some advice on my new business plan please

Discussion in 'Professional Catering' started by bonesdilligaf, Apr 17, 2012.

  1. bonesdilligaf

    bonesdilligaf

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    Hi folks,

    I've gotten some great information and advice from this forum since I found it, so I am hoping some of you can chime in on my new plan. I am unfortunately hampered by where I live at the moment, and have had to put my eventual plans of opening a rest in FL on the back burner for now. Basically, I cannot sell my house without losing over $200k in the present market. My first inclination was to open a catering company so  I could get feedback on my menu items. Unfortunately i live in NJ.... With all the health department requirements, and the stricter zoning laws in my county it is price prohibitive. Some rules have changed, some long time catering co's have suspended operations because of it. So that idea is done...

    sorry for being wordy, but I know the more info, the better the advice.

    type of food-  Open Fire Cooking....

    not exactly BBQ, though I offer 7 different types of BBQ, I also cook over fire pits with a kettle, full fish fry's, pig roasts, crab boils, low country boil, soups.... as well as a full compliment of family recipes for Hungarian classics.

    so I am marketing myself as a PERSONAL CATERER / PLANNER

    I am planning to offer my services to the clients at a starting flat rate cost of

    $200.00 for small dinners for 2-10 people

    $400.00 for parties of 10-25 people + 1 staff member

    $500.00 for parties of 26-50 people + 2 staff members

    negotiate for larger parties.

    additional staff at $200.00 per staff

    additionally the client will be responsible for all food costs, and equipment rentals if any.

    we will do all prep and cooking at the clients house or location of the event, this meets with health dept requirements.

    I will plan all menus with the clients, and advise them on the party itself... direct them in the planning. Depending upon the menu, I can either solo or require the staff I will need, and charge accordingly. I will also be able to add misc charges for sauces and dry rubs and spices that I will make ahead of time or supply so there will be no loss there.

    I think that includes everything...

    what do you all think? thanks in advance for your opinions

    ~Bones~
     
  2. petemccracken

    petemccracken

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    As someone who has operated a similar business for the past 12 years, you may want to re-examine your price numbers (a trifle low, IMHO), though your structure is pretty solid.

    If you haven't already, make sure you:
    • get certified as a Food Safety Manager (Serv-safe, NRFSP, or equivalent)
    • carry liability insurance
    • comply with the business license requirements in your area
    • consider joining a trade group such as American Personal and Private Chef Association (APPCA), they can be a great help in the business aspects
     
  3. bonesdilligaf

    bonesdilligaf

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    Thanks,

    I am Serv-safe, setting up business now so insurance calls are made, license is pending review. I will check out appca

    now as to prices... how am i off? and how much?

    starting out as i am, i was thinking i wanted to be pretty price conscious, and also present a rather low starting point that will allow for lots of upgrades, and up charges...
     
  4. petemccracken

    petemccracken

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    You can always lower prices, give discounts for a variety or reasons, make special deals, but it is very difficult, IMHO to raise prices.

    Secondly, add-ons can be the death of a business, /img/vbsmilies/smilies/laser.gifno one likes to be nickel and dime to death.

    Know your market and avoid being the $$ store caterer/personal chef, you WILL go broke.

    Think: Say a party of 50, the MINIMUM at a restaurant would be what, $1,500-$2,500, more??? Study your market. Do your market research, develop your marketing plan, know your competition, avoid $/person and stick with $/gig.

    Think: A small dinner party for, um, 10. How much time will you spend for planning, shopping, cooking, cleaning up, transportation, say 10 hours, are you willing to work for $20/hour?

    My MINIMUM fee is $350 and I live in a rural town of 55,000 people, ag based.
     
  5. bonesdilligaf

    bonesdilligaf

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    thanks,

    think I didn't really add enough for the shopping/planning bit.

    I was going to have add on prices depending upon the meal itself...

    ie a slow smoked entree that takes 8 hrs to prep/cook vs something that takes 2-3 hours prep to table.

    but I do like your idea of discounts vs add-ons

    people always love to think they got a deal.

    I will put some pens to paper and recalculate my minimums

    one question for you Pete, (ok I have more than one...) do you think I should always use an extra person as a minimum, and charge accordingly; or continue to make that an option?
     
  6. petemccracken

    petemccracken

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    For me, staffing is NEVER an option for the client! It is MY business and I decide what staff is required to maintain MY level(s) of service!

    The client has input on what, but how is under my control.
     
  7. bonesdilligaf

    bonesdilligaf

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    sorry, I think i phrased that wrong...

    I was originally thinking of working solo for smaller parties 2-10 people for a dinner for example. Obviously depending upon the menu. But now after some of your advise, i am rethinking working solo at all, and always making it a minimum 2 person crew. This way, I am able to raise my minimum pay dramatically with just the extra body. I pay my staff $20.00 per hour with a 5 hour minimum, and charge $200.00 per staff member netting me an additional income stream. This also allows for me to keep staff for an additional 3 hours if needed without going into my pocket. I pay them an additional $10 per hour over 5 hours...

    I don't want to price myself out of work, but like you said, I don't want to price myself into the bargain basement either. And knowing how nice it would be to have that extra set of hands and eyes during a service would be, I am thinking of adding in the price for one staff member to all the packages, therefore killing two birds with one stone.
     
  8. petemccracken

    petemccracken

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    Employees mean Social Security, MediCare, FUTA, SUTA, SDI, and Workman's Compensation. This can mean something on the order of 20%-30% increase in personnel costs. Are you really sure you want to go there?

    If you do have employees, then you do NOT call them out in your pricing, IMHO.

    Many PCs utilize independent contractors, paid by the client, and in this case, they are billed separately.

    The questions you are asking really emphasize why you need to join a trade organization that has been through all of this or work for someone to gain the experience.
     
  9. bonesdilligaf

    bonesdilligaf

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    they are not full time employees, rather subcontractors so they 1099.

    they will be covered under my umbrella for the insurance at no extra costs to me.

    And its no different IMHO than when I had a DJ business, and sold a two man team or solo gig. They are there to support me in any capacity needed. It also allows me to make sure that my team is familiar with how i do things and what i require of them. Any time I relied on a customers people there were always problems. Biggest of which is who they work for... when I cook they all work for me... Not the client...

    besides, this is really the point i guess, I will be in charge of the party planning with the client. I will hire the servers / bartenders / valet , and especially my kitchen staff. The client pays me, I pay staff. Otherwise I could be short staffed at any point in the party.
     
     
  10. lentil

    lentil

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    Just catching up after being away from this forum for quite some time, but I'd like to add something here.  I don't believe that you can hire staff and direct them and still call them contract employees.  I tried to do that at first and was advised against it.  What if someone cut themselves or slipped and fell while working a job with you?  Would they be covered under thier own insurance policy or would they even be required to have a policy.  It is my understanding that you would be liable for any injury they sustained.  It is expensive to have employees, but it's more expensive to be caught not paying the proper taxes or workman's comp.  You'd just have to build those costs into your prices.