Knowing how to price your catering services is an important skill. You should charge enough to make a profit but not too much that people feel like they are being overcharged. If you have trouble with this or just don't know where to start pricing your catering services, here are some tips for you.
It's essential to go over the menu with your client and ensure that ingredients are appropriate for them. You can ask otherwise, but it is better if you get feedback beforehand-in order not only do they enjoy their meal more so there aren't any complaints later down the line.
Prepare a detailed list of ingredients with their cost and add up the total bill. Usually, caterers try to make about 20 percent of the total. Then, figure out how much a person will plus factor in the cost of appetizers and dessert.
You should also calculate how much supplies such as disposable items, napkins, and tablecloths will cost you. Lastly, include the cost of chairs or chafing dishes in the final bill.
It's important to factor in how many guests are attending your event when determining the final cost. Guests who don't show up or RSVP will have a negative impact on pricing, so be prepared for these changes with policies that include guarantees and protections.
You need to figure out how much you're paying for overhead before considering any events when pricing catering services. These include things like electricity and gas and other business-related costs that don't directly affect an individual event at hand.
For example, marketing expenses or the cost of providing security in case something goes wrong on site (i.e., accidents). Once these figures have been determined, set your pricing accordingly to cover all of these spending and expenses.
It's time to consider how much your labor will cost you for that specific event. Add in the cost of servers or any assistants who work for the event, and then figure out an hourly wage to ensure there is enough money left after paying their wages.
You need to add up the fixed expenses and then multiply the per head charge by the total number of people. Sum up these two numbers, and you will get your final price for the job. Lastly, add your profit margin.
Now, add a reasonable amount of profit. Determining the right amount of profit can be complicated, especially if you are new in the business. Here we recommend you to look at market standards and seek help from the industry standards.
Or you can also set a profit percentage, for example, a 25 percent profit margin, or you can set a certain amount. Similarly, you need to consider the client's budget and try to remain within those boundaries.
Looking for an ideal way to increase your business? Maybe you are wondering what other businesses in the area are charging. We can help! Pricing services is not an easy task, but experts at Fairly Even can make it as simple as possible for you. Contact us today, and let's get started on pricing your service costs!