# Costing food to sell to a restaurant



## marrey25 (Nov 8, 2016)

So I have a catering business and I was approached by an owner of a small restaurant that offered to buy some of my food to sell at his restaurant. I know how i price my things for a catering event but how much should i charge him for it? would it be the same that i would charge for normal catering?


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## Pat Pat (Sep 26, 2017)

I don't know how you do your pricing when you cater, but for me, I sell the food at retail price; then the restaurant usually add a 20% markup for plating up the food.


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## cheflayne (Aug 21, 2004)

For normal catering, I assume you figure in wait staff costs, etc. If any of your standard costs, such as wait staff etc. don't figure into this scenario, I would back them out.


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## lagom (Sep 5, 2012)

I would charge are much as the market can reasonably bare, keeping in mind the long term revenue flow and the ability for the restaurant to recover a profit. However don’t sell yourself cheap.


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## redbeerd cantu (Aug 7, 2013)

The standard pricing scheme for a business is that the food cost be around 30% of the price, which would cover the cost of the ingredients, the labor to produce the final product, and provide you with a profit.

For instance, looking at the attached food cost worksheet, you'll see that each portion of tapenade cost $0.88 to produce. If I were to have my food cost be 30% of price (30% profit margin), then I would charge $2.93 per portion.

Pricing is relative to the product being sold. For instance, beef would have a very thin profit margin, as it is difficult to charge three times the price of a raw steak, unless one is running a high-end restaurant.


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## chefbillyb (Feb 8, 2009)

This all depends on how much food is involved. This is going to be difficult to accomplish without someone getting screwed. Most likely it will be the customer be over charged. If you have a 25% food cost and charge him another 25% markup then his food cost would be 50% on the items he buys from you. I would do something like this with the least amount of labor I could. You can't expect to make the same amount as you would for a retail catering sale. You are really more of a cooked food wholesaler for him to sell retail. You would also have to think about any overhead and taxes you have to pay. This may not be worth your wild but, you need to understand that his restaurant needs to resell your food at a reasonable price to make this venture feasible. Lets say you have a Chicken Cordon Blue dinner for catering and sell that for $18 per person. There is no way he could resell that meal for $31.50 and make the same amount of profit in $$$$$ as you do.


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## redbeerd cantu (Aug 7, 2013)

chefbillyb said:


> This all depends on how much food is involved. This is going to be difficult to accomplish without someone getting screwed. Most likely it will be the customer be over charged. If you have a 25% food cost and charge him another 25% markup then his food cost would be 50% on the items he buys from you. I would do something like this with the least amount of labor I could. You can't expect to make the same amount as you would for a retail catering sale. You are really more of a cooked food wholesaler for him to sell retail. You would also have to think about any overhead and taxes you have to pay. This may not be worth your wild but, you need to understand that his restaurant needs to resell your food at a reasonable price to make this venture feasible. Lets say you have a Chicken Cordon Blue dinner for catering and sell that for $18 per person. There is no way he could resell that meal for $31.50 and make the same amount of profit in $$$$$ as you do.


And this is where ethical practices come into play...


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## Pat Pat (Sep 26, 2017)

chefbillyb said:


> If you have a 25% food cost and charge him another 25% markup then his food cost would be 50% on the items he buys from you...Lets say you have a Chicken Cordon Blue dinner for catering and sell that for $18 per person. There is no way he could resell that meal for $31.50 and make the same amount of profit in $$$$$ as you do.


That's not the case with prepared food. The restaurant that buys from you will save a bunch on labour and utilities, so the cost of your food will not directly translated into the restaurant's food cost.

If I sell my food to the restaurant for $18 and make a 10% profit, the restaurant can plate it up and sell it for $22 and make a 10% profit, while also covering other costs associated with serving the dish.


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## cheflayne (Aug 21, 2004)

Bottom line is that it is your responsibility to watch your bottom line and the restaurant's to watch theirs. Of course you need to keep in mind that your decisions also affect your gross. So consider the effect that your decisions have on the bottom line of the restaurant before making decisions that effect your gross.

_I think I understand what I just typed_ :~)


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## Chef Rizo (Mar 28, 2018)

redbeerd cantu said:


> The standard pricing scheme for a business is that the food cost be around 30% of the price, which would cover the cost of the ingredients, the labor to produce the final product, and provide you with a profit.
> 
> For instance, looking at the attached food cost worksheet, you'll see that each portion of tapenade cost $0.88 to produce. If I were to have my food cost be 30% of price (30% profit margin), then I would charge $2.93 per portion.
> 
> Pricing is relative to the product being sold. For instance, beef would have a very thin profit margin, as it is difficult to charge three times the price of a raw steak, unless one is running a high-end restaurant.


Tried to look at the file you kindly posted and keep getting an error  I have seen a previous post of yours you mention having an exel sheet for costing. Any change I can get a copy of these? Thanks!


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## meezenplaz (Jan 31, 2012)

Well the way I look at, it since you're the one doing the work, providing the food and the cooking, its basically your product, with the restaurant acting as a middle man, or your distributor if you will. 
And the middleman cannot reasonably expect to make the same profit as they would were they producing the product themselves regardless of what it is. 
My suggestion is to try to figure out what kind of an increased volume you'll be getting by doing it this way and cut your profit little bit accordingly so that you can pass it on to your distributor , the restaurant. 
This way your profit margin will still remain viable, due to the increased volume while still making it worth the restaurants while to use you--sacrificing a bit of profit, for the savings in time a labor to him. 
This savings gets passed to you largely, he still makes some and the price to the customer is still
reasonable, if not cheap. And one way to soften that increase a little bit is to offer something that is exclusive that no one else is offering. In which the sky's the limit....use your imagination.


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## redbeerd cantu (Aug 7, 2013)

This consideration of reducing your profit for the sake of establishing an ongoing relationship is valid. I didn't consider it when I posted my reply.


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## meezenplaz (Jan 31, 2012)

redbeerd cantu said:


> This consideration of reducing your profit for the sake of establishing an ongoing relationship is valid. I didn't consider it when I posted my reply.


Well thanks, maybe that's what I'm HERE for--to take up the slack!


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## panini (Jul 28, 2001)

redbeerd cantu said:


> This consideration of reducing your profit for the sake of establishing an ongoing relationship is valid. I didn't consider it when I posted my reply.


Just me, but a consideration of a price reduction for the sake of an ongoing relationship, translates to an ongoing price reduction.
I'm not really understanding this whole thread. You are a plate up caterer, and this restaurant wants to sell your food?
What are they expecting? Plated food, bulk food, ?? The OP needs to decide if he or she wants to enter the wholesale market. A lot of pro's and con's come along with this decision. My first thought would be quality consideration. If you've grown your catering business on food quality, than I'd be leery about attaching my name to a product another vendor is going to be responsible for.
I can go on. I've been in both markets for a bit of time.


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## cheflew (May 23, 2016)

panini said:


> Just me, but a consideration of a price reduction for the sake of an ongoing relationship, translates to an ongoing price reduction.
> I'm not really understanding this whole thread. You are a plate up caterer, and this restaurant wants to sell your food?
> What are they expecting? Plated food, bulk food, ?? The OP needs to decide if he or she wants to enter the wholesale market. A lot of pro's and con's come along with this decision. My first thought would be quality consideration. If you've grown your catering business on food quality, than I'd be leery about attaching my name to a product another vendor is going to be responsible for.
> I can go on. I've been in both markets for a bit of time.


I agree here. If it's something like baked goods or pastries, there is a bit more leeway as they do not go bad as fast. If they are speaking about entrees or maybe buffet items, now it goes into if the restaurant is holding them correctly etc.

You may want to look into providing it for them if they agree not to give out your name? But that could also be detrimental is someone may really like your product so you have to take that into consideration as well.

It's not so cut and dry as allowing someone else to use your products and they may mishandle, you might get a bad name and your reputation / business could be completely destroyed.


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