I must be missing something? (Comps in the area)

I am just about 30 days out from getting my trailer and 60 days out from hitting the pavement and wheels rolling. All my business licenses have been acquired, Cook for Hire statement, Catering permit, and just waiting on the trailer for a county inspection to get my Limited MFF permit.

My wife has been working on my website and I figured it was time to see what others are charging in my area......and personally I was surprised. I really had never given it any mind because I have done my own food costs and I always went with what I was comfortable with based on the profit. I would be curious to see what your honest opinions are. I have cooked for friends parties as a "gift", I have done large cooks and small cooks for the past 7 years, so I know all the work that goes into it. However I also know the food cost and overhead going LEGAL. Tell me what I am missing here?

I quoted 3 places, all of them are the same "part time" weekend BBQ caterers in the area. They do not cook legally at a commissary even though they may have a commissary contract with the county. None of them are full-time restaurants or food trucks. Drop off to you or pick up from them.

Pulled Pork Slider bar for 20-25PPL
With fixings (Slaw, BBQ Sauce, Rolls)
2 Sides- Mac & Cheese, Baked Beans

Business 1 - $396.41 (Tax and gratuity not included) W/Tax $421.13

Business 2 - $461.25 (Tax and Gratuity not included) W/ Tax $497

Business 3 - $425.18 (Gratuity not included)

My food cost for this exact order is:

Pork 13.2 LB @ 1.52= $21.62
1/2 pan Mac Cheese = $18
1/2 pan Beans = $8
(50) Rolls = $6.50
Slaw = $5
(1) 24oz BBQ Sauce = $12
2lbs charcoal = $2
8 wood splits = $5
Rub $1/oz = $2
Total = $80.12
(I even include .05 cent plastic tongs, I get them for free)

Why am I happy selling this for $225 or even $275? Especially if I have a few of the same orders, say I sell 5 of these packages for Superbowl.

@ $225 that is running at 35% food cost
@ $275 that is running at 29% food cost

In a restaurant I always wanted food and labor to be less than 22% but that is really not possible with small business BBQ catering. 28-35% has been my goal.

BBQ is expensive I know but $497 for 25 ppl for a slider bar & sides, Drop Off and No setup? That is $19.88 per person. That is how much I charge for tri tip & chicken + 3 sides and COOK ON LOCATION with my towable smoker/santa maria.

sudsandswine said:

Sale - expenses * [whatever taxes are probably 40% so .6] / # hours required = $/hr is why

Click to expand...

Tax is 7.75% here.

sudsandswine said:

Sale - expenses * [whatever taxes are probably 40% so .6] / # hours required = $/hr is why

Click to expand...

Okay I see what you are saying.

My numbers:
sale $225 - $80 Expense = $145 x .6 tax / 10 hr cook = $8.70/ Hr. is what I am paying myself per hour :laugh:. Which in CA it is now $15 minimum wage.

However my competition
sale $497 - $80 Expense = $417 x .6 tax / 10 hr cook = $25.02/ Hr.

Bbq Bubba said:

First mistake is not figuring your loss on your pork.
Are you making your sides or scooping them out of a bucket?
Fresh sides are way more than your pricing.
slaw for $6???
You don't charge for wood, foil, etc as that comes out of your operating cost.
At your pricing, you won't make it a month in the biz, especially in Cali.
Know your food costs and triple or quadruple to end up with a fair price.

Click to expand...

Hey bubba, thanks for the reply

I make all my sides myself. I have food cost sheets broken down to the teaspoon on seasonings and ingredients for my entire menu.

My mac and Cheese is $17.67 for a half pan

My slaw is cabbage directly from the farmers market and it costs me $2.50 in cabbage for what I need to feed 25 ppl. The ingredients that go along with it to complete the recipe. I was being aggressive at $3.50 for a total cost of $6.00.

Beans are $14.31 for a full pan so I went high @ $8 for a half pan.

ynotfehc said:

You need to adjust your pork cost according to lose during cooking. Even on a FC of $80, I'm charging $400 plus tax and credit card fee. This is based on my expenses- food, paper, cleaners, wood, storage for trailer, gas for truck, gas for generator, some propane, commissary rent, equipment/supply storage unit, accountant, licensing fees, vehicle maintenance, and labor.

Click to expand...

I did forget to include that, you are right. My retail cost on the pork with loss is $56.89.

That does change the numbers.

sudsandswine said:

Exactly, although if your competition is not on the up and up as far as permits etc go you can probably surmise how the rest might be handled.

Now if you're able to do 4 of that same size catering job at the same time you'll have some efficiencies and up the net $/hr but I consumers/customers often don't take into consideration the cost of doing business when they look at how a good or service is priced.

Click to expand...

I really appreciate that. I guess my head has always been in the clouds. I do realize the cost after spending $810 in licenses and permits.

thirdeye said:

A business is a business. Besides all the good information you have received about having a good business plan, knowing all of your true costs, consumables, overhead, licensing, insurance, profit etc., two other bits of advice would be learn as much about your competition as you can, and don't set your pricing too far below market price.

Click to expand...

Thank you for that. I did reach out to someone who is highly respected out of the Bay Area and he told me the best piece of advice is to learn your competition and the pricing. Take into consideration if they are a restaurant, their hours of operation, and pay attention to how often they are hired for gigs.

HBMTN said:

BigDaveBBQ, your pricing is online with ours. I would love to be able to get what they are charging for a drop off for 25 people but in my area, you would not make it in business a month charging $450 for what you had quoted. Pork, buns, sauce, beans, slaw and mac n cheese in my area would cost you $225-$275 plus tax & delivery for a drop off from most any barbecue vendor but I like the way that $450 sounds :clap:

Click to expand...

Hey HBMTN, Yea these guys do not get booked often. I follow all their social medias. I think they are way too high personally. I may just be too nice of a guy, but I think based off the numbers the max I would ever go is 275 + tax. I would drop off and set up. Maybe some of the earlier comments are right, I will not last a month in business. These companies charging 400-500 are happy if they get the job and don't care if they lose the job. They have not done any follow-up with me, which tells me a but about them in general. I think if they get a job or 2 a month they are happy. Seems like they are most busy around the holidays doing company parties where they can charge more.

ynotfehc said:

Your food cost percentage shouldn't be based on your business model or how big your operation is, it should be based on your costs and the amount of profit you are happy with at the end of the day. 5% profit for gross sales of $200,000 is much smaller than on $2M gross sales.

What are you selling a pan of beans for? Sell price for pan of mac? Is 13lbs the raw or cooked weight? You calculated 50 rolls, or 2 per person. If I'm planning on 50 sliders, that's 2-2.5oz cooked meat per slider, or 8lbs cooked, 12lbs raw. If your costs are accurate, you may just be settling too high on your food cost percent. Dont under estimate the cost to operate a mobile business. I spend about $150-200 a week just on gas for my pick up and generator.

Also a note on your recipes, only accurate unit of measurement is weight, not teaspoons. My recipes are all calculated in grams. 28 grams in 1 oz, and 1 gram is always the same, a teaspoon of seasoning is not. Even the best scales will usually only weigh to the nearest eighth or quarter of an ounce, a gram is .03oz. By using weight my recipe is automatically ready to be costed since you cant buy spices by the teaspoon, always weight and almost always grams will be on the package.

Click to expand...

Ynotfehc, I agree on the profit margins. I just need to adjust my mindset to not think about the customers pocket book and focus on mine.

As for my food cost: My mac and Cheese is $17.67 for a half pan. My slaw is cabbage directly from the farmers market and it costs me $2.50 in cabbage for what I need to feed 25 ppl. The ingredients that go along with it to complete the recipe. I was being aggressive at $3.50 for a total cost of $6.00. Beans are $14.31 for a full pan so I went high @ $8 for a half pan.

Thanks for the comment about teaspoon to grams. i agree that I need to convert that. I will work on that this weekend.