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Unread 06-09-2013, 07:26 PM   #9
acguy
Got Wood.
 
Join Date: 05-01-11
Location: Santa Cruz, Ca.
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Next to "how much food should I cook", I think "what can/should I charge is the most common question on this board.

I have 30 years of working with P&L's for contractors all over the country and they all ask the question: what should I charge. Rules and formulas are the same.

First, what you CAN charge depends on the market saturation in your service area and, how you brand your product. Biggest mistake here is to sell your product based on price alone. Ideally you want to charge more but get it because your worth it to the customer.

What you SHOULD sell your product for depends on your food costs and overhead costs. O/H should include items like equipment depreciation, vehicle use, etc. We all know the 3 times food cost pricing method. Start with that and work backwards. After some experience, you can determine a "gross profit dollar per hour".

If you understand those figures, you'll find out that the per person charge will change depending on how many your serving in the event. Smaller events might require a fee while larger events don't. You can have more confidence in your pricing and bidding. And, most importantly, you'll leave the low profit stuff for your competition.

Ultimately you want to see what your net is. (normally pre-tax net profit). This number is normally low to start with. After a couple years, it should be at least 10%-12%. If it's less than that, you might want to rethink continuing.

I could write a book or two. This is only some really broad strokes.
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