Personal chefs make money by charging customers a fee for food preparation, on-site cooking, grocery shopping, and nutritional advice.
How much can you charge customers?
Most personal chefs charge between $35 and $50 per hour. Some charge a daily or weekly rate that hinges on the number of meals prepared. If you are particularly successful and secure the business of especially wealthy clients, you will likely be able to charge upwards of $75 or more per hour.
How much profit can a personal chef business make?
The average personal chef makes around $40,000 per year. However, those with years of experience and an expansive client base make upwards of six figures per year. The best of the best build a brand and earn several hundred thousand dollars or even millions of dollars per year.
How can you make your business more profitable?
Personal chefs can boost profitability by going out of their way to build new relationships with those who are interested in their services. Even befriending someone who is not a “foodie” can lead to a reference to an individual who is willing to pay top-dollar for a personal chef. Personal chefs can also bolster their bottom line by teaching others how to cook, writing cookbooks, operating a popular website, and making cooking videos for YouTube. It is also possible to sell old cooking equipment when upgrading to new cookware.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your personal chef business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a personal chef business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In business where services are provided on an extended basis, a services contract is often put in place outlining terms and conditions of service.
Personal chef businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, and service level expectations. Here is an example of such a service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your personal chef business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a personal chef business
The best way to market your business is to connect with others in your community. Let people know you run a personal chef business. Attend networking events, conferences, seminars, and other community events to befriend locals. Pass out business cards and post flyers that tout your business. It also helps to have a visually captivating website with insightful content. Take the opportunity to post content to your blog and social media platforms to establish yourself as a true expert in your niche and improve your search engine optimization (SEO).
How to keep customers coming back
Interact with fellow professionals, community members, and “foodies”. In some instances, personal chefs obtain steady business from establishing inroads with a single client who recommends his services to others. Target those who are wealthy. The vast majority of people are unwilling to pay for a personal chef. Your clients will likely be wealthy professionals, food enthusiasts, athletes, or uber-busy individuals who do not have time to cook.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Personal Chef Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is perfect for individuals who have a passion for tasty food and the cooking process. Those who are interested in creating fulfilling meals and healthy dishes that suit the nuanced palates of clients will thrive in this business.
What happens during a typical day at a personal chef business?
The typical personal chef spends the majority of his day preparing dishes for his clients. Many of these meals are created at the client's property. Some meals are partially prepared at the personal chef's home or another space designated for food preparation. Personal chefs also spend time researching recipes, new cooking techniques, and cooking equipment. They also handle client billing, marketing, logistics matters, and scheduling.
What are some skills and experiences that will help you build a successful personal chef business?
One's success as a personal chef hinges on their culinary skills. It is also important to take risks, try new ingredient combinations, and create new dishes. The best personal chefs customize each meal to the nuanced desires of the client. It also helps to be personable. Clients enjoy interacting with their personal chef. If one cannot hold a lengthy conversation, establish meaningful bonds with prospective and current clients, and persuade potential clients to sign up for meal service, they will struggle to succeed in this business.
What is the growth potential for a personal chef business?
The most successful personal chefs steadily add clients as time progresses. If they do not cook for the majority of their clients on-site, they can add employees for food preparation purposes. The most successful personal chefs establish well-known brands with regional, national, and even worldwide appeal. Some personal chefs become so successful that they develop into international icons with acclaimed cookbooks, TV cooking shows, and restaurant chains.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a personal chef business?
The best way to launch this business is to become a skilled culinary expert. In many instances, the quality of one's food is enough to inspire new clients to sign up and refer the chef's services to others. However, establishing relationships with individuals who can afford a personal chef is of the utmost importance. Half the battle is connecting with these individuals and convincing them to give you a chance to prepare their meals. Seize every opportunity to network with those in your community. Consider joining the United States Personal Chef Association (USPCA). Membership with this network of professionals will give you access to an abundance of food entrepreneurs and resources that will prove critically important to your new business. Be sure to tout your ability to create gluten-free, vegan, and vegetarian meals as many of those with such specialized diets are willing to pay a personal chef to meet their individual culinary demands.
How and when to build a team
Many personal chefs do not require a team. If you eventually add enough clients to justify the addition of another employee, this new hire will likely assist with food preparation, billing, and/or scheduling. If you establish a brand based on the merit of your food, you will eventually need to add a number of people for food prep, accounting, marketing, and scheduling/reception duties.