Posted by Carl Jones on February 12, 1999 at 18:41:24 :
In Reply to: prices posted by Johnnie on February 10, 1999 at 18:17:35 :
: I would like to open my own catering business and am
: having trouble figuring out what to charge. Do you do
: a certian markup on an item. I can figure a single
: serving price at my cost but do not know how to figure
: what to charge. Please help.
Hi Johnnie :
That is something we all have to figure out almost daily, "what to charge" The answer is, charge as much as the customer is willing to pay!
A general rule of thumb is food cost X 3 or 4...... That will usually take care of your prep and cooking labor, overhead and a decent profit.
If I were in your shoes, I would find out what everyone else is charging in your market. Take advantage of the fact you are not very well known yet and go shop the other caterers. You can pretty much assume that their prices are based upon some research on their part.
You have to be aware of customer shock. The idea here is don't charge significantly higher than the meal would be in a comparable restaurant. You can justify about 20% or 25% higher, since you are catering to a smaller group and the fact that you are bringing it to them!
Dont hesitate to charge for service staff, rentals, etc and even add a 15 - 18 % service charge to the total.... if you can get it, get it!
Just make sure you are making more money in the long run than if you were working for me. Otherwise, come to work for me and eliminate all the downside risk! :)
Good luck!
Cheers,
Carl