Two businesses with different maths
A restaurant that serves guests at tables and a caterer that serves an event may use the same kitchen and the same recipes, but they are different businesses in how they earn money. Pricing both with the same food-cost percentage is a common mistake.
Table service sells individual dishes. Each dish has its own food-cost target, and the rest of the costs (rent, staff, utilities) are spread across a whole week of covers.
Event catering sells a package per head for a fixed date. It has extra costs that belong only to that event: transport, staff for the event, equipment hire and set-up. Those costs do not scale with the food and are easy to forget.
How to price an event
- Cost the menu per head. Use your recipe cards, with waste.
- Add the event costs: transport, staff hours, equipment and set-up.
- Divide the extra costs by the number of guests.
- Apply your margin target to the total cost per head.
A worked example (illustrative)
An event for 60 guests.
- Menu cost per head: €9.00, so €9.00 × 60 = €540.
- Transport: €120.
- Staff: 4 people × 6 hours × €15 = €360.
- Equipment hire: €180.
Extra costs: 120 + 360 + 180 = €660, or 660 ÷ 60 = €11.00 per head.
Total cost per head = 9.00 + 11.00 = €20.00.
If you priced it with the food-cost method alone, at a 30% target, you would charge 9.00 ÷ 0.30 = €30.00 per head, or €1,800 for the event. The total cost is 20.00 × 60 = €1,200, so the profit is €600, a margin of 600 ÷ 1,800 = 33%. That looks fine, but on a different event with higher transport or hire costs, the margin could vanish.
If you instead target a 40% margin on total cost: 20.00 ÷ 0.60 = €33.33 per head, or €2,000 for the event, leaving €800.
What changes for different events
- Distance changes transport.
- Number of guests changes the extra cost per head: the same €660 over 30 guests is €22 per head, over 120 guests is €5.50.
- Type of service (buffet, plated, canapés) changes staff hours.
- Equipment depends on what the venue provides.
Keep a short template with these lines, and fill it for every quote. A minimum number of guests or a minimum fee protects you from small events that cost almost as much as large ones.
VAT and local rules
VAT can differ between on-premises service and off-site catering. Check the rules in your country before quoting, and state clearly whether your prices include VAT.
Takeaway
Table service and event catering need different formulas. Price events with every extra cost included and a margin you choose on purpose.