Catering is not a product line.
Catering is your business. What your catering business sells are products. Your
product lines are these products grouped by similarities. General Motors sells
cars, but Chevy and Buick are examples of their product lines. When someone
asks you what you sell, resist answering, “catering” and answer, “weddings,
corporate galas, dinner parties,” because these are examples of the product
lines you offer.
Many caterers consider weddings of
more than 300 guests a different product line than weddings with fewer than 100
guests because they have different production costs and impact on the business.
The same would be true for box lunches that sell at $7 per person versus those
that sell for more or less.
Caterers need to evaluate their
product lines and decide which are most profitable. Track them to make sure you
know which ones are good for your business and which ones are not. Stop selling
those that have the lowest return and expand those that add the most to the
bottom line.
A product line is evaluated by monitoring orders by type,
number of guests, price and overall costs. First, organize all your past orders
by type, size and revenue and see what you get. What you find will amaze you.
For example, a box lunch order for 200 may have more profit in it than a
wedding for 50 when you run the numbers. The decision, based on what you just
learned, would be to promote box lunches for larger groups while raising the
minimums for weddings to 100 or more.
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