Proper Food & Labor Costs For On-Premise Caterers by Carl Sacks

Revenue                                                                               100%

Subtract Prime or Direct Costs                                         - 45%

(food, beverage, rentals, party staff, hourly kitchen labor)

Gross Profit Margin                                                         55%

Subtract G&A (fixed) Costs                                              - 45%

(salaries, rent, utilities, insurance, truck leases, benefits, supplies, office expense, etc.)

Pretax Profit                                                                       10%

Discussion Brainstorming

Check out the points below and challenge them, take them apart, and try to understand what they may mean. In most cases they can mean many different things:

1. Selling is a process not an action.

2. Be aware that when you use one word or phrase over another when selling it makes a difference in the result.

3. To be a top sales performer, you need to continually learn about yourself.

4. The beginning of each selling situation is crucial and is more important than the closing.

5. Think, listen, and watch like a salesperson.

Important Truths About Pricing - Part 3

1. Don’t be afraid to haggle with buyers when it is needed.

2.  Never defend your higher price; simply explain it.

3.   Raising prices is a right, not a chore for a businessperson.

4.   You will sell a $10 menu more easily to a buyer if you also have a $14 menu for them to compare.

5.  Pricing options are the key to winning a buyer over. By letting the buyer participate in determining how to spend their money, you give them a sense of confidence that lets them buy from you more quickly.

6.   Always give an answer to a customer who asks what something costs. It doesn’t have to be the final price, but at least it needs to be a range of prices the catering might cost. No buyer wants to be put off when asking, “How much is it?”

Proper Food & Labor Costs For Off-Premis Caterers by Carl Sacks

The Basic Catering Equation for Off-premise Caterers

Revenue                                                                               100%

Subtract Prime or Direct Costs                                         - 55%

(food, beverage, rentals, party staff, hourly kitchen labor)

Gross Profit Margin                                                         45%

Subtract G&A (fixed) Costs                                              - 35%

(salaries, rent, utilities, insurance, truck leases, benefits, supplies, office expense, etc.)

Pretax Profit                                                                       10%