| This article sets out the basic strategy for | | | | other monthly overheads that your business will |
| professional catering business pricing, focusing on | | | | have. |
| estimating and quoting at a level close to or just | | | | After you have calculated your monthly costs |
| above market value. Bear in mind though that | | | | you can then divide this figure by the average |
| every job is different and adjustments to this | | | | number of events that you would typically cater |
| system can be made on a case-by-case basis. | | | | to in any given month. This will give you an |
| It is important that you take the time to get | | | | amount that should be allocated to each event to |
| your pricing right. If you price catering jobs too | | | | cover monthly expenses. Adjustments can be |
| far below market rates you may win clients and | | | | made if you are just starting out and securing |
| grow your business in the short term but you | | | | your first few jobs. Adjustments should also be |
| won't be making much profit for your efforts and | | | | made if you are catering to a particularly large or |
| your customers will not be happy if you try to | | | | small event that differs from the norm. |
| increase your prices in the future. | | | | By adding your event costs and a proportion of |
| To be able to command a price that is | | | | monthly expenses you will then have a figure that |
| considerably higher than fair market value you | | | | represents the total cost of the job. A reasonable |
| must have either an outstanding brand reputation | | | | amount of profit can then be added on and this |
| or an amazing salesman or saleswoman who can | | | | will give you the total price that you can present |
| close a deal at a price level higher than the | | | | to the client as your quote. |
| market will typically allow. | | | | Once you have been in business for a while and |
| The first step is to gather as much information | | | | you get a better understanding of estimating |
| about the event as possible, such as how many | | | | costs. Easier methods can be adopted such as |
| people are expected to attend and then to | | | | quickly calculating a price per head and making |
| calculate all of the costs that you expect to be | | | | adjustments for the variables such as the quality |
| involved. Your costs will include food and | | | | of ingredients or of the size of the meal. |
| beverages, labor costs of your employees and | | | | When you are just starting out you can always |
| any equipment that you have to hire for the | | | | ask your competitors to give you a quote for the |
| event. Don't forget to allow for a small charge for | | | | same event that you are estimating a price for. |
| the use of your own valuable equipment. | | | | By doing this you can make sure that you are |
| When calculating your total labor costs don't | | | | close to market rates. |
| forget to allow an hourly rate for your own time. | | | | Catering business estimating, pricing and quoting is |
| The next step is to work out your costs on a | | | | a real art that takes time to perfect. Getting your |
| monthly basis. These costs could include rent, | | | | pricing right can really make or break your |
| equipment rental and depreciation, vehicle | | | | business so it is worth putting some serious time |
| expenses, insurance, utilities, advertising and any | | | | and thought into it. |