Stepped into this catering business for the first time? Are you finding it difficult to get more clients and make a generous profit? Well, then you have landed at the right place. Here, we will guide you with every detail that you need to know before you make an estimate. Accurate pricing is an art and quoting a price for a particular task will decide business status. An effective pricing strategy can keep your business afloat and raise a decent amount of profit.
Check out this article to get an idea about the pricing strategies for catering jobs if you are a small business owner.
Steps to estimate catering jobs for small business
Before creating an estimate consider all the below points to make your price exact and accurate.
Get an approximate headcount
Other than food choice, the number of guests attending the event affects the price. Some people may not show up or some may not come in case they have not received the invitation. To protect yourself from unexpected loss implement effective policy in your contract. Such a policy will compensate for your loss in the above situations.
Consider the menu and service
Pricing depends a lot on the menu and the types of service the client wants. A hors d’oeuvres buffet would likely cost less than any other type of service. Moreover, the types of service including the cutlery used would also influence the rate. The glass serveware, china plates, bowls, etc. would surely shoot up the total cost. Additional items, special requests, dietary restrictions, or adding sustainable seafood all may heighten the price amount. Whereas, a simple menu or feeding guests outside regular meal time would cause a dip in the price.
Add all the variables
There are other variables as well that need to be considered before estimating your catering jobs. Let’s find out what those are.
Once you get the order you propose a specific list of menu and once that gets approved you need to calculate the ingredients required. The specific quantity of ingredients used in food also reflects the total cost. To feed a specific set of meals to each guest involves a particular set of ingredient lists with a specific quantity. Hence, before you quote your estimate you must figure out your requirements.
Social parties, get-togethers, and other occasions may include a bar which may be really expensive. There are clients who invest more in the bar than on food. The entire setup, alcoholic and non-alcoholic beverages, the glasses, bartenders, all add up to the estimate. Some clients prefer to choose their alcohol and bring up licensed bartenders. But in cases where you need to provide this create an estimate for this as well. On an average it should cost $4 to $5 per person and hourly calculation for this is recommendable.
Whether plated or buffet service, supply cost is an inevitable part. Some requirements are a quintessential part of a catering service. These are napkins, tablecloths, chairs, glassware, chafing dishes, utensils, and other equipment. While you estimate for the task do remember to include the rentals of these items to make your estimate accurate.
Including your service charge is a must. This includes all your overhead costs. The labor cost, rental, administration and coordination cost, other utilities like electricity, gas, vehicle fuel, maintenance, etc., all come under the service charge. You can split your monthly overhead cost and add them to the prices of the number of projects you receive in a month. Clients would negotiate so always keep room for that but profit-making is also essential for the survival of your business. Hence, be specific about your expenses while you quote your estimate.
Calculate the total amount
Add all your expenses including your service fee and tax to get the total amount. An estimate with a per person rate would be certainly helpful to the client to understand their expenditure and plan their budget accordingly.
In this article, we have provided a basic idea about how to price your catering job. Consider all the essential points to make your estimate accurate so that you earn a decent profit by offering the best service.
Typically per hour rate for caterers is between $8.7 to $25. Top-end caterers earn a fairly good amount which is around $25, whereas new caterers get about $8.7 to $9. Hourly rates vary from place to place like in New York it is $17.46 and in California, it is $17.41.
To calculate the per person food first cost out your ingredients. Then divide the amount by the number of guests and you get an approximate value. You can even benchmark certain items on a per-person basis. Like fruits and salads can be considered 1 cup per person or appetizers can be six to eight pieces per hour per person.
The average cost of a wedding buffet is between $1800 to $7700. The rate may fluctuate and can go as low as $400 and high up to $13000 depending on the arrangements and services.
Catering costs in large cities are more than in smaller ones. A sit-down buffet would cost more including the cocktails and bars and the amount varies between $125 to $300 per person. For hors d’oeuvres reception or buffet with no cocktails or bar the price can be around $30 to $70 per person.