How to Price a Catering Job: A Working Method

Most catering jobs are priced one of three ways: a per-person figure, a flat price for the whole job, or cost plus a margin. The third one is the only one that tells you whether the first two are any good. The commonly published starting points are food at 25 to 35 percent of the price, labor at 20 to 35 percent, and what is left covering overhead and profit. Those are starting points rather than standards, and your own last ten jobs will beat them. What follows is the order to work in, the line most caterers leave out, and two jobs costed end to end.

The order to work in

Price the job in this order and the number at the end is defensible:

1. Food, at what you actually pay, including the trim and the yield loss.
2. Labor, by role, including setup and breakdown, with the burden on top of the wage.
3. Rentals, disposables and equipment.
4. Transport, fuel and anything the venue charges you.
5. Overhead, as a share of the job.
6. Your margin, applied to the total of 1 through 5.

The common mistake is applying a markup to the food cost and treating everything else as something that will come out in the wash. On a staff-heavy job it does not come out in the wash, because labor is the larger number.

Food cost, and the number that is not on the invoice

Your food cost is not what the case cost. It is what the case cost divided by what you actually served.

A whole beef tenderloin bought at 8 pounds yields roughly 5 to 6 pounds trimmed and cooked, so a $14 a pound purchase is closer to $19 to $22 a pound on the plate. Chicken breast loses around 25 percent in cooking. Rice and pasta go the other way and gain, which is why a starch is portioned cooked and ordered dry.

Two practical consequences:

• Price protein off the cooked weight you plan to serve, then work backward to the raw weight you buy.
• Put the buffer in deliberately as a line you can see, rather than by quietly rounding every order up. A buffer you can read is a buffer you can reduce when the job is a repeat.

The portion figures and the yield factors are the thing the free calculator on this site does. It gives the raw ordering weight with the cooked weight beside it, by service style, and it needs no account.

Labor, including the part most quotes leave out

Labor is hours multiplied by rate, and then burden on top.

Hours is not the length of the event. A four-hour reception for 120 guests is not four hours of server time. Each role has setup and breakdown hours attached to it, and on an off-premise job those are often half the total. A crew that arrives at two for a six o'clock service and leaves at midnight has worked ten hours on a four-hour event.

Burden is payroll taxes, workers compensation and insurance on top of the wage, and it is commonly figured at 15 to 25 percent for W-2 staff. Whether a given person on your crew is W-2 or a contractor, and what that changes, is a question for your accountant and your state's rules rather than for a calculator. Catering Calc has no separate burden line, so enter each role's hourly rate with the burden already added, and every job you price carries it.

The staffing ratios themselves are on the staffing ratio cheat sheet, which has the per-style numbers and the six things that move them.

Rentals, disposables, transport and overhead

These are the lines that get forgotten and then get eaten:

• Rentals are counted by what the supplier sells: china and flatware by the rack and the crate, linens by table diameter, tables and chairs by the piece. Count the rentals against the real table plan, not against the guest count.
• Disposables come in packs. 120 guests needing two plates each is 240 plates, which is five sleeves of 50 and not 240 plates priced individually.
• Transport is fuel, vehicle time, and anything the venue charges for loading, parking or power.
• Overhead is rent, insurance, software, your own unbilled hours and the vehicle. The usual way to get it into a single job is to take last year's overhead, divide by the number of jobs or by revenue, and carry that in as a percentage. Pick one method and use it on every job, because switching methods between jobs is how two similar events end up priced differently for no reason.

Margin, and what the word means here

Margin and markup are different arithmetic and the difference is money.

A 30 percent markup on a $100 cost gives you a $130 price, and your margin on that is 23 percent. A 30 percent margin on a $100 cost gives you a $142.86 price. If you have been quoting markup and calling it margin, you have been earning about a quarter less than you thought.

The formula for a margin target is cost divided by one minus the margin:

price = total cost / (1 − margin)

At a 30 percent margin: $100 of cost prices at $142.86. At 35 percent: $153.85.

Two jobs, costed

The figures below are illustrative and use commonly published planning ranges. They are not our recommendation for your market, and your own costs should replace every one of them.

Job one: a 75-guest buffet lunch, on premise, three hours

Food is 31 percent of the price and labor with burden is 25 percent, so this job sits inside the published ranges without having been forced to.

Job two: a 140-guest plated dinner, off premise, five hours, with rentals

Here food is 22 percent of the price and labor with burden is 30 percent. The same 30 percent margin produced a very different shape, which is the whole argument against pricing from a food-cost percentage alone. Had this job been priced by marking the food up to a 30 percent food-cost target, the price would have been $9,100, which clears cost by $235 and is a 2.6 percent margin rather than 30.

Where this method breaks

• Very small jobs. Below about 25 guests the fixed time swamps the per-head arithmetic, and a flat job minimum is more honest than a per-person figure.
• Tasting and sampling. If you run tastings to win work, that is a cost of sales rather than a cost of the job, and loading it onto the job that follows distorts both.
• Repeat corporate work. A client who books monthly is worth a lower margin than a one-off wedding, and the method will not tell you that. You will.
• A venue that dictates the vendor list. Required rentals or required staffing can move your cost after the price is agreed. Price the requirement, not the plan.
• Anything with a cancellation risk. A deposit structure is part of the price. What you may charge and keep varies by state and by what your contract says, which is your attorney's question rather than a calculator's.

What the client sees, and what they never do

The quote that leaves your building should carry the price in the lines that make it: the food, the service, the rentals, the service charge if you take one, tax if it applies, and the deposit. It should not carry your cost per pound, your crew's hourly rate or your margin. A client who can see your food cost will negotiate against it, and a client who can see your margin will negotiate against that instead.

This is why Catering Calc produces two documents from one event. You see the cost and the margin on the Cost & Margin step. Your client sees the quote under your business name, with none of it. The kitchen gets a third document, the prep sheet, with the quantities and none of the pricing.

Whether a service charge is yours to keep, whether it is taxable, and what has to be disclosed to the client all depend on your state and on how your staff are engaged. Put the question to your accountant before you write the line, and write the line the same way on every quote once you have the answer.

Doing this in Catering Calc

The quantities are free and need no account: enter the guest count, the meal and the service style on the free calculator and you get the per-person portions and the total weights, with raw and cooked both shown.

Pro works through a job one step at a time: food, drinks and ice, staffing, supplies and rentals, then the price and the quote. Cost & Margin takes your food cost by the pound, the head or the piece, your crew by role with each role's setup and breakdown hours, the bar, the rentals and the overhead you enter, and gives you the total, the cost per guest and the price at the margin you set. It then writes the client quote under your business name and the prep sheet for the kitchen. Every figure it ships is a default you can change once, after which every event you price uses yours.

Pro is $179.99 a year, which is $15.00 a month and half the price of paying monthly. The annual plan starts with 7 days free on your first subscription, and a card is taken at checkout. The monthly plan is $29.99 and has no free trial.

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