What do I charge???

[Perfect Rack BBQ]

we are going to start cooking at peoples cookouts this year and are wondering what is the norm to charge when people ask... I have heard food cost x 3, charge per person, charge by the pound....not sure what to do here. Can anyone help?

[Mad About Que]

when you say cookouts? like backyard grill party where you come in and cook? or...? couple things you need to do is cost out EVERYTHING...spices, foil, pans, fuel (wood/charcoal), plates, etc... know what your actual is and then you can look at what to charge. when i first started catering, i did it by huncks of meat.. a butt was $30 with a pint of Hawg Sauce. that sucked. firing up the big pit for $30. then i switched to Per Person. www.madaboutque.com you can see what we used to charge up until last year. costs got too high and i didn't want to raise prices. so we basically shut it down for a while.

the other biggest cost is your time. figure out how much you want to make to make it worth your wild. if staying up all night cooking, then delivering and serving/cleanup is worth something, then factor that in as a MINIMUM charge. we used to do $300. now it would have to be $1000 unless your family.

yes.. cost times 3 is a good figure for a food cost deal... thats where most restaurants shoot for. to stay competitive, be prepared to go to a little better than double the costs. also, we did slaw as an auto side for the plates. read that as cheap side #1. that way i didn't get screwed with mac and beans (my two highest cost items due to my recipes/ingredients)..

start small. make a lot of notes. keep in mind you can rent equipment if you get a big job. dont' do a wedding until you are sure. thats one that you don't want to screw up. also, there was something else,, but i lost it.. hope it helps

[Mad About Que]

oh - PM me your email and i'll send you a catering planner that will help answer your question. and the other issue is okay, they've asked and i've told them $XXX. now, how much do i need PLUS 10%... (bad to run out..really bad...) remember my post about the wedding? yeah, not good to run out with the FOTB is paying you and doesn't get a full plate.. ouch. then got home and found another pan of meat burried in the cooler the wife had been putting empty pans into.. grrrr.. that 12 pounds cost me $200... i still give her crap over that... =)

[Motley Q]

Suggestions from a former food and beverage director of a hotel management company. Our costs were figured monthly.

If you run food costs at 33%, you are high.

If you run double, or 50%, you will be out of business in no time.

Food cost % (beginning inventory + purchases - ending inv) = food sales

If you charge $1000 and food purchases cost $300, your food cost for the event is 30%

You calculate the food cost % by the net sale.

If you can run food and labor costs at about 65% of sales, then you can run a successful business.

If you don't know your costs and how to figure and maintain them, you are in trouble

Unfortunately, catering has relatively low margins compared to other food service businesses.

As madaboutq does, charge by the person and charge a minimum, know what your total costs are, and be competitive.

[FLAQUE]

35% labor cost= This is a good taget but he could probably run a lower labor cost for bbq catering.

[HBMTN]

Food cost x 3 is a good starting point. From there you need to factor in all of your cost of doing business along with what your competition in the area is charging. You also need to take in to account the cost of all of your required licenses and health dept fees etc. Once all has been consider that will give you a better idea of what you need to charge.

[Bama Q]

All of the above are dead on right. It's tough.. If you have a competitor that low ball everything, poor service, lack of food for the job or bad quality. That's hard to deal with, until they burn out. Don't try to under bid them on a job that you will lose money on. Keep a fair price( of your area) Sell your self, Quality, Service and Product. Be proud of a fair price, Do a Good Job. Word of mouth will get out. People talk. especially if you are in line waiting to get served and there isn't enough food to feed the last 10 people. I always send a little extra, just to be sure.
Good luck
Big Jim

[SouthernMagicBBQ]

Take cost + $1.00 x 3 = amount charged. On cheaper items you can use cost x 4.

[Motley Q]

From some of the answers to his question I can see why caterers go out of business so easily.

[Bamabuzzard]

Originally Posted by Motley Q

From some of the answers to his question I can see why caterers go out of business so easily.

Even when a catering business is run the right way it is a tough business. Food business in general, be it a restaurant, catering gig or a hot dog stand, is a tough business and highly competitive business.

[Hawg Father of Seoul]

I don't mean to be a wet blanket, but this is a backwards approach to running any business.

Research your market. What will the market tolerate? Then you can tell if you can adjust your food cost to that mark or if it the venture is even viable.

Run it like a business or call it a hobby.

[HBMTN]

Originally Posted by Hawg Father of Seoul

I don't mean to be a wet blanket, but this is a backwards approach to running any business.

Research your market. What will the market tolerate? Then you can tell if you can adjust your food cost to that mark or if it the venture is even viable.

Run it like a business or call it a hobby.

This is true, look at places like Pizza Hut, they probably have $1.50 food cost but still sell a pizza for $12-$14

[Rickybobby83]

Originally Posted by Hawg Father of Seoul

I don't mean to be a wet blanket, but this is a backwards approach to running any business.

Research your market. What will the market tolerate? Then you can tell if you can adjust your food cost to that mark or if it the venture is even viable.

Run it like a business or call it a hobby.

True! I'm a business banker by trade and that's one of the biggest issues I see with small businesses. Their prices are so low they literally starve their profit margins. It's not a question of what you should charge, but what your clientele will pay.

I you go out to say Famous Dave's and order something and the total bill is like $50 bucks. You didn't eat a whole brisket, chicken or slab of ribs, but just a portion.

You can choose to charge higher and do fewer gigs, or charge lower and do more gigs. O maybe somewhere in between. An easy way to test this is to do a small market test. Deliberately set 3 different pricings and see what gets the most response. Or ask your clients what they think. Also a good opportunity to see what you can do better.

Not sure how serious your plans are (don't mean in any negative way), but if you're trying to turn it in to a business with minimal overhead/startup I recommend reading the $100 start up by Chris guillebeau (sp?). Just my opinion good luck, hope this helps.



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[Bamabuzzard]

Researching your target market is vital. Who are *you* wanting to sell to? The answer to this question will point you to your pricing structure.

With our business (BBQ Sauce & Cajun Pickles) we decided upfront we did not want to market our product to those who want BBQ Sauce for $1.50/jar. We wanted to market our sauce (and other products) as a premium product. Something worth paying a premium price. So we tested the market at small trade shows and found the "market" had no issue paying our asking price. Sure, we had a few who'd make comments like "I can go get a bottle of Kraft for $1.50/bottle." We would kindly tell them then that's what they needed to do. We aren't targeting that market. Those who are looking for cheap prices first then quality.

So after we established our target market we were off and running!!!

[jestridge]

I don't do it for a business but when I do I usually charge 3x the market price