New Business Start-Up

Discussion in 'Professional Catering' started by stcchef, Nov 9, 2015.

  1. stcchef

    stcchef

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    Good morning chefs.Iam currently starting a new company starting January 1st 2016. I am trying finish up my pricing chart . Any suggestions on how to price dinner parties & classes. In the past ive done an hourly charge and grocery charge for the total event.
     
  2. fkc yangon

    fkc yangon

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    Good question, that's a difficult one and I think the hardest part of any catering business.
    For me it depends on what food you are serving, then I work out a cost for all including staff, then look at the profit margin. For me where I am it usually is about double of what the cost price is.
    But you have other things to factor in like extra time or extra waiters or other things which may add up on top.
     
  3. jonathan norris

    jonathan norris

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    Pricing will depend on your menu.  I take it you have a business plan complete with estimated food costs and labor costs?
     
  4. jimyra

    jimyra

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    I'm fascinated by the fact that very few seem to evaluate their costs at all!

    For me the rule for pricing is very simple:

    PRICE = COSTS + PROFIT DESIRED

    COSTS = Labor (including your own, if applicable) + Food + Utilities + Rent + Licenses + Tax reserve + Insurance + any other costs of doing business, including interest, depreciation, and all the hidden costs.

    PROFIT DESIRED is up to you, what return on your investment do you want?

    IMHO, if you do not know your costs, you are only guessing at prices, no matter what mathematical exercises you may go through and, if you are real lucky, you will still be in business a year from now.

    When dividing by a food cost percentage, I sincerely hope you have at least ten (10) years of records for the actual food cost percentage for your operation with your menus, otherwise you have a better chance simply guessing.

    Oh, once you've figured your price, it is simple to calculate $/person or $/piece or whatever, just remember, the fewer persons, the higher the $/person, only food cost and part of labor can be attributed to the number of people, the rest is overhead and somebody pays for it.

    This is from another thread.  It sums it up very well.