Posted by John Maxwell on July 19, 1997 at 22:54:42 :
In Reply to: My problem too... posted by Sherry on May 03, 1997 at 09:27:37 :
: I've been catering for 8 years (out of my home) and that is still the biggest problem I face. When it comes to cakes, pies, etc. I charge around $20-22 for cheesecakes and other cakes from $15.00-$20.00. I don't really know how I come up with that but I usually figure someone would have to make $2.00 and Up for a piece of cake in a restaurant.
: My business luncheons seem to only work out to 3 1/2 times cost, but when I do cocktail parties (I only do the finger foods--no booze) I sometimes make 6-9 times cost.
: I don't like doing small parties anymore because it just doesn't seem worth it--as much work as larger party but not near the profit.
: I would love to talk to anyone else who caters from there own homes (we don't have the overhead) I'm sure that makes a difference in markup.
My business is a little different from those being discussed. I have a shop but I don't do any retail business. I do parties and events. I precost total menus not individual recipes. I submit proposals based on profit not on food cost. I maintain a minimum inventory and each event is priced uniquely to insure my profit margin. My clients cannot order "one from column a and one from column b"
For "just starting out", Don't wory about how your price compares to others. Make sure your price is a good value and you'll do fine. Here's my formula:
Logistics(including rentals)+Labor+Overhead(my average month's bills not counting cost of goods divided by 30 and then multiplied by the numbber of days I need to work up a party+2 times food equals my selling price.
L+L+OH+2F=Selling price
Have fun, its a great business.