How to Determine Catering Prices

Determining accurate and fair catering pricing will require organization, research and flexibility. Catering pricing effectively is crucial to the success of catering businesses. Low catering prices may attract customers but could end up costing you money in the long run. Pricing that is too high can turn customers to your competitors. Taking the time to accurately price catering services will ensure that your company is profitable and your customers are charged fairly.

Instructions

1. Research your competition. Since your customer will certainly check your competitor's pricing, so should you. Look for areas where you can have an edge over your competition. For instance, you may want to consider throwing in extras such as linens and set-up fees for free. Stating that certain services are free will attract customers.

2. Decide on a pricing option. Some common options are fixed, tiered or custom pricing. Fixed pricing is when each menu item has a fixed per person or per platter cost. Tiered pricing is where you discount your fixed item prices for larger parties. Custom pricing is when you design and price a catering job after hearing all of the details.

3. Calculate your costs. Add up the cost of your food as well as your labor, equipment and hidden fees. Hidden fees could include the price of gasoline, ice, propane, laundry, sternos, gloves and cleaning products. While it is tempting to set yourself out to be the lowest priced caterer in town, it is important to have a precise and accurate knowledge of how much money each event is going to cost you. Otherwise you will not be able to stay in business long-term.

4. Set a desired net-profit percentage. If you want to make a 50 percent profit you will need to mark up your costs by 50 percent. For instance if you are catering a brunch with a dozen muffins, 2 gallons of orange juice and 2 dozen bagels with assorted cream cheese, and your total food and labor costs are $70, then charge $105.

5. Finalize your prices. Create a price guide that will aid you and your customer. Having everything in writing is crucial to the organization and effectiveness of your company. You will want to ensure that you and the customer are on the same page.

References

• Food Service Warehouse: Pricing a Catering Menu
• Dietary Managers Association: DMA Practice Standards Dietary Department Catering

Resources

• Read this Article in Spanish