# Question....



## marcbjohnson (Feb 4, 2008)

Although I list myself as a professional caterer, honestly, I am just starting out. I have catered two events, one a Christmas Party, and I just catered a Super Bowl party. In just starting out, things don't always work as planned. I need to ask some of the vets a question or two.

(1) How is the best way to come up with an amount to charge the client? (2) I do a lot of my work out of my home kitchen, which is generally not encouraged. I certainly don't like it because it is my home kitchen, not my business kitchen. I don't want my favorite foods, mixing with the catered goods I have in the fridge (Mexican and Chinese don't mix...LOL). Does anybody have any knowledge of where to rent a commercial kitchen, and do you have to have a license in order to rent one? Lastly, (3) How hard was it for you all when you first started out? What were the most common mistakes, and how long did it take you all to really get in the groove of things?


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## bughut (Aug 18, 2007)

Hi Marc,
I reckon that makes you a caterer. Good luck for the future. Let us know what you did and how it went. Were you happy with the results?
1.I know there is a formula for working out your prices, but I tend to use common sense more. For example When I first started out, I called all my competition pretending to be a prospective client and asked them to send me their price lists. - No point pricing yourself out of the market if you're in the same kind of niche market.
After that, you calculate all your running costs and split it per item you'll have a pretty good idea of the price you should be charging. And it's not carved in stone you can adapt later when you have more experience.
I just realised before Christmas that i was actually selling my curry lunches at not much more than cost. I called the relevant clients and explained my boob letting them know the cost has more than doubled. No problem. Phew!
2. I started out in my home kitchen and it was awful, But you just manage. Stores get mixed up with household stuff, but it works out. Years ago my son started up a fruit salad tub business from home. EHO would have had a hissy fit. His girlfriend certainly did.
3. When i look back on the early days, i sometimes cringe inside to remember the disasters. The biggest lesson i learned was PRACTICE PRACTICE PRACTICE I cant emphasise enough. Dont ever think it will just work out on the day. If you've never done it before, try it out on everyone you know and even neighbours you dont know. Everyone likes free food.
Most of my business is business/board room lunches and i've learned to listen (mostly but not always) to the office managers when they know what their guys want. In general I'm given a budget now and "just feed us cos we like what you do"
Finally I had 2 false starts with a couple of months in between jobs. I was making mistakes and thinking the clients would eat what i made them. I discovered I had to gain their trust first. ie. give them what they want then when they like you, introduce your special stuff...Bingo.
Hope i havnt gone on too much Marc, I do tend to sometimes.
Wishing you all the luck in the world


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## marcbjohnson (Feb 4, 2008)

Thank You BugHut...I appreciate the encouragement. After this last catering event...the Super Bowl Party...I just wanted to give up. It was the second time I was late for the client, and I hate that. That can be the "death blow" for a caterer. Luckily, my fiance' has been encouraging and told me to keep on working it, and like you, things just don't happen overnight. I am unfortunately, one of those people who are born with the "perfectionist gene", and when things do not go the exact way I want it, and the way that the client wants it, I almost consider it a failure. The client was happy, although they did not my tardiness. That being said, they even gave me a $100 tip. Still...people deserve to get their food hot, and on time. It's good to see that others, like yourself, went through such issues when they started out.

Quick question...since you are writing from Scotland, what is the real deal opinion of your native son, Chef Ramsay? Do you all think highly of him, as we do in the U.S.A. Myself...I am a HUGE Gordon Ramsay fan. I think he is one of the few "celebrity chefs" that actually can cook, and cook really **** well. He has hurt himself, in the sense that he has almost made a parody of himself, with all of the yelling, cussin' and fussin'. Still...he is perhaps one of my favorites. He's awesome.

Again...thank you for the support, and I hope to hear from someone in the DC Met Area on locations of commercial kitchens and if you have to have a food handlers license to rent one. Thank You.


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## brooklynchef (Nov 26, 2007)

Congratulations on getting started. It is really daunting to go out on your own - so pat yourself on the back. As far as being late for the event. DO NOT DO IT AGAIN! I learned my lesson the hard way, as I think many probably do. Best to tell your client that you will be at the event between 2 hours and 1 1/2 hours before guests arrive to set up. And, also, assure the client that if you are running a little late, not to worry, that food will be ready by the time guests arrive. There is nothing worse than a nervous client when you arrive. As far as cooking out of your home, many caterers, ones on this site, will tell you that you absolutely should not, under any circumstances do it ever. The truth is, however, that it often is the only way to get started. Of course, because it is illegal, you are taking a calculated risk. A whole lot of really highly respected caterers get started cooking in their home kitchens. Every local health department has a course you can take to get a food safety certificate. This will not make your home kitchen legal, but take the class, pass the test, and adhere strictly to the rules of hygiene that you learn. Set up your home kitchen, as best you can, to be as sanitary as possible. Buy a mini-fridge that you can plug in when you are prepping an event so that you can take your home personal food and put it their to use your main fridge as your catering fridge.

Be organized - super duper organized. Make lists. Make your shopping list on an excel spreadsheet listed by the stores and wholesalers you may shop at. Make prep lists - neatly and clearly list for yourself when you can prep what and where and how to store it. Get as much done early as you possibly can. Make packing lists so that you are not running around like a chicken with your head cut off at the last minute before leaving your kitchen. 
By wholesale when you can and when the size of your events warrants it. Find a Jetro or Restaurant Depot in your area. You need a Federal Tax ID number to join. If you do not have one, incorporate, and get one. Take small steps to getting legit. It may take a few years to grow and get truly comfortable - but stick with it.


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## bughut (Aug 18, 2007)

Some great points there Brooklyn chef. Took me back...(Cue flashback)
I never even considered prep sheets and packing check lists when i first started. You think you're going to just remember everything. Then at the last minute the panic sets in and you think the whole world is conspiring against you.
He's right you know Marc you do have to be totally anal about lists and clip them up, rather than have them lying about getting lost. We have metal shelving all around the kitchen and magnetic clips for the many lists needed for each job.
Luckily, in the uk working from home isnt illegal, just an environmental health nightmare. Much stricter . Mind you, I didnt register the business back then so i was spared their visit. They never knew

How are you sourcing your clients?

I started out with cold buffets and no hot food, Much easier i think. Aiming at the working lunch market. ie. staff meetings, training days etc. Word got round and they started using me for their parties weddings etc 
Just a thought.

To echo Brooklyn chefs point... Don't be late...EVER ...Always take a cell phone contact number too, just in case you do get stuck in traffic.


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## alongcame (Sep 24, 2007)

You asked a question we're all finding or have found out on our own. Contracts, contracts contracts! Get it signed, set expectations, agree on rentals, prices, menu, you name it, write it down, nothing can be missed. Create your checklists, mark off every little thing down to spoons and toothpicks, trust me!

I started off catering cocktail parties and I still do, working more into full weddings, BBQs, anniversaries, birthdays, etc, etc.. My passion is with the artistic portion of working with food, but in the area I live the market is quite low.

SOOO.... this summer I am focus on selling my product at a farmers market to try to gain potential weddings and large events, not so much focused on individual food sale. I also work a fulltime job on top of all of this and believe in steady slow growth with perfectly happy clients and consistently developing new appetizers, menus, designs, etc.. for my learning curve and shaking things up for clients.

It's worked quite well, as for pricing, figure out what its worth to you and charge what you feel you are worth. You can call around for generalities, but if you are talented you will be worth what you charge regardless.

Best of luck,
Colin


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## foodnfoto (Jan 1, 2001)

Marc, you are getting some good advice here and I hate to be a killjoy, but by working out of your house without setting yourself up as a legitimate business with appropriate permits, licenses and insurance, you are opening yourself up to huge liability. One small, inadvertent mistake and you could lose your house.

What if, God forbid, you made some delicious meatballs, and during the process of transporting them, they cool off and sit at about 100 degrees for an hour or two before anyone eats them? Then, as a result everyone at that party gets food poisoning and one or two of them report it to your local health department? The next thing you know, inspectors are swarming all over your house and slapping you with all kinds of fines. The next day, a lawyer serves you with a civil complaint from several guests and you must pay all their doctor bills, lost wages, punitive damages and on and on.

Here's another scenario I witnessed first hand-a restaurant owner (who had not been paying his liability insurance premiums) catered an affair at a very wealthy person's home. The chef had chafing dishes set up on an imported antique Italian dining table circa 1750. He was dumb enough to set sterno cans under the chafers, but directly on the wooden table, burning 8 round circles into the surface of the table. He was sued by the client for damage to the table-estimated at $50,000. Since his liability insurance was not up to date, he had to pay out of pocket and never recovered. He lost his restaurant and put 40 people out of work.

These are extreme cases, I know, but they are just small examples of the minefield of risk you face as a caterer. There are very good reasons for the system of business permits and licenses that are needed to own a business-they protect the business owners and the public. I know it seems daunting and expensive when starting out, but it assures us all that we won't be harmed by less than honorable business owners. If this is the work you really want to do, take a job (part time, if you also work another job) with a legitimate catering business and learn the ropes. Then when you know the ins and outs of running this type of business (not just preparing the food) write a solid business plan, gather up some money and strike out on your own. You have a much better chance of success than learning by trial and error.


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## foodnfoto (Jan 1, 2001)

Regarding your pricing-

-this statement is way to vague to be of much use.

Caterers generally need to make about 70% gross profit (that is all the money you make after subtracting the cost of food and used up materials). Gross profit covers the costs of utilities used, pay to yourself and employees, fees, taxes, cost and maintenance of equipment etc. etc. To figure out what to charge, first figure what the costs of the items you are offering to your clients are. This includes all you raw materials and the cost of disposable trays, plates, napkins, cutlery and anything that does not come back to your kitchen. Once you have that dollar amount, divide by .3. The result will give you a figure to charge your client. 

For example-
Lets say you are catering a box lunch for 10 people. You figure out that the cost of the sandwich, drink, cookie, piece of fruit, box, napkin, decorative ribbon, logo sticker and carrying bags amounts to about $2.50 per person or $25.00. Dividing $2.50 by .3 gives you a figure of $8.33 or $83.30 for 10. It's a weird number, so round up to $8.50/person, or even better, if the client will agree, $8.99/person. This is price you charge to make sure you are making a decent profit on your goods and services. That little extra profit you make is good to have on hand in case you drop a box or have an unexpected loss-known in the industry as "shrink". It's just a little cushion that can save you in the end.


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## crispjacket (Feb 17, 2008)

First off, Good luck in your new venture!

Catering, especially in a small scale operation, is a very touchy-feely kind of business. The major problem being, how you distinguish yourself from all the other small scale operations out there. As with all business ventures, word-of- mouth is absolutely the best advertising you can get and furthermore, you just can't buy it, it has to be earned.

Another problem I've found is small caterers in their haste to fill up their client stable, bite off a little more than they can chew, consequently jamming production schedules, tightening timelines and reducing the overall quality of their products. Of course, the ability to have key people freelance for you is always a good thing, but in the height of high season (May - July and October - December) it is virtually impossible to get the staff you want, unless you pay higher than average wages.

The formula that was given to you in the above post is actually a Profit Margin formula, using .3 gives you a profit margin of 30%

Profit margin is a ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings.

I'm a little lost in the economic side of things, but that's basically a way to watch your food cost / profit ratio closely. .4 is a better number i think

hope this helps...

Crisp


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## cbabcock (Feb 21, 2008)

Hi everybody I'm about as new to catering as Marc up top is and I'm a little curious about a couple of things as well. FnF you are listing the hazards of working out of your home kitchen on the side and they are all quite valid. The one thing that I don't get is if you are just starting out and you don't really have the means to do everything by the books what can be done? I agree with what somebody said about taking the food handlers course so you have that under your belt. 
So let's assume that I know how to handle the business end of this and I understand how to cook everything but I don't have a pro kitchen and I don't have the money to go out and buy some space. Is it a good option to try and rent some space in somebody elses kitchen. Wouldn't they typically be using it when you would need it also? And if you do want to rent a kitchen then you need to have the credentials so how do you get licensed and insured are their prerequisites to doing that? Also how do you pass the cost of renting that space down to your customers and still keep your prices competetive. Sorry I'm rambling with questions now. I guess what I'm getting at is basically if I am starting from scratch and don't have a lot of money to put down how do I do it legally w/o cutting corners that can get me in trouble?


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## foodnfoto (Jan 1, 2001)

Crisp, I think you may have the wrong end of the stick here. *Dividing* your inventory costs (also known as food costs, but should include non-reusable supplies) by .3 gives you a Gross Profit margin of 70% from which you can determine the actual retail price you will charge for an item. After you subtract all those other inherent costs that are so difficult to calculate per item (utilities, wages, taxes, equipment, rent, insurance etc), then you have your actual profit.

Cbabcock-
I know starting out is difficult and difficult. The best way, IMHO, is to rent an approved kitchen then when you are well established, build your own. That way, you will know exactly what you need as your business expands. There are many sources for such-one that people overlook are church kitchens. Churches love to get the extra dollars by renting their kitchens when not in use. There are also rental kitchens maintained for just that reason-to rent to caterers and such who don't want the ongoing costs of maintaining a permanent facility. They usually rent on an hourly basis. Another member here at ChefTalk recently posted pics and their website that promotes their kitchen and its policies-though I can't remember their name.

Start up costs are daunting and it's very tempting to start in your home. I just think it's very risky and why would someone risk loosing their home or paying exorbitant fines just for a small mistake? Go ahead, if you must, but legitimate caterers that you compete with will frown on the practice and some would do what they could to sabotage you.

Also, don't you want to present yourself as a real professional to your potential clients? The public generally views home caterers, such as they are, as Susie-homemaker types, and will try to take advantage. Is the low-ball customer who you really want as your client base?

You need to approach this with a calculated, well formulated plan. Otherwise, you'll work your knuckles to the bone and loose money in the long run.


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## cbabcock (Feb 21, 2008)

Thank you FnF you made some very good points. I just want to start off by saying that I have not advertised myself to the public as a caterer nor have I collected any profit from supplying food out of my kitchen. 
My cousin and I are currently figuring out whether or not we can hack it in the catering industry and have decided to work a family members bridal shower for 50 and another family members christening for 35. These are small time and we are only getting reimbursed for the cost of food. The way I see it is that this is non-profit between family and it is no different than me bringing over lunch for a cookout at my parents house and them paying back the cost of food to me. What we plan to do is have the word spread that we made the food and that we are looking to start a business just for a little word of mouth amongst the guests. Also we are going to use this to test out how well we can handle the organization and execution. When we get done with that we will be looking into making it a legit business. 
I joined this forum today to see what people in the business are doing and how some things work. So far after some reading it has proved to be very helpful and intimidating.
You know one of the things that I am having trouble figuring out is how much food to bring. For instance the bridal shower is supposed to be a brunch/tea party and the bride's mother wants total control over the menu and doesn't care about the people that like any kind of variety. Her menu is:
Quiche (our call on what kind to make)
Baked Ham (she thinks its cute doing ham and eggs)
Chicken Salad Sandwiches (mayo)
Seafood Salad Sandwiches (mayo)
Potato Salad (mayo notice a theme)
Fruit Salad
Garden Salad (noticing another trend here)
and a couple of Stuffed Breads for the people that don't like mayo.

So how should I go about determining how much of each item to make for 50 people?


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## foodnfoto (Jan 1, 2001)

Babcock-
It's great that you are testing the waters with doing parties for family. They can be a lot more forgiving under the circumstances that you describe. Just be really careful to handle, transport and serve the food safely so that no one on the guest list gets a case of food borne illness (very easy to happen with poultry and mayo products.)
I wish you and your cousin all the luck in pursuing your idea.

Figuring out how much to serve is a very tricky business. You must balance your cooking talents with client wishes and all kinds of other variables. These variables include the nature and location of the event, the time of day, the guest list and how much time is alloted to the event. Consider who the guests are-a party of men will eat more than a party of men with their wives and girlfriends. A party of all women will consume even less.

Although most clients want a huge variety of items for a buffet, it's best to limit the offerings so that the menu isn't confusing, redundant or have clashing flavor profiles. In addition, the more items you make, the more time you must spend in preparing them and the more you must charge. I usually used a formula of 1 menu item for every 10 people, plus 1. So if you are serving 50 people, serve 6 different items. Under 40, maybe add 2 extra items to round out the menu. Of course, if you are serving 200 people, you don't want to offer 20 different items, just go back to 10 or 15 and prepare enough for every one to have some.

For finger foods, I figured 1.5-3 pieces of each item per person, again depending on the crowd. Bridal shower?-stick to 1.5. Football team, plan on at least 3 per person. For a combination of main courses (your quiche and baked ham) plan on 1 serving of each per person (1 slice [10 servings/9" pie] quiche and 3 ounces ham) plus 1.5 pieces pp of finger sandwiches and the like. For garden salad, plan on about 1 cup per person or less as it's awkward to eat at a party and ladies don't want drops of salad dressing on their pretty dresses.

Don't let folks here at CT intimidate you. There's a huge amount of wisdom and experience offered here. You can really get some valuable perspective on your ideas and most of the folks here are really, really nice.


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## cbabcock (Feb 21, 2008)

Great thank you that was a good brief run down of serving sizes. I suppose that is something that you get a feel for over time. I appreciate your thorough and prompt response.


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