What I am hearing you wanting to do is right along my business model as a personal chef.
I would refer you to this thread:
http://www.bbq-brethren.com/forum/sh...ad.php?t=59238
If you read through the entire thread, you may see some similarities to your goals and those of Phil. If I'm right, I can help answer your questions even though I don't live in N.E. IL. (However,I was born on the North Shore. If that counts.)
I do NOT do the traditional work of a Personal Chef. My business specializes in small events. (30-70 guests) Most of my jobs fall below the level that a full catering company will do. Around here, most caterers won't touch an event of fewer that 100 people. Though SOME of them will "reach down" to jobs of 75 guests at times. As such,for the most part, I don't compete with catering companies. In fact, some of them refer opportunities to me, and I return the favor.
Forming an LLC is well worth it, given the presumption that you have assets to protect. The cost is pretty limited. Most of the costs associated with an LLC are related to the accounting requirements, and those are mostly things you should be doing for your business anyway.
As for insurance costs, OC Pig Assassins is right on target. $500 per year should cover you well. Be VERY CAREFUL in selecting your insurance, though. Catering is a very different business from being a personal chef. Catering is mostly done off site in a commercial kitchen environment, with only the service taking place 'on site'. As a personal chef, I do most of my work "on site", with some limited prep work taking place in a commercial kitchen environment. Different business models. Different insurance needs.
If you are going to do this, I would STRONGLY encourage you to write up a formal business plan to outline what you really wish to do. Identify your target markets and goals. This will keep you from drifting outside of your 'sweet spot' by very much, and helps to keep your business on track.
