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

[BigDaveBBQ]

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]

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

[BigDaveBBQ]

Originally Posted by sudsandswine

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

Tax is 7.75% here.

[sudsandswine]

Not sales tax....business and income taxes.

https://abacuspay.com/2020-federal-payroll-tax-rates/

[BigDaveBBQ]

Originally Posted by sudsandswine

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

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 . 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]

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.

[BigDaveBBQ]

Originally Posted by Bbq Bubba

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.

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]

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.

[sudsandswine]

Originally Posted by BigDaveBBQ

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 . 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.

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.

That being said, $20/pp for pork and a couple sides sounds high to me and I would have a hard time paying that, as that'd be a multi meat dinner platter at the sit down BBQ restaurants in my neck of the woods. But if they're charging it I suppose the market must be able to bear it.

[thirdeye]

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.

[BigDaveBBQ]

Originally Posted by ynotfehc

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.

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.

[BigDaveBBQ]

Originally Posted by sudsandswine

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.

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.

[BigDaveBBQ]

Originally Posted by thirdeye

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.

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]

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

[C Rocke]

Originally Posted by BigDaveBBQ

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.

Need to "build in" your paycheck, your umbrella liability policy (most venues, HOAs, parks, etc require 2-4 MM and a named insured declaration), Vehicle insurance, equipment/trailer insurance, depreciation/wear and tear on equipment, gasoline, permits (Can be different for each city OR county, including sales tax), income tax quarterly amount, advertising, Web site, etc, etc. All these need to be "baked in" to any pricing to arrive at a true cost of goods and selling price. Lots to be aware of...