what is the standard pricing formula for caterers? how do caterers come up with their prices?

Answer 1

Materials + Overhead + Labor + Profit = Price
Materials include the costs of the food or beverage items. Also, include any shipping and handling costs incurred to acquire these materials.
Overhead costs are the variable and fixed expenses that must be covered to stay in business. Variable costs are those expenses that fluctuate including vehicle expenses, rental expenses, utility bills and supplies. Fixed costs include the purchase of equipment, service ware, marketing and advertising, and insurance. After overhead costs are determined, the total overhead costs are divided among the total number of catering jobs expected.
Labor costs include the costs of food preparation and service. Also included are Social Security taxes (FICA), vacation time, retirement and other benefits such as health or life insurance. To determine labor costs per hour, keep a time log. When placing a value on your time, consider the following: 1) Your skill and reputation; 2) wages paid by employers for similar skills and 3) where you live. Other pricing factors include image, inflation, supply and demand, and competition.
Profit is a desired percentage added to your total costs. You will need to determine the percentage of profit added to each menu item or type of event.
Determining a price is not easy. It is as much an "art" as it is a "science." There is no one exact price. Base your price on the type of event being catered, special services offered and your competition. When considering your competition, your three pricing choices are to: 1) Charge the same as your competition; 2) charge more than your competition or 3) charge less than your competition. It is important to cover all your costs if you want to stay in business. There are computer programs available to help you price foods and keep financial data for decision-making.
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Answer 2

It depends on the type of catering you are planning on doing. I did events (ie: weddings). When I used to cater: I charged $150 for my time, $75 for each server (1 server for every 50 people for buffets and 1.5 servers for every 2 tables for sit down dinners) , and then I doubled the cost of the food. I do not have a culinary degree. I have a friend who is a grad of Johnson and Wales charges $250 just to show up, $75 per hour, and dinner starts at $25 per plate. He only does small dinner parties (under 25 guests). I know someone else who does baked goods from her house and uses a cost + 200% formula. Check with your local health department. Laws vary as to what you can and cannot do depending on your license status. They usually offer classes on health sanitation requirements and license perparation. You will need this to get insured. Also, there are groups that give advice to people trying to set up small businesses. They can help you develop a business plan that will help you develop a pricing schedule.

Good Luck!

Answer 3

a standard for pricing is a food cost of 30%, therefore if materials,food,labor cost $30 you would charge $100. Thats really a basic formula whether its high end or a buffet. The exceptions may include holidays.(ie I have charged $250 an hr on Xmas eve plus material costs)

Answer 4

Cost of food + at least 25%. Cost of linen service. Cost of rentals (tables, chairs, chafing dishes, plates, glasses, etc). Cost of your help. Gratuity. And most importantly, pay yourself for your time involved.

Divide the total cost by the number of guests and you have your per-plate cost. My cousin is a caterer, and she charges upwards of $50 a plate to cover expenses and for her to make a profit. She's stinkin' rich now, still in demand after 15 years at those prices!