Sales Debate with my wife.

[Lake Dogs]

I cant seem to find the spread sheet, but I did find some totals that I sent to her. The pork costs were very similar to yours. I added in cost for fuel, injections, rubs, foil, plates, and we had a little cost in tater chips...

Final/Total Cost Per Plate:

20 butts, sell 280 sandwiches $ 2.50

18 butts, sell 252 sandwiches $ 2.55

16 butts, sell 224 sandwiches $ 2.65

14 butts, sell 196 sandwiches $ 2.70

12 butts, sell 168 sandwiches $ 2.85

10 butts, sell 140 sandwiches $ 3.00

8 butts, sell 112 sandwiches $ 3.25

6 butts, sell 84 sandwiches $ 3.70

4 butts, sell 56 sandwiches $ 4.50


I had factored in my rub and injection, foil (because I foil them and rest them), fuel for the smoker, ice to ice down the butts in transportation and until we begin the cook. You can tell, with only a few butts the overhead/fixed costs hurt...

A real cost that's not in this is the cost of the left-over unused things. If you have extra buns unsold, and cant sell them tomorrow (for example), that cost gets factored back into the whole. We save and use the extra meat, so there's no costs there... Look to whatever else is like this. Extra un-used sauce perhaps? Spillage? There's costs in this.

[HBMTN]

I do get what you guys are trying to say and when I go up north or near the city I see the prices like you all are quoting. But here in rural VA $7 for just a pork sandwich would not fly. We charge $0.50 for a slaw topper to go on a sandwich and you would not believe how many people want it but won't go for that. I will try to take your advice and maybe raise the price a little at a time and monitor sales.

[BigBellyBBQ]

go in real simple terms. Start with out anything...and go to an event...I know this is all bs however it is a real eye opener...To go to an event for the first time what would you need? Considering your cooker is all prepped and ready to go, insurance paid etc..just all your supplies..and write down the amount of time it takes you to round up also..Now take ALL the items your require to make the sales for the day and you will see the numbers are in the area of Lake Dogs notes and alot more. yes you will have some supplies left over HOWEVER you have to pay for them! Sysco or Rest depot require a check and then I have to front the money..Charge what ever you want, however when it is good stuff, you will not hear complaints about price..

[BigBellyBBQ]

quick example...I left the house at 8 am to pick up 12 butts and 10 briskets. So the time has to be factored in. Arrived back home, made some coffee and started to prep meats, make injection, split a few pieces of firewood, change out a propane bottle (my southern pride has propane assist), make a batch of rub and place in cooker..It is now 130...Now I start making sauces , which are just blended comercial, prep for party for next day and clean up...I finally sit down about 330 and have a beer..reload firebox about 6 and pull out at 11..put meat in electric fridge (electric another bill) to prep for serving the next day, as the meal will consist of 250 1/2 of chicken and 350 pork or brisket sandwiches...but the point is to make 350 sandwiches I put in several hours and I still cant serve...so how much is your time worth? I know I am slow!!

[BigBellyBBQ]

quick example...I left the house at 8 am to pick up 12 butts and 10 briskets. So the time has to be factored in. Arrived back home, made some coffee and started to prep meats, make injection, split a few pieces of firewood, change out a propane bottle (my southern pride has propane assist), make a batch of rub and place in cooker..It is now 130...Now I start making sauces , which are just blended comercial, prep for party for next day and clean up...I finally sit down about 330 and have a beer..reload firebox about 6 and pull out at 11..put meat in electric fridge (electric another bill) to prep for serving the next day, as the meal will consist of 250 1/2 of chicken and 350 pork or brisket sandwiches...but the point is to make 350 sandwiches I put in several hours and I still cant serve...so how much is your time worth? I know I am slow!!

[HBMTN]

I'm with ya BigBelly and I feel like my time is worth more just like you are saying. What has me scratching my head is that it seems like the posts on this thread as a majority say I am charging too cheap. Yet all the research that I did before going in to business 4 years ago along with what I have seen here and in books I have read is that the food cost (food ingredients only) should be 25-33% of the cost of the meal and cost x 3 gets you in the ball park. If this is incorrect or an outdated formula, is there another that you all use that is better? Or what formula do you use to say $7-9 for a sandwich? Just trying to learn here, so please don't take this wrong. If I can get by with charging more I sure believe what I am doing is worth it.

[marubozo]

Originally Posted by HBMTN

I have read is that the food cost (food ingredients only) should be 25-33% of the cost of the meal and cost x 3 gets you in the ball park. If this is incorrect or an outdated formula, is there another that you all use that is better?

The 3x or 25-33% food cost formula is a baseline number to ensure you're profitable, not how you come up with your maximum sale price. If you can keep food costs at around 30% or lower, you're almost sure to make money at the end of the day. But that in no way should be used as a cap for how much you charge. You should charge what the market will pay.

Now if your market can only sustain a $5 sandwich, then that's what you should charge. But without testing, or knowing the market, who knows, maybe you could sell just as many at 6 or 7?

[Hawg Father of Seoul]

When I was in food service I knew that at 29-32 food cost some one was being wasteful and found the source every time. below 24% some one was recycling too much or being a little tight fisted with portions.

Takes a lot of work to get a menu that tight, but makes managing SO much easier.

[bizznessman]

Originally Posted by marubozo

The 3x or 25-33% food cost formula is a baseline number to ensure you're profitable, not how you come up with your maximum sale price. If you can keep food costs at around 30% or lower, you're almost sure to make money at the end of the day. But that in no way should be used as a cap for how much you charge. You should charge what the market will pay.

Now if your market can only sustain a $5 sandwich, then that's what you should charge. But without testing, or knowing the market, who knows, maybe you could sell just as many at 6 or 7?

I believe what we are all trying to say is to find out what your true total costs are. A lot of folks will overlook what they believe to be incidental food costs (sauce, rub spices, injections, etc). These add up over volume and eat away at profits if not calculated in. Also be sure to track ALL of your operating expenses (napkins, cleaning supplies, catering travel costs, equipment maintenance, etc). These can also eat away at profit, based off of retail prices, if not known up front or controlled throughout operation.

And marubozo is spot on by saying that the 2-3X formula is only a baseline to start out with. And his statement about "what your market will sustain" is very true. But don't sell yourself short. Try bumping the price a bit and see what the result is. If you lose a few sales but the increase in gross exceeds those losses then you are not at your max price yet.

Bottom line there is not set formula. Use the research you have done, the advice given by others, test your market and find out what works in your niche.

[BigBellyBBQ]

before I roll out in the morniing, I tracked Friday and I paid myself 25 per hr (yeah right) on paper and my helper... I have 2.92 into 350 sandwiches..and these still have to be transported with cooking trailer, at 10 mpg and served...but the biggest thing is to get what you deserve and serve a honest good sandwich for a fair price...Yesterday I had to stop at mc d's for my helper and me to grab a maintenence meal...it was 12 bucks for inferior food...but I paid it..so I have a good feeling asking a fair price for my real cooked meal that takes all night to get ready not slam ..bam..ding burgers ready!!

[acguy]

A few years ago we were vending tritip sandwiches. Price was $7. We weren't real thrilled with the result. Two weeks later we decided to cut the sandwich in half and raise the price to $4. Sales increased about 10%. Could be lots of reasons for the increase. Best example I could think of.

[PanamaExpat]

Originally Posted by IamMadMan

They say there are two theories to arguing with a woman.....
... Unfortunately neither one works..

Works even less if your wife happens to be a lawyer.