Bidding for catering jobs requires that you carefully evaluate your numbers based on your business needs and market conditions. Knowing your expenses and desired profit for an engagement will help you determine whether you can make a competitive proposal. Once you know you can, you’ll need to create an attractive presentation, one that tell tells your potential customer that you provide not only excellent food but also superior service and an overall memorable experience.
Run Your Numbers
Review the proposal from the potential customer. If necessary, ask for more specifics, including number of attendees, type of food desired, exact time of the event, what serving equipment you’ll need to supply, if the customer has a budget in mind, the demographics of the guests, and what the host’s goals are for the function. Calculate your total food costs for the party based on the number of people who will be attending. Next, determine your non-food production costs, such as labor, equipment rental and decorations. Add in a production expense cushion based on your history of cost overruns with previous functions you’ve catered. This might be an additional 10 or 15 percent, based on your estimate. Determine how much of your company overhead to apply to the engagement if you want the function to help pay off part of your annual business expenses. Overhead expenses are those related to running a business, such as marketing, insurance, phones, website and licenses. Finally, decide how much profit you need to make from the engagement to make it worth your while.
Evaluate the Competition
Check out what other caterers are offering and their prices. This will help you determine if you want to underbid them to get the job or charge a higher price to create a perceived sense of superior quality. Determine the full range of services your competition offers so you can sell against them. For example, one of your competitors might charge a lower price per person for food but not provide delivery, setup or on-site service.
Decide What You Offer
If you can’t be competitive offering all of the services your client wants, you might still put in a bid, recommending another service provider, such as one that provides waiters, bartenders or food-serving equipment. The price of using two companies might be cheaper for the client than using your full-service competitor, or your client might prefer your menu and prices enough to arrange for the other services you can’t offer. Consider offering to handle non-catering services, such as a bar, music and decorations, even if you have to contract these out to another company. This will make you more attractive to a time-strapped or inexperienced client. Think about providing benefits rather than just food. This can include convenience, affordability, full-service engagements or a theme that will impress attendees and reflect well on the host. If you work with florists, photographers, DJs, bartenders, limousine companies or other party vendors, include any discount coupons they offer your clients.
Create Your Presentation
Develop your bid, starting by presenting the benefits you offer. A client might be more willing to pay a higher price or accept slightly less service if you start by convincing her your bid will make her event more memorable. Present your menu, and how it will be delivered, served and cleaned up. List the staff you will provide, any extras you offer -- such as entertainment and decorations -- and a diagram of the room with your setup. List your overall price for the event and your price for each additional person served. The price per additional person should be based only on your food costs and desired profit if you will have no more production costs, such as labor or serving equipment, to feed those people. The price of your initial bid should cover your production and overhead costs. Offer to lower or increase the price per person based on menu changes the client can select.
Make Your Pitch
Write a brief cover letter that teases your client with the broad strokes of your bid. The cover letter should make the client want to read more. Reiterate the goals the client gave you and make it clear from the start that you will be able to meet or exceed all of the client’s needs. Tell him you are enclosing a bid that will help him solve the problems he has or obtain the benefits he wants. Avoid giving your price in the cover letter so that the client focuses on the fact that you can meet or exceed all of his goals. Offer a tasting engagement to the potential client. Include testimonials from previous clients. Provide a contract that stipulates the guaranteed dollar amount of the contract, the date you’ll need final guest numbers, your cancellation policies, the amount of deposit required and the final payment date. Offering alternatives to a client’s request can position you as a helpful expert. For example, a plated dinner served in courses takes longer but allows people to interact more -- unlike a buffet, which often results in a short dinner.