Industry sector:

Outside caterer: Pricing policy


Getting the price right is very important. You must make sure that the amount you charge covers all of your operating costs, including your own drawings. You may have to price broadly in line with your competitors to make sure you get enough business, although if there is something that distinguishes your business from the others, you may be able to charge higher prices than your competitors.

Food

Many of your customers will expect you to quote and charge them on a 'per-head' basis, meaning that the amount they pay is based on the number of people catered for. You'll probably be expected to offer different options at different prices, and you may sometimes be asked to design a completely bespoke menu at an agreed price. You might decide to charge a lower per-head amount for bookings over a certain number of people, and you may well have a minimum booking size or value.

You should be able to work out how much the ingredients for each of your dishes will cost you. Once you have established what you will have to pay for each dish, you will have to decide what you will charge the customer for it. To do this you should try to estimate the 'hidden costs' involved with creating the dish, such as:

  • premises costs and heat and light
  • the wages of food preparation staff

Then think of the other costs involved in actually serving the dish to the customer. These will include:

  • the transport costs of moving the food from your premises to the customer's venue
  • the wages of serving staff, if these are not paid for separately by the customer
  • table decorations, if these are not paid for separately by the customer

Finally, you should add in any other costs, such as administrative staff wages plus a profit element for you and you will arrive at your selling price. So, for example, a dish or combination of dishes with ingredients costing £3.00 per head might be sold for around £8.50 per head (all prices are included for illustrative purposes only).

Drink

Your standard per-head catering prices might include a certain amount of drink for each guest, after which drinks are charged for separately. Or you might decide to charge for all drinks separately at an agreed price. You may need to work out prices for drinks like bottles of wine served at the table, and other alcoholic and soft drinks served from a bar.

When setting your drinks charges, you should also take into account that your operating costs need to be covered, although there is obviously less input needed (you only have to buy it, take it to the venue, open it and pour it). You could look at the drinks lists of your competitors to see how much they charge or you could simply double the purchase price (this is quite common practice in the catering industry). You may choose to allow customers to provide their own drink and charge them a corkage fee. Generally, you would not charge for any bottles of wine, beer and so on returned to you unopened and with their labels intact.

Staff

You may decide to charge the customer separately for the staff they have at their event. For example, your charge for providing waiters and bar staff might be around £20.00 per worker per hour.

Discounts

You may well offer corporate customers a discount as a matter of course as they are likely to shop around for the best price. You may offer discounts to members of the public based on quantity. For example, the greater the number of people to cater for, the lower the per head charge is. You may also offer discounts to regular customers. How much discount you offer might depend on how much local competition there is.