One of the most overlooked things caterers often do these days is not pricing out the event properly. Every event is different and should be customized to exceed the customer’s expectations. The Excitement of landing a big catering job may lead you to making the biggest mistake you can make in the business and under pricing. Keep in mind over pricing is also just as dangerous for your business’ reputation, because many people now are sharing experiences via reviews on social media and other platforms And if they feel they were overcharged they will let others know of their poor experience. To avoid this you need to price your catering gigs correctly. This article will provide you with 7 tips for pricing out your gigs with profit and value in mind.
The two questions a customer will ask is what can you do for me and how much? At the end of the day that’s a big part of everyone’s question, but the biggest mistake you can make is giving out the price shortly after collecting the data on that first phone call. instead, you want to ask the customer for approximately 30 minutes to review the request and documents in order to provide the best possible price for their event. In most cases this will be received well from your customer. This will also give you ample time to look over your documents for any missed information and prevent possible miscommunications.
What’s on the menu?
What are you going to serve? Is it going to be hot dogs? Is it going to be chicken Parmesan? If it’s chicken Parmesan is it going to be quarter pound breast or half pound breast? If it’s a hot dog do they want to quarter pound hot dogs or do they want 8 to 1’s. There are a lot of things to consider here. Are you going to have a couple sides; two sides or three sides and what are they going in?Are they doing drinks or are you doing drinks when it comes to the dry goods are they providing the plates and silverware or will you be providing those things? All of these things need to go into your pricing considerations and you generally want that cost will be between 25 and 30% while making sure you have good steady profit to pay for the other things that we will discuss later.
Where is the venue?
Determining the travel time and the resources needed to get the food and or supplies needed for the event to the event will also help determine any added costs that may need to be considered. In some cases even though your customer resides in the same area that your business is in, the event can be a hundred miles away.
this can be a very big hassle factor if the venue is in an area where extra supplies you may need may not be accessible due to the event being in a remote location. In this case you would not want to run out of ice without a store in sight.Also depending on how many employees you need to get to the event may affect your bottom line as well.
How many hours of service do they need?
If the event is five hours long, it would be ideal to provide at least three hours of service minimum upfront in the pricing however if they want you to serve or five hours you can choose an hourly rate as a service fee to add on later. This can be $40 an hour or more depending on what fits your business model. Keep in mind this hourly rate should also include what you would need to pay your own employees in addition to having them stay the extra hour or two. Adding this in the contract will avoid any issues with overages once the event has ended.
What is the labor cost?
Your labor cost is going to make up a good portion of your overall cost. Is this event something that your significant other and yourself can handle, or is this an event that you will need to hire more personnel. How much that is that per hour divided by the Tips for example.
How many heads at the event per hour will you need to charge the customer four is another important question to ask. You definitely don’t want to be cutting into your own profits in order to pay other employees because it’s a larger venue and they want more service. Do they want someone on the buffet or is it put out so that they can serve themselves?
The hassle factor is also one that many caterers tend to overlook. For example, Little Johnny’s 6 year old birthday Party versus a 450 person wedding reception have two totally different hassle factors. Little Johnny’s birthday party will have very minimal complications in comparison with fewer choices and expectations. Most of the kids often don’t even eat all the food and parents are please when the children are please. The assumption is that if your customer service is on par at Little Johnny’s event, things will go pretty smoothly. On the other hand, the wedding will potential he have a much higher hassle factor and may require you to charge an additional 3 to 5 dollars per person just for the hassle factor. It is not uncommon to find multiple people coming up to you as a caterer with the Mane’s at such an event. This is also the case with larger corporate events so consider this on all your quotes.
The last thing that will affect your price is going to be the actual date of the venue? is this occurring on a prime Saturday during a holiday weekend? If so this will drastically affect the price quoted to the customer. On the other hand it could be a Tuesday afternoon when there is less desire for the day and you are able to price the job more competitively. Is the event happening between two other scheduled events on the same day and require you to take extra measures to meet all the needs of your customers? If so you may also need to charge a little bit more. Doing so will keep your business profitable and growing.
The tips mentioned above are inclusive and comprehensive when thinking of the catering industry however being sure to pay close attention to detail will avoid you making a big mistake. Use the tips to better help you price out your next catering gig.