Should I use my credit card or my client's credit card for groceries?

You may not have started your personal chef business because you can't figure out how to handle the cost of groceries. Okay, maybe that was just me. I was completely stumped in how to begin my business because I couldn't get past the question of how to handle groceries.

• Does the client pay for groceries or do I?
• Do I purchase the groceries with my credit card or my client's credit card?
• Does the client reimburse me individually for the groceries or do I add it to the total bill?
• Should I be charging for groceries or do I offer a flat fee meal service?

Argh, pricing my services was hard. Luckily I figured it all out then designed a teachable system where you can learn to price your personal chef services as well. The course "Pricing for Personal Chefs" is available here >>

The question about whether the client should pay for groceries or should I stumped me for a while before starting my personal chef business. I have to admit that it may have even stalled beginning my business as I had no clue how to deal with the groceries and didn't want to show up without some sort of plan.

How do groceries get paid and how much money do I have to save up to accommodate this huge expense? 

I started my business with maybe $500 reserves in my bank account, not likely enough to cover more than two to three client's grocery bills. The average purchase for a family of four when I'm preparing three complete dinners is around $150, more if they order filet mignon and less if they're vegetarian.

While some personal chefs ask for a grocery deposit upfront, I chose to go a different route. With a credit card line of $1,000 (which is the minimum recommended to start your personal chef business with), I would purchase client groceries and have them reimburse me on the same day. I would then immediately pay the money toward the credit card balance and move on to the next client. Eventually, the credit card company upped my credit line and now my line is $12,500 of which I have never even come close.

Here's a typical credit card transaction and reimbursement cycle:

• You go to the grocery store today and charge $200
• Your client reimburses you the $200 the same day
• Next day, the money your client paid clears and you pay your credit card balance with it
• It takes 1-2 days for the credit card balance to go back to $0

You can see how you would need at least $1000 credit line if you have multiple clients in one week. If it's an event under twenty people, anticipate $300 to $500 of groceries.

It's important to note that when choosing a credit card, don't just choose any card because it offers a low interest rate. To use a credit card successfully, your plan must be to pay off the balance before it becomes due, so the interest rate isn't important at all. Instead, choose a card with cashback rewards.

For example, I do all my shopping at Whole Foods. Amazon owns Whole Foods and offers 5% cashback on purchases if I use their credit card. This is free money. I don't know of many other credit cards that regularly offer more than 1% or 3% cash back on grocery purchases. If you find a good one with cashback rewards, get it!

It's important to note that this credit card is to be used for business expenses only. Never ever under any circumstance should personal items be purchased with this card. Mixing personal income and business income is called co-mingling and will lead you into heaps of trouble financially.

I share a lot about bookkeeping and how to not accidentally co-mingle personal and business expenses in the Personal Chef Business in 10 Weeks course. If you need help in all aspects of starting your business - pricing, getting leads, bookkeeping, etc. then this is the course you need.

Best Wishes & Much Success to You, Virginia Stockwell

P.S. Here are links to the courses mentioned above:

• Pricing for Personal Chefs >>
• Personal Chef Business in 10 Weeks >>
• Bookkeeping for Personal Chefs >>