How to price catering orders
Catering is priced on total cost, not food cost. Count the labor properly, or a job quietly loses money at a food cost that looks perfectly healthy.
Catering is priced differently from a menu, and the operators who lose money on it usually lose it in the same three places: labor that was never counted, a per-head price built from a plated-dish cost, and travel treated as a rounding error.
The food is rarely the problem. A catering job is mostly logistics, and logistics is mostly time.
Job price = (food plus labor plus equipment plus transport plus disposables) divided by (1 minus target margin)
Note the division. Adding a 35% margin on top of your costs is not a 35% margin, it is a 35% markup, and the two differ by more than most quotes can absorb.
Start from the per-head food cost, then stop
Cost each dish on the menu the way you would cost anything: ingredients, prep recipes, yield. Multiply by the number of covers. That gives you the food cost for the event, and it is the one part of catering pricing that works like your menu does.
Everything after this point is what makes catering catering.
Count the labor properly
This is where catering margins are won and lost. Count every hour the job consumes, not just the hours spent cooking:
- Prep before the event, usually the largest block.
- Travel time, both directions, for every person going.
- Setup and service on site.
- Breakdown, packing, and the drive back.
- Cleaning and restocking afterwards.
A 60-cover lunch might carry 7 hours of prep, 2 hours of travel across two staff, 3 hours on site and an hour of cleanup. That is 15 paid hours against the 3 hours the event itself lasted. At $18 an hour that is $270 of labor on a job whose food might have cost $420.
Everything else that has to be in the price
- Equipment rental: chafers, urns, linen, plates and glassware, anything you do not own.
- Transport: fuel, mileage, a van if you rent one.
- Disposables and packaging, which for catering are usually a bigger line than for service.
- Insurance or permits the venue requires.
- A contingency, because catering goes wrong in ways a service does not.
Price on total cost, not food cost
A menu dish is priced against a food cost target. A catering job should be priced against its total cost, because labor is a variable of the job rather than a fixed overhead you have already covered.
Add up food, labor, equipment, transport, and disposables, then apply your margin to that total.
Worked through: $420 food + $270 labor + $80 equipment + $45 transport + $60 disposables = $875 of direct cost. At a 35% gross margin, which means 35% of the price rather than 35% on top of the cost, the job prices at 875 divided by 0.65 = $1,346, or about $22.44 a head.
Quote the same job at a 30% food cost on the food alone and you get $1,400 in revenue but only after you notice the food was $420, so 420 divided by 0.30 = $1,400. That happens to land close here, and it will not on a labor-heavy menu. On a canape event with $300 of food and 25 hours of labor, food-cost pricing quotes 300 divided by 0.30 = $1,000, against $300 of food plus $450 of labor. That is $750 of direct cost before equipment, transport or disposables, leaving $250 to cover all three and the profit.
Minimums and deposits are part of pricing
A minimum spend exists because the fixed cost of a job barely moves between 20 covers and 40. Set one and hold it. Take a deposit that covers your food purchase, so a cancellation does not leave you holding stock you bought for one event.
Frequently asked questions
- What margin should I target on catering?
- Most operators aim higher than their dine-in margin, because the job carries labor and risk a service does not. Price on total cost rather than food cost, and treat your dine-in food cost target as irrelevant here.
- Should travel time really be billed?
- It is paid time, so it is a real cost whether or not you show it as a line on the quote. Build it into the price. Whether the customer sees it itemized is a sales decision, not a costing one.
- How do I quote before I know the final headcount?
- Quote a per-head price with a stated minimum and a confirmation deadline, usually 48 to 72 hours out. Your food purchase follows the confirmed number, not the inquiry.
- Can I use my normal recipe costs for catering?
- For the food component, yes, and you should, so the two stay in step when supplier prices move. What you cannot reuse is the pricing method: a menu price assumes labor is already covered by your fixed overhead, and on a catering job it is not.
Build the menu line by line and get a per-head food cost you can price the rest of the job against.
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