The other day, while preparing a warm-up (check Sunday's blog) I wondered what kind of math do caterers use to determine the amount to bill, the amount of food, etc. So I checked the topic out.
Where I live, there is no such thing as a caterer. If you want to throw a party or something similar you either do it yourself or you have a pot luck so I'm not sure if my students even know what one is.
This blog entry makes a wonderful because the author describes the process she went through to cater a friend's wedding. She had to look at appetizers in terms of the number of bites and included charts on appetizers before a meal, no meal, or after a meal. Honestly, I'd never thought of thinking in terms of bites.
How do caterers arrive at the per person cost? According to this article, it is suggested that once the menu is set and this includes looking at organic vs grass fed vs any other specifics for meat and anything else, the caterer makes a list of all the ingredients necessary to make everything to determine the cost of food.
The general rule of thumb on meat portions is set at 4 to 6 ounces so one has to calculate the total number of pounds needed for the number of planned guests. It is assumed the menu will include appetizers, sides and dessert. The caterer also has to think about overhead costs such as the cost of electricity, gas, insurance, marketing, helpers, etc.
They also have to think about any disposable items such as napkins, forks, etc vs the cost of reusable table cloths, etc. One thing that is quite important in the estimate is the per hour cost of the caterer themselves. Finally is the anticipated profit which must be included. This gives the caterer a better idea of per person cost or per event cost.
Now lets look at some of these topics in more detail. For instance pricing can be done either as a per person or per platter which is known as fixed pricing or tiered pricing which focuses on the number of guests planned for. Tiered pricing is set so the more guests, the less charged up to a certain point. The mark-up can be done one of two ways. The first is to calculate the cost of food prep, ingredients, etc and multiply it by three or a straight percent markup of say 25%
We've mentioned overhead costs but one needs to look carefully at the idea of do you include the hiring of extra servers, tables, etc here or do you list them separately as add-on fees so you can keep the base costs down. Add-on fees might include tent, tables, chairs rental, extra servers, etc. Costs the caterer does not want in the per person charge so as to keep the costs competitive.
One last thing is to consider is if the caterer's prices are higher than others, what is it that makes the extra cost worth it but the bottom line is you can only charge what the general populous is willing to pay.
is actually for restaurants but the basics for calculating food costs
could easily be used in catering. It discusses all the things you need
to think about from pricing drinks to including drip loss in the
preparations and it has a worksheet to use to calculate the cost of
preparing a dish. It has great step by step instructions with reminders
of things to consider.
Notice a caterer has to perform quite a lot of math and its a very detailed amount of math. I think I might take a day in my low performing class and look at this topic so they can see math in action.