Re: How to price for food.....just starting out

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Posted by Gerard on May 27, 1997 at 16:10:38 :

In Reply to: How to price for food.....just starting out posted by BOOH on May 02, 1997 at 16:34:35 :

: I need help in determining how to price for food, I have
: read some books, but the food that I cook is mostly foreign,
: some american dishes and have no idea as to what is the best way
: to price the food. I have sold several cakes for $10-$15 each cake.
: I don't know if I'm cutting myself short either. Please let me
: know any other input you may have to make my catering more successful.
: Thanks.

Hi, I run a small bakery, owned a restaurant and ran a catering biz in the past. Its not important if your food is foreign, the money is american right?
You have to establish cost, second ; don't allow cost to go over 30 percent of sales and third you must have sufficient volume to achieve critical mass, as Sherry said in her reply to you the small cataering jobs cost as much to do and you make less money.

One cake sold for $40 is not as good as 20 cakes sold at $15.
I estimate set up time for different projects and products to be around 65percent Timewise, so whatever you do has to be in sufficient volume to overcome set up cost .
(not to be confused with food cost).
For example in my bakery I don't bother baking a batch of cakes unless I can do at least 30 in the batch otherwise I'd be doing them every 2 days which is not profitable.
If you're operating from a home kitchen you can fudge a bit as the overhead is low but if you want to end up in a commercial setting don't take the free rent for a given.
Sherry has given you great advice, I found all the same things to be true when we ran our little catering firm.
A couple of bugaboos we found was stay away from renting equipment, if you don't own it you're undercapitalized and underequiped, don't get into catering jobs that get you way in over your head. Grow a steady rate, its safer.
Oh yeh and don't hire waitstaff or you'll be getting a stuck with all the employee taxforms, insurance, liability, risk and workmans comp which runs WELL into the thousands$$$$$.
If you do a party requiring waitstaff you can provide the penguins but instruct the client its their responsibility to pay the directly, that way you're out of the liability loop and off the hook should one of them burn the house down.(you NEVER know)


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