Roman On Downsizing Your Volume?

Why? Why not? Profit stems from a ratio of costs and selling price. More sales can bring more profits, but they can also bring more errors and loss of money and less peace of mind. For most caterers, the need to sell more is simply a case of paying the bills with cash flow created by the extra orders, but profit is more important than volume. Create a proper balance between what you need and what you would have if you booked everything that comes along.

To downsize to gain profitability:

·   Raise your minimum order size in some, or all, of your product lines. This will cause some of the very small orders to fade away, leaving more time to work for bigger ones.

·   Limit the number of events you do on a particular day to insure that too many orders are not booked that would result in overtime or the need for extra culinary staff.

·   Tighten up your payment policies. If they don’t pay on time, maybe you don’t need this type of client. Why carry clients who are dead weight?

·   Close one day a week, which gives everyone the same day off.

·   Close for the slower season, especially if past sales history demonstrates that you suffer financially.

·   Decide to be either a social caterer Thursday through Sunday or a corporate caterer from Monday through Friday.

·   Raise your prices on product lines that create the most work.

·   Institute a concept of extra charges for tent events and events that are a long distance from your location.

·   Eliminate any breakfast orders or third-shift catering business that causes you to come early or stay late.

The concept is not to beat-up on your clients or to get tough. Instead, you are only trying to make your business more manageable and user-friendly. These are just suggestions, but they do lead to simple downsizing of your catering business and more profitable sales. A sale has either proper profit or not. The problem becomes serious when the orders you sold on a given day that did not have a proper profitability begin to soak up the profit from the profitable orders. Simply put, the profit from some orders is being used to neutralize the orders that didn’t have profit in the first place.

Note From Michael: The info above represents priceless consulting info. Please know that the info above is part of the problem and solution for many catering companies!