Cook nailed it. You've got to learn about "food costs". In a well run food business (not high end gourmet with deep pocket investors) you need to stay under 30% food costs.
Example: if your ribs run you $6 per slab you must, at a minimum, charge $18 per slab. Some markets will support more. You have to build in your raw costs, production costs, and a fair wage or you are just playing around.
Pulled pork and such are a bit more difficult as are "plates" served in a sit down or carry out place. With pork, for example, you need to know your average cost per pound of raw meat. Then you must know your waste or what's called shrinkage. How much weight do you lose from cooked off fat, thrown away bone, thrown away fat, and just cooked out moisture. For my pulled pork I figure about 40% waste and over the years this figure has been pretty spot on. The percentage will vary depending on how you cook, whether you use bone-in or boneless pork, and not least how you pull and prep the product. So, for me that comes out to about $8-$9 per pound out the door carry away cost. I usually pack in 2# "quart" bags.
Brisket cost is figured the same way as is chicken, sausage, etc. You've got to know your food, prep, and cooking. I spent a few years managing for a full kitchen, all food from scratch cafeteria company. I spent a lot of my early training figuring and learning about food cost.
Then comes production cost. Your cooker, truck, trailer, pans, knives, etc. aren't free. Yeah, you can write them off because you already own them, but when replacement time comes around momma is going to want her Kitchen Aid mixer or food processor back and in her kitchen! Again, if you aren't figuring these costs into doing business you are just playing around.
Trying to do friends a favor is not business. I still "cater" for friends and charge less. I've got a wedding rehearsal dinner coming up. I'm delivering 20# of pulled pork, vacuum packed, and loaning a chafing rack and pans. I'm charging $9 per pound. I'll make some money,but it's chump change. However, it will recover about 1/2 the cost of my newest electric smoker. So, it helps pay for my toys.
I gave up competition when I could no longer work my little catering business. My catering, along with my initial $10K investment, allowed me to buy my big cooker and a lot of supplies. I catered to support my competition. My partner and I, Tim aka The_Kapn, split costs for several years. When I changed jobs where I couldn't cater as much and money ran down in the "kitty" I did a couple more with house money and quit.
I know food and the food business. I've never opened a full time catering business or restaurant because I've always been under-capitalized and had a family to raise. I'm reaching a point where my wife makes enough (more than me for several years now) to go back to the food business. However, unless something really fortunate occurs like a good partner or hitting the lotto I'll be cooking for someone else and letting them sweat the cash flow.
It's not easy. There are several good books out there on starting small businesses including restaurants and catering companies. Also, some Brethren own businesses and are willing to advise. But, they are not going to make decisions for you. Do your due diligence - gathering this information is tough work. I'd love to spend a week with BigMista out in CA learning from him about doing his farmer's market circuit and how he has parlayed that into his own brick and mortar kitchen.
Good luck and keep asking questions. Read and ask small business around your area how they make their decisions.
