Three Ways to Increase Your Bottom Line as a Caterer

With the busy season picking up, you’re probably seeing an uptick in revenue. But with that, your expenses are probably on the rise as well! It can feel disheartening to book more clients and earn more money only to realize your profit margins haven’t budged. And with rising inflation, many caterers want to grow their bottom line.

Fortunately, there are a number of ways for caterers to boost income and reduce costs without affecting the quality of their offerings. Here are three strategies to build into your catering business and produce meaningful results this year.

Cut back on kitchen waste

It’s hard to cut costs if you’re throwing money in the trash, but that’s essentially what happens when tossing out food waste. Whether it’s due to spoilage, limited storage, or lack of use, the average restaurant loses 4-10% of the food they purchase (National Restaurant Association, 2024). Now, consider how much you spend on food each year and calculate 10% of the total. That is how much you gain to save by reducing waste and making the most of everything you buy.

Here are a few ways to maximize your food expenses:

Adjust your pricing 

Pricing your offerings can feel like walking a fine line between operating at a loss and driving customers away with hefty markups. But you shouldn’t treat your rates like guesswork. Instead, you have lots of data to fine-tune your pricing to meet consumer expectations while returning a respectable profit.

You don’t need an economics degree to know that a market’s supply and demand drive a business’s rates. As you revisit your pricing structure, consider the following:

“Raise your prices” is not always the answer to a diminishing profit margin. But sometimes, you may need to adjust rates to remain competitive and account for market shifts and expectations. If you do increase prices, prepare to communicate the change clearly and forthrightly to your clients. 

Negotiate food costs for better rates

Many caterers don’t think of negotiating with distributors because they assume prices are set in stone. But that isn’t the case! Most suppliers are open to discussing their rates and reaching a mutually beneficial agreement if it means securing your return business. For instance, you might earn a discount for increasing your order amount, setting up recurring orders, or opting to pick up your order instead of having it delivered. You won’t know unless you ask, so consider broaching the subject for your next order.

If you don’t have the time or desire to negotiate, you can still reap the benefits by joining a group purchasing organization (GPO). A GPO negotiates on your behalf, leveraging the collective purchasing power of thousands to secure the best bulk rates for its members.

Here’s the thing: Expanding your profit margin requires creativity, and caterers are known for being experimental! Take the innovativeness in the kitchen and apply it to your financials, and you’ll start seeing growth over time.