Originally Posted by Bevrox
When I say from home, should have clarified I don't actually have my own space, I will be renting! I will be taking orders from home.
Ah, different game then!
My approach to pricing: Calculate ALL your costs, variable and overhead, add your desired profit and that is the MINIMUM you must charge.
Sounds simple and straight forward right? It is NOT!
The variable costs are easy, you've already done that, the overhead is where it gets tough.
Apparently you're already renting the kitchen facilities and you probably already have your business license(s), food safety manager certification(s), liability insurance, and numerous other monthly or annual costs and can calculate you daily/weekly/monthly overhead amounts. Translating that to a per tray or per person figure is tricky. Let me illustrate.
Say your annual costs, i.e. licenses, insurance, etc. total, oh um, $4,800, that's $400/month or, say $20/day if you make tray(s) every day!
You kitchen rental is a little difference and depends on your specific arrangements, I'll assume you pay daily and only as you need it and you pay, um $100/day and you work, um, 3 days per week. Your overhead cost for the three days is now 3x$100 plus $100 for your annual costs or $400/week.
Leaving aside the cost of food and labor, your overhead charge per tray works out to:
- 200 trays per week = $2.00/tray
- 100 trays per week = $4.00/tray
- 50 tray per week = $8.00/tray
- 30 trays per week = $13.33/tray
- and so forth
The same occurs with your desired "in your pocket profit".
If you charge too much, nobody buys your trays, if you charge too little, you go broke.
You HAVE to know your costs and your market, no one can give you the magic answer!
If you cannot figure out what to charge, DON'T DO IT!