Corporate drop-off catering is an ever-increasing segment of the catering industry. To be successful with this revenue stream, you must provide consistency in product, presentation and on-time delivery. Another area you must be consistent? Pricing. If you don’t price your food items in a consistent manner, the product deliverable can vary in quantity and quality.
For example, for many years my catering company’s majority of events were weddings or private social gatherings. Everything is exactly priced and produced per person according to the final guest count. Most of the food for these types of events are hors d’Oeuvres and produced with batch recipes that are by a count (2 dozen, 3 dozen, etc.). These events were priced right and profitable. With a large variety of food options, we didn’t repeat the same menu or the same number of servings very often.
Later, when we ventured into corporate catering, we noticed that most of the food items that are served are not hors d’oevures. It’s a lot of hot lunch entrees and sides. We tried the same pricing method as before but now the style of food items were different and many of the items repeated week after week. Within a seven-day period, lasagna may be made for four different clients, all with different guest counts, i.e., 25, 37, 56, 82. The recipes were always changing due to the different guest counts. This caused more mistakes in multiplying recipes in the kitchen, which resulted in more waste and less profits. You might say, why not use a recipe conversion calculator that will calculate different serving numbers and spit out a recipe for any number of guests we want to serve? We tried that, too, but many times, when multiplying up or down, consistency is not the same for a recipe when using a conversion calculator. This is especially true with any conversions for handcrafted bakery items.
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We changed all of our corporate pricing to one-half pan, full pan, small bowl, large bowl, etc. Each half pan always weighs the same, is made the same and serves the same amount of people depending on how the item is cut, if cutting is relative to the food item. We even provide a cutting chart for the client so that there is more exactness and clarity for them. This pricing change in turn eliminated a large amount of waste due to errors and sent consistent profits for each item to our bottom line. (If relevant to your type of food service, you can also have the same results with pricing by the ounce/pound or by the bone.)
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I learned the hard way about making a profit rather than a gross sale. Many years into my catering business adventure, I woke up one day at $1.6 million in gross sales and zero net profit at the end of the year. I was working very hard for NOTHING. Many caterers today are doing the same thing. They are creative, talented people who can execute fabulous events all year long but their net sales for the year aren’t even at 5 percent, which is the national average for what a food company should net each year. And many caterers don’t even pay themselves a salary!
Why settle for ZERO salary? Why settle for ZERO company profits? Why settle for ONLY the average net company profit?
Challenge yourself in 2019 to make the profit you deserve. If you need help in reaching your catering profit potential, I’m only an email away.
