How do you know how much to charge?

[nursewizzle]

How do you know how much to charge for any sort of catering? Specifically, just bulk meat by the pound. I did some brisket and sliced pork loin for somebody recently and they want to know how much to page me.

I've checked around some of restaurants in the area and they charge anywhere between $12-16/pound for brisket. Nobody around here does sliced pork loin though. I got the meat from Costco, brisket was $3.49/pound and $1.88/pound for pork loin (I think).

Thanks for any advice.

 

[gmc2003]

It all depends on the situation. If your doing it as a favor for a friend then I would just charge enough to cover the costs of meat and supplies. If your doing it as a small business then I couldn't help you. There are allot of hidden costs associated with operating a catering business that vary from state to state, and town to town.

Chris

 

[gmh313]

as GMC2003 said, it depends on the situation. If this is a one time or seldom occurance, then you can get away with fair market value, unless it's for a friend/family then you are on your own to determine how much is "their fair market value". If you're going to make a business out of it, you need to truly determine what your costs are, but a good rule of thumb is raw material shouldn't be more than 30%, meaning you should be charging about 3x for a cooked product what you paid raw.

 

[HalfSmoked]

Good advice if for a friend cover your cost for profit 331/3 markup is basically a business markup.
If it cost a $1.00 you sell it for $1.50 be sure and include all your cost when deciding this.

Warren

 

[johnmeyer]

Marketing 101 says that three things determine what you should charge:

1. Your underlying costs. Warren covered that perfectly. This sets your minimum, because if you don't cover your costs you will not do too well.

2. The competition. This one is really important. Call around, go online and do a little research. There are tons of catering companies in your area, I'm sure. Find out what they charge. You can go above their pricing, or you may have to stay below their pricing, depending on #3 (below).

3. The actual value of your product or service to the customer. This one is really tough to measure, unlike the other two which you can calculate very precisely. However, it is the most important. If people are willing to drive 100 miles and stand in a line for two hours to eat your stuff, you can charge a lot. If no one comes back for seconds, and most of the stuff is left at the end of the meal, see #1 and #2 above, and go as low as you can, while staying in business.