Melbourne Accommodation Apartments - How Pricing of Catering Job is Done

The following pointers might help you in ensuring you have everything you need before you plan for the sourcing of ingredients and supply of food. Before starting with the catering preparation and pricing, if possible, you need to get all the information about the event. There are some important things to consider, before you sit down to put up a menu and put a price against each menu item.

) Etc; whether there will be on-site catering, transportation options, place of the event (how far from your catering location, ✔.

Starting time and duration of the event ✔

Expected turnout of guests ✔

Guest preferences (if any) ✔

Gather Competitive Intelligence

You can now begin your own estimation and arrive at a competitive pricing, equipped with the upper and lower limits of pricing in terms of market rates, thus. You have a good yardstick so as not to quote lower than the norm, while determining your own pricing strategy, in addition. You can be sure that you're not going to quote above the market rates, with this knowledge. This can be achieved with a few phone calls to some of the local catering companies. The best way to begin with the pricing estimate will be to scout the market rates for an event of a similar nature, once you have the above information.

Factors to Consider During Cost Evaluation

The following factors must be considered to arrive at the break-even cost. It would be a loss-making proposition, otherwise. That is you must at least make as much money as you would spend, so that you know how much you need to quote to be able to at least "break even", you need to determine how much you will end up spending. You need to evaluate the costs thoroughly before fixing the price, if it is your first venture into the catering business.

Some dishes will make sense only if there are a good number of guests. The high cost of ingredients may not add up to a reasonable pricing, if you're going to serve gourmet food for very few guests. Chart out a "feasible" menu, * As per the number of expected guests.

* Calculate cost of your food (include cost of all ingredients for the dishes in your menu and the labor cost).

And cost of employing extra helping staff, cleaning products, ice, gasoline, propane, utility costs including that of equipment, * Extra costs include transportation costs.

Etc, insurance, you may have to include rentals, * In case of on-site catering.

Thumb Rules

Include this in your costs. * Always include 10% extra food than required to manage contingencies.

Then the menu price would be $30, if a menu item costs a total of $10 to prepare, for example. * It is customary to fix the menu price at three times the total food cost.

You may negotiate or choose your own margin percentage, * Depending on whether your customer is price-sensitive and how much your own desired profit margin is.

* Refer to your competitive rate research information to finally judge your own desired profit percentage.

How to Price a Catering Job

Profits would be determined also on a platter basis, in this case, needless to say. Check if this model suits your catering assignment. Do this for each menu item and charge the customer on a "per-plate" basis or platter basis, you would assign a price to your menu item, fixed Pricing: With fixed pricing. As follows.1, pricing can be fixed in at least 3 different ways.

This can be a very cost-effective model provided there is a great turnout of guests expected. For greater than 100 guests you could charge $18 for the same item and so on, for greater than 50 guests you could charge $20 for an item; for example. You can have 3-4 such tiers with the minimum number of guests deciding each tier price. Lower will be the price of each item, more the expected turnout, essentially. Tiered Pricing: This is very similar to fixed pricing but you can pass on the benefit of numbers to your customer. 2.

It will enable you to approximate the estimates better. It is still beneficial to have a pricing guide ready for reference even for custom pricing, however. You have the freedom to decide the menu and pricing after the customer briefs you about all the details of the event, with custom pricing, however, the customer knows upfront what your charges typically would be; customized Pricing: With the earlier methods. 3.

You may well have to incur losses in your first few assignments just to prove your worth and establish your presence, if you're very new to the business. You may have to provide additional "frills" to add value and differentiate your catering service from that of your rivals. You may have to negotiate harder so as not to lose the deal, if you have your close competitors quoting below your rates, on the other hand. Customers may not be very rigid about lowering your prices, if you're well-known for the quality of food. Your immediate competition in the same area and how established you are in the business, there are many other factors that influence pricing such as the type of customer. You will in fact need to be flexible if you're serious about being in the business for a long time. It is just information about how pricing for a catering job is done. The above guidelines for determining the pricing for a menu are not stringent.

You will be able to predict and manage most risks and contingencies better and plan everything in a cost-effective manner, with some experience. Only experience can help you find your foothold in this industry, once you start your catering business. Etc, weather delays, many unexpected challenges may arise in the form of lesser than expected guest turnouts or shortage of food during service. Take each assignment as a challenge and be willing to learn from your mistakes as the catering business is certainly not for the faint-hearted. You will gradually work out the pricing strategy that is optimum for your catering business, . Etc, your client base, once you know your market. Keep an open mind and be optimistic about the outcome. The ultimate profitable pricing strategy is a mix of several factors, thus.