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new to catering

post #1 of 5
Thread Starter 
Hi all!

I'm finally getting close to doing my own catering, but need done help in pricing. I have heard several types of pricing, from pricing by tray, multiplying my food cost by 3, hourly, etc. At the moment, I think I'm going with multiplying the food cost by 3, and adding my hourly labor charge. I would appreciate any feedback from those here with experience. Thank you in advance!
post #2 of 5

Using a multiplication factor like 3 is not a good idea, as most with catering experience will agree. Because its a guess, 

not only will it not be consistent, but its a very good way to go broke. 

That said, it is difficult for us to advise you on WHAT to price, because we dont have access to your numbers. 


As to HOW to price, the formula I use is :


food costs,  plus:

fixed costs (insurance, licensing etc.)

variable costs (travel, serviceware, rentals, supplies etc) 

labor (assistants) 

your own labor (planning, consulting, invoicing, shopping, setting up, serving, etc)

desired profit %

and any taxes etc you need to pass on to the client.


Divide that number by number of people to get an "out the door" per person price. 

post #3 of 5
In addition you need to price according to your market and saturation / competition. If you are in a market that has a lot of competition, then you will find prices may be generally lower all around. Most markets are saturated for a reason (demand, low food cost, easier access to bulk food suppliers, etc). And of course the opposite is true for others. You need to find your break even point (google this) so you at least know what is the bare minimum you need to take in.

This is where basic accounting principles come into play. ALL business are the same in regards to break even analysis. I would also set a salary for yourself and build that into your costs. That's the one thing many of us forget to do... Pay ourselves.
post #4 of 5

To add on to the OP's question, how exactly do you determine what to pay yourself? I can handle all of the other numbers, but I'm just not sure what would be fair to pay myself.

post #5 of 5
Pay is another big one. I pay myself a weekly salary that I think is fair for what I do and what the business can handle. Yes, there are some weeks which are slower than others and sometimes I don't take a check. But I add that to my 'balance' and make sure I do get that balance paid once we hit the busy season. It allows me to budget my personal income accordingly as well. Of course most of our business is seasonal. But if you know how to market yourself and look at vertical markets, you can be busy all year round - if you want.

You need to decide what would is a realistic pay for yourself. Its more of a gauge. Otherwise, why get into this business, or any business for that matter, if you can't survive. Sure, in the beginning it may be a labor of love. But that quickly subsides once you see the bills that gotta be paid and taxes you have to file. So, as a business, you need to compensate yourself for your time. It could be as small as $350 for a gig. Or an hourly rate, or yearly salary whatever is comfortable for you - and once again, realistic. This needs to be built into your prices.
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