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ELLEN'S KITCHEN
beginning caterer (like so many)
CATHY M
02/02/11
Hello,
after gathering food and other items bought for a catering job ... what is average profit margin to charge.
I will be cooking for 150 to 200 (TBA) ..
chicken/beef and hot sides .. etc.
30% to 50% .. I have seen both. Also times the costs by 2 & 3 ... I wish to be fair to all.
ellen
02/02/11
Cathy, it depends on too many things, such as whether it is drop off or served, whether you are supplying the setup and clean up, tables; china, silverware and glassware vs paper/plastic. You probably are not ready to do this if you don't know how to estimate it.

You also need liability insurance in case of accident or food poisoning (is it worth losing your house over? if not, you need insurance); a license from the public health department. etc.

I have had this question before and here is what I wrote:

Dear ---

Please see this site for an example of billing from a real caterer.
www.atasteful-affair.com/faqs.html

Catering Cost FAQ
Besides the cost for food, what other charges can I expect for a catered event?
When we provide your customized menu, we list of all of our estimated charges in order to provide you with a complete proposal. In addition to the per person price for food we include the following in each proposal:

18% catering fee

Cost of rentals (that we obtain on your behalf)

Labor charges for service staff-We charge for our staff by the hour, based on a five hour minimum per staff person. We do our best to estimate the amount of time that our staff will be needed for your event. However, since many variables exist, the final cost is based on the actual time worked. For large full service events, we require an Event Manager to oversee staff and ensure the coordination of a successful event.
Typical rates 2010
Event Manager @ $30.00 per hour
On-Site Chef @ $40.00 per hour
Bartender @ $25.00-30.00 per hour
Server @ $25.00 per hour
Kitchen Staff @ $25.00 per hour

Sales tax

Gratuities are not itemized in the bill (unless directed to do so by the client), nor are they required. They are, however, graciously accepted by our staff for a job well done. A gratuity of $25-60 per staff member or a percentage of the total is customary.

---, some caterers include only the price of food in the per person cost, others include food and service, others include linens and/or china in the per person charge. It is important when comparing bids from two or more companies that pricing for all of the necessary items are included in both quotes for an accurate comparison.

This is a pretty big party for a first catering adventure...

You will need about 4 cooks (total) plus about 6 servers per 100 guests for buffet style service. You need a written contract that specifies what food, beverages and set up, service, and equipment you are responsible for including in the price. If this is a paid event, you PROBABLY need a public-health inspected kitchen to work out of, unless there is one at the site you are using- check licensing requirements in your state. You need LIABILITY INSURANCE for the event- what if someone gets sick, claiming food poisoning, or a guest or server is burned or cut?

Here are a few rules of thumb for you:
-Food costs should be 1/4 to 1/3 of the bill, the lower fraction with higher service costs (tables with plates,) the higher fraction for a buffet.
-Total weight of edible food for 1 adult, 1 1/2 pounds for a meal, 1 pound for a reception type event.
-Total volume of all sides for bbq, salad, slaw, beans, is about 1 gallon for each 10 persons
-Biggest cost is the meat, so menu choice steeply affects price; for riblets or ribs, you need 1 pound raw per person, where for pulled pork sandwiches, you need about 1 1/4 pound boneless raw for 3 people. Chicken pieces or leg quarters are a big BBQ bargain these days- check the plan for 100 lists for amounts.
-Choice of meats increases amounts needed about 10% for each one added. For example, say you want to serve Italian beef (sliced, marinated) AND baby backs in equal amounts to 100 people; you use the charts for 100 people, but instead of making for 50% each, you make for about 60% each- people eat more and take some of each when offered a choice.
-To control costs, put all the salads and side dishes first, meat last on the line. Put desserts very visible but on a separate table so people see them and "leave room for dessert".
-To control costs, have someone serve the meats- for a large party, the cost of the server is less than the cost of the extra meat taken with self serve. Besides, it looks elegant.
-To control costs, add some side dishes such as borracho/ranch beans, an extra slaw, or a hot vegetable or rice or potato dish that goes along with the menu.
-To control costs, use a 9" plate instead of a 10" and use a slightly smaller serving spoon. People usually take 1 or two spoonfuls regardless of the size of the spoon
-To control costs, be sure that the written contract specifies exactly how many persons you are responsible to serve, what is going to be done about no-shows (you are contracted for 300 people, 265 show up, they want to pay you for only 265. Your entire profit is gone; you worked the whole event for free...) and what your responsibility is for extra guests (you are contracted for 300, 325 show up, you run out of food. Who gets blamed?...)
-To control costs, be sure the contract specifies who owns the extra food- if you bring 10% extra above the contracted amount to cover extra persons, not an unusual thing at informal gatherings, some inexperienced employers think they get to take home ALL the food not eaten. Un-unh, see why the contract specifies exactly how many meals they are buying?

Read all my food safety articles before you start selecting the menu and planning the prep. The storage and kitchen facilities may affect the menu.

Finally, go on line and inspect prices for comparable meals in your area. You will find some consistency, and there is a reason for that. If your estimated price differs markedly, ask yourself, why? As to price, professional caterers charge 3 to 4 times the food costs, depending on the type of service, number of staff supplied, table and equipment rental, insurance (you DO have liability insurance, don't you?) and many other factors. See the pro catering bpoard at chef2chef.com for lengthy discussions of amounts, contracts, etc.

I hear your hopes, but have to ask some hard questions. Do you have previous food experience, market contacts, liability insurance, a business plan and a kitchen with health department approval? If not, you can be shut down in a minute. The failure rate on food businesses is over 50% at one year and most that survive go two full years before going into and ataying in the black.

----, this site is primarily for home cooks and volunteers. There are LOTS of things, besides how much food, you need to deal with. You need event insurance (business liability to cover staff and guests in case of accidents, food poisoning, etc). You need written contracts specifying lots of things, including who is responsible for setting up and taking down the seating and tables (and renting all the dishes, tables and chairs, chafers, providing linens and centerpieces, etc.)

Please go to chef2chef.com and cheftalk.com and read all their thread from new/ starting caterers before you commit to this.

 
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