I was asked to cater a private birthday party for 25 people. The menu included GF/DF hot stuffed banana peppers, GF/DF meatballs, GF/DF penne pasta w bolognese, GF/DF garlic green beans, GF/DF roasted red peppers & onions with sautéed mushrooms, conventionally prepared individual lasagna rolls w a mixed meat, cheese and spinach filling and a marinara sauce. I calculated the food cost at $200, tripled that and gave the customer a price of $600. She bulked at the price so as a courtesy, I dropped it to $500 because she represents the possibility of future business, but she wanted it for a price of $400, so I politely declined the job. I estimated shopping, prep and cooking time at about 20 hours of work. At the price she was proposing, I would have been making $10.00 per hour. Question: Did I estimate the costs and time correctly and give her a fair market price for my services. I am just starting out, and I don't want to start out by under valuing my services, but I don't want to have unrealistic expectations either. I live in Pittsburgh.
Welcome in Sandy.
IMPO, you did fine. In fact you should be proud that you had the chutzpah to walk away, as most people don't.
Indeed the way your post read, at first I thought you were giving in... but you surprised me.
Now, this scenario is such an old song and dance, that the words de ja vu doesnt do it justice
I suppose it depends what you're planning to do with your business, but generally speaking there are two ways
of pricing a gig. Your way and the client's way.
Your way is designed to render a fair price, which can generate future referrals, while making you a decent
profit for your business to grow.
The client's way, (not always but often unfortunately) is to get your services as cheaply as they can.
And offering you the promise of future referrals is a common ploy. But when you think about it logically,
what good is a referral who expects the same low-ball price their BFF just got? It just paints you into a corner,
forever trying to drop your prices to please cheap, or low budget, or fussy clients. It eventually dries up and
you have nothing from that branch anyway.
I might also note that often as not, its these type of clients that, when you DO give in to their "demands"
you often wish you had walked away in the first place. Its...indicative of a general attitude, of trying to take
advantage, which often includes nitpicking about the final outcome--including the bill. Then when you don't
give in to that..... they're now in a snit and you lose the referral pipeline anyway.
The lesson here is to choose your clients carefully--your business health will thank you later.
K, all that said, if they're truly "on a budget" then the common thing to do is to work it backwards and say
"look, here's what I CAN do for you for the 400.00" at which point you start eliminating/substituting the
more pricey, or more labor intensive, entrees.
As to your actual case.... you're charging an out the door price of 24 per person. And you dropped it to 20 per
person. On the menu you described, I don't find that unreasonable. However if I were pricing this out I would
list everything out (I don't use the "times 3 method, good way to lose money, as your actual other costs haven't
much to do with food cost) including things I'm providing like serviceware, and accounting for things like serving
method, (action-station, self service, plated service, drop-off, etc) things which you didn't happen to mention,
so I'm thumbnailing here.
2 things about your menu, first while its not a complex one, it does look like a fair amount of work--you appear
to have maybe 4 entree-category appetizers, and couple veggie apps as well. 6 items total for 25. Yeah.
And second, with all that GF/DF in there, I personally consider it....I suppose "specialized cooking" is the correct
phrase. Which you would be perfectly reasonable in charging a bit higher premium for. Again IMO; there are
those who would differ with me.
Even with my providing the food only, no service ware etc, serving it as a self service buffet, with me or a helper
replenishing, and my minimum being 450.00 for a simpler fare..... I would be right around what you were willing
to do it for.
So you may be new at this but at least you sound like you know what kind of work is involved here.
You did the right thing. They are looking for the cheapest way. They probably told you, that you will get future business and so fourth. You wont , and if you do they will want cheap to. Let them go to a deli or supermarket. Stick to your guns. If you want you can tell them what you can offer for what they want to pay. Don't go by the times 3 figure. That is only food , what about traveling time, cleanup time, gasoline, rentals etc.?
Good heavens another Pittsburgher. I spent a large part of my life turning down tightwad yinzers and their " we want a 5.95$ buffet for our firehall wedding. Never go low, I saw too many people go broke selling themselves cheap. People, esp us western PA'ers will always cry poormouth, those are the people that should have Giant Eagle cater their event. Good luck to you in your new business.
God I miss sunday brunch at the Grand Concourse and a Stillerz game after, and those QS&L wings.
Thank you so much for the encouragement! It felt like the right thing to do, but it's nice to have the reassurance. My pricing was strictly for food only. The customer was going to pick it up at my location and serve it herself, buffet style, in her own home.
I agree with you all completely... if I start out undercutting myself from the beginning, then I will never be able to make any money. It's important to know the value of what we do. If I don't value my own time and skills, then nobody else will either. :)