How does a caterer set pricing?
December 13, 2010 12:41 PM   Subscribe

Any caterers here? How do you figure pricing?

This may seem like a dumb question, but my wife is trying to figure out how to appropriately bill someone for a small catering gig. Obviously, the bill has to include costs + time, but how much is time generally billable for these days? Does mileage come in to it? What exactly is and isn't included in this calculation? If you've had snacks catered in the past, how much did you pay, and for how many?
posted by Gilbert to Food & Drink (9 answers total) 3 users marked this as a favorite
I'm not a caterer, but I've had to contract quite a bit of catering, and my sister's done catering for years. In my experience, catering is billed at a cost per head, with whatever's necessary built into that price. So you figure your cost of food, prep, travel, and overhead, and tack on your desired profit margin. Most caterers set a minimum order (minimum 10 people, etc) so you can better figure that your contract's priced correctly. You can always add a flat rate trip charge if the event's a significant distance away.

But really, if you need guidance on the catering business, call the catering manager at your local country club or big fancy hotel in January, when they're done with their holiday party season and a long ways away from wedding season. I'm sure you can find someone who'd be happy to give you a hour of their time to pick their brain.
posted by litnerd at 12:50 PM on December 13, 2010

I've worked with a catering team in the past. It's per person pricing + money for the serving if it is an event. She typically billed from 10 dollars per person to 20 I believe.
posted by lakerk at 1:05 PM on December 13, 2010

Just to clarify: the order is for some party snacks to be dropped off. These are not full meals or anything that needs to really be maintained. Basically, it's just some sussed-up shortbread for 100. This is for a holiday party, so talking to a caterer next month is not an option. Does per-person still apply in this case?
posted by Gilbert at 1:37 PM on December 13, 2010

Not a dumb question because there are literally a million ways to figure this!

For example, some clients are comfortable getting a per person-type estimate, but these inexpensive rates are more feasible for restaurants and deli's to provide because their overhead and labor is already covered by the standing operation. For going concerns like restaurants, catering gigs are mostly a maximization of the kitchen's output capability. Your wife doesn't sound like she is in a position to cost her work on this model. Frankly, your wife will be more expensive for the client to hire than picking up a party platter from Bennigan's. If she break's down her billing using the per-person model, your wife might severely underestimate her true labor and supplies costs to seem competitive. She could end up making nothing and doing the gig for cost, which is not ideal.

For something small and informal, your wife is better off picking an hourly rate for herself, then guessing how many hours total she'll work, estimating her food and supplies (always overestimate this figure slightly), plus incidentals (gas, etc.) - then she just adds it all together and that is her best guess figure. She can present the estimate figure and request half the amount up front for the gig as a deposit (this is why it's smart to overestimate food costs slightly - once she's locked into her estimate, that extra $$ covers any shortfall in the estimate. Usually, the shortfalls are in the food costs.)

She can figure $20 to $30 per hour for her labor, depending on how intricate the prep is. She can go as low as $15 per hour if she doesn't feel she can command more for her services. Catering is lots of work though, even simple gigs, so I try not to go less than $20 per hour. Again, once she makes a quote... she puts in the time regardless. So if her estimate bills for 3 hours labor, and she then ends up spending 3 hours in the kitchen + an additional 4 hours driving to buy supplies... she's still (somewhat) covered if she's estimated and charged a decent hourly wage for herself.

- I never include how many hours for labor in the final estimate that is presented to the client. It's just "Labor = X amount" on the client version. Ditto the food costs.

The simpler the breakdown on the final estimate, the better for the client. In a real sense, the client is paying your wife so they don't have to think about these details themselves. Accommodate the client by not bogging them down with the details unless specifically requested.

- That said, your wife's estimates and ToDo lists should be hyper-detailed and should bank extra $$ or time whenever possible. She'll also do well to call ahead to stores and reserve whatever she needs in advance (special cuts of meat, 10 packages of doilies, etc. etc.) It is the holiday season and stores sell out of stuff all the time. She will save time and money by phoning ahead to confirm availability and reserve needed items.

Oh. One last thing... There is a rule in catering and kitchen work that states, "Any job expands to fill the time allotted."

When planning the gig on paper, she should over-estimate everything, but when it comes to executing the gig, she should scale all of that back and try to be as quick, frugal, and efficient as possible. If she does it right, the whole thing comes off pretty easily and her efforts/costs should be more than covered by what she actually billed the client.
posted by jbenben at 1:38 PM on December 13, 2010 [2 favorites]

My husband's a chef. Catering does usually bill by the head, but if she's providing cookies for 100, then I'd bill by the dozen--at a price slightly higher than the fanciest bakery, but not insanely so. I wouldn't include mileage on the bill--that looks sort of amateurish, I think. I see places on the web that sell 12 cookies for $10 and a dozen for $30.
posted by Ideefixe at 1:48 PM on December 13, 2010 [1 favorite]

OP - just saw your update. She's dropping off trays of cookies?

Then she could she bill per tray, and she lets the client know that "1 tray feeds X number of people." If she is dropping the trays off a considerable distance, then she includes a flat fee for the delivery.

Again, the client really doesn't want to know the hyper-detailed breakdown, just the final costs.

Into your wife's price per tray, she must (behind the scenes) calculate the ingredients cost, labor, baking supplies, etc. etc. She should go to a restaurant supply and price out the cost of nice looking disposable trays in her area (she'll be leaving those w/ the client I assume) and any other incidentals she wouldn't normally need if she were making these cookies for herself or a friend.

Again, what looks simple on paper is usually way more complicated and expensive to execute when you are doing it for 100 people. Even cookies and snacks.
posted by jbenben at 1:54 PM on December 13, 2010 [1 favorite]

I would go for a formula like: (materials x 3) + hourly rate + delivery charge. Used to use that in a small restaurant that did catering and deliveries some years back, and the x3 was what we needed to cover wages during prep, use of space in the restaurant kitchen, etc.
posted by Cuppatea at 4:12 AM on December 14, 2010

Sorry, should clarify - the 'hourly rate' in that formula was if someone was going to be with the catered food serving it, eliminate that if you're just dropping off. And unless you know the people well, get a deposit. You'd be surprised how many people call to cancel just when you're loading up the car (or worse, when you get there. As if you can take the food and just sell it somewhere else!).
posted by Cuppatea at 4:14 AM on December 14, 2010 [1 favorite]

The gig went off as planned, the client was happy, and even asked about additional jobs, and whether the Mrs. had a web site (as if). We ended up using Cuppatea's costx3 formula, which got us paid reasonably for our time and for delivery. Thanks, y'all. This was extremely educational.
posted by Gilbert at 9:50 PM on December 20, 2010

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