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Catering businesses, unlike restaurants, don't tend to have a single average for food cost. Caterers sell volume food. Often they sell the same menu at a lower or higher price depending on the total number of guests. At present most on-premise caterers (i.e. banquets facilities & clubs) run between 17% to 36% in their food costs. Off-premise caterers run higher at 22% to 41%. Remember: Caterers should think of food costs on a party-by-party basis. Unlike a restaurant that tends to sell the same items over and over with the same portion sizes, caterers tend to do the opposite. So, it's not wise for caterers to try to average their box lunch sales with their weddings. More information can be found in catersource Magazine.

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The majority of off-premise caterers tend to own their back of the house equipment (i.e. grills, washing tubs, thermal carriers) and rent front of the house equipment (i.e. china, tables, chairs). We feel that a combination of both would be the best goal for most caterers. By the way, on-premise banquet facilities miss the boat when they don't offer their clients the opportunity to pay more for specialty items that can be rented.

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For companies under $500,000 per year the net bottom line before taxes most often is between 11% to 26%. For companies between $500,000 to 1.5 million the net bottom line before taxes most often is between 9% to 22%. For companies over $1.5 million per year the net bottom line before taxes most often is between 8% to 22%. We've seen higher and lower profits, but these tend to be the averages. The reason the profit drops is attributed to the chaos that develops as a company gets bigger.

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Probably yes. Many corporations are being told to cut their catering budgets. Because of this they are looking in the yellow pages for alternatives to their present caterer. If you primarily do social catering the need for a display add is less. Social catering is more of a word of mouth growth experience.

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Yes. An owner working an event should place themselves on the staff list of most events. They should be billed at the same rate the staff gets for the work. Many owners bill the client at a premium for their on-site leadership. It all depends on where you sell catering and who you are selling it to.

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Yes and no. It depends on what's at stake. If a contract means a down payment then all caterers are using a contract. But, if a contract is a legal looking document with signatures required, then most caterers are not doing this. Most caterers require one signature for sure … the one at the bottom of a deposit check. In addition, they send their buyers written explanations of all they have promised to do and all that the client has promised to do.

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Come on … think about it? Would you buy from a food vendor that didn't give you your prices on paper? Yes, a caterer should respect their buyers and give them an idea of what they will need to pay to use your services. It is also okay to give ranges of prices … "The cost of these menus runs between $18.00 to $29.00 per guest depending on what you select, the way we serve it, and the final number of guests".

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A big question filled with emotion! In general, health departments will not let caterers give large amounts of food to customers or guests. Check with your health department. Remember: You were not hired to serve an amount of food … you were hired to feed a certain number of people. The caterer owns the food and always sends extra because they can't predict how much a particular group will consume at an event.

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Yes … but not for as much as you think or wish it to be! The purpose of being in business is to make money while you own it! catersource knows of ten year old catering companies with $1 million in annual sales being sold for $75,000! The education that catersource offers will permit you to earn a proper profit!

Answer
It should be explained to clients that in addition to a 50% deposit at time of booking, they will need to pay for their balance on or before the event day. Remember, once they eat your food you can't take it back if they don't pay!