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Pricing

post #1 of 3
4/22/08 at 4:09am
Thread Starter 
I am a fairly new caterer and I am trying to figure out pricing. I have not been around as long as some, but I know I am good. However I dont want to price myself out of the market. How do you price for a dinner party verses a cocktail party or a reception. With rising food cost and gasoline I don't want to loose customers, but I want to make money!
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post #2 of 3
4/22/08 at 1:05pm
The Key is determining the cost percentages you want!

First you want to figure out what you want your food cost% to be. 20-45% is about normal and will differ depending on what you are cooking.

Figure out your cost for food for your menu and divide by food cost%

ex. $100(cost) / 20% = Price of $500

Then figure out what your labor cost% to be again 20-40% is norm depending on what you are making (but try not to have both a 40% food cost with a 40% labor cost)

Figure the number of workers x the number of hours = labor cost
Labor cost/ 20%= Price of Labor

Then figure in your incedentals, rentals, transport etc...plus mark up cost + 10%(or whatever)

Then add all the prices together to find your final cost.

Ok I know there are lots of other categories but that is how to get started. Once you arrive at your price compare to your competition, and make adjustments, don't adjust price without adjusting something else like labor or food.

Check amazon.com there are several goo books about catering mangement available they will help you with some of these questions. Two I have found helpful are:
Off-Premise Catering Management by Bill Hansen & Chris Thomas
and
Catering to Every Whim: A Complete Guide to Catering Sales, Administration, and Operations by G. Eugene Wigger.
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post #3 of 3
4/25/08 at 11:19am
I have forty years experience.
You want a comprehensive answer in this thread? I don't feel like typing for a couple of days, sorry.

You have a tonnage of variables. There is/are no simple answer(s).
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