Cost X 3 Pricing Structure

[bizznessman]

All I do right now is do food vending and events. Its hard to know how much to cook and when its busy its hard to judge how long your going to be busy. Ive sold out many of times and Ive added more meat just for it to slow down and I ended up with a bunch of extra meat.

Many customers ask me if I cater and I've told them yes but have never had prices on my website and have not really pulled the trigger yet.

Ive been trying to study how all the bbq catering companies charge and thats when it starts getting harder because some charge a flat fee no matter what meats and sides you pick and I know one meat must cost more than the next and they are always busy. One charges $30 a person and you pick any 3 sides and 3 meats so their on the higher side. They don't even show a 2 meat option. Some target the low budget people and some target the big budget people. I just think if a guy is charging $22 for any two meats and any two sides their profit will not always be the same percentage.

Im already in a business that I'm the highest in my area and I know Im not as busy as the guys doing the same thing for less. Its really a game. On all the companies I researched I don't know how many have professional kitchens or working out of their backyard so you kind of have to see what their doing but see what works for you and thats what Im trying to learn. I need to pull the trigger soon.

"Ive been trying to study how all the bbq catering companies charge and thats when it starts getting harder....."
I hear ya Brother. However, remember that comparing different BBQ operations can be like comparing apples to oranges. If you try to compare based only on what is offered at a given price, you can come to some very wrong conclusions. The only way to compare menus/pricing is to know the entire accounting of each operation you are comparing. As you say many are operating out of "the back of" restaurants so this cuts down their overhead immensely.

Vending/Events are the hardest to do IMHO for the exact reasons you point out. Catering has much better margins because, if you write your contracts correctly, you are selling a set amount of food/services for a specific agreed upon price (which includes your margin) without any surprises.

At Vends we operate under the "get it while it lasts" code (unless the Vend has quantity/sales requirements that force us to produce X amount....yes some do) .

Sometimes we sell out and sometimes we don't. It has taken some time but we have learned our market's whims and adjust correctly ~90% of the time.

We have moved more toward Catering in the past two years just for the increased margin aspect.

 

[HBMTN]

Two Basic Rules for Starting A Successful BBQ (or any) Business:

Rule #1 - Do not confuse "making money" with "making a living".

Rule #2 - Refer to Rule #1

:wink:


"Most people that are in it discourage others considering getting in it."

HBTMN, With today's economy (and I don't see it getting better any time soon) margins are even harder to come by than they were in the past. Some of your "missed sales", during your test, could have simply been due to your local market economic situation at that time. Some of it could be due to the consumer experiencing a "change" in your pricing practices which is often times resisted. I would suggest, if you can afford to, giving the pricing change a longer period of time for a better test run. My suggestion would be a minimum of 6 months to get a more true analysis. One way to mitigate any "lost sales" during this test would be to see if you can "target" customers with bigger wallets. You never want to turn away those coming to you for quotes but often times you will nail down more profitable events by "seeking them out" and approaching them rather than waiting for them to approach you. We have done this for the last 2 years with great success. Our data shows that our "targets" now comprise ~65% of our business and the "walk-ins" only ~35%. And we make ~15-20% more true margin off the "targets" since they can afford to "upgrade" their experience with higher levels of service. We found that these "big boys" never even thought of approaching us since we are not a B&M. Their assumption was, "We won't bother asking for a quote from them since they don't have a store front and therefore surely couldn't handle the job". Perception is a funny thing a times and can also be a limiting factor for the consumer when they allow themselves to make decisions based on their inaccurate perceptions. I see it as part of my job to point out these inaccurate perceptions to these future customers. :grin: Of course each market has it's own idiosyncrasies but in general terms aggressive "market targeting" can be very lucrative in almost any/all markets.
:mrgreen:

Most of the pricing I've referred to is for weddings and are in the $40-$75pp range for what we are offering (china, servers, apps, salad stations, set up, clean up, etc.) I'm finding I get the attention of brides and book a few of them in the $37-$45pp range without ABC Service. I'd like to be in the $45-$60pp range for what we are offering but when I price at that range I loose htere attention quickly. So I believe that the "high end" caterers in my area are probably within that price range or a little higher and brides venture that way over barbecue and consider it a better option for the pricing.

I agree with you on the part about not trying to discourage newbies from getting into the business and I'm just trying to give them a realistic idea what is involved and I don't feel most have a clue (maybe I'm wrong) and I'm just trying to give a realistic view. It would be cool to have a documentary where a film crew followed your every move for one month and document what it takes to run a business. Not just barbecue but any business. Show the owner contemplating decisions and what all is involved. Show him or her up at 1am worrying about a job that could break him and his employees if something goes wrong. It would open the eyes to a lot of people who think all the boss is worried about is his boat and lake house and he has it made.

 

[bizznessman]

Most of the pricing I've referred to is for weddings and are in the $40-$75pp range for what we are offering (china, servers, apps, salad stations, set up, clean up, etc.) I'm finding I get the attention of brides and book a few of them in the $37-$45pp range without ABC Service. I'd like to be in the $45-$60pp range for what we are offering but when I price at that range I loose htere attention quickly. So I believe that the "high end" caterers in my area are probably within that price range or a little higher and brides venture that way over barbecue and consider it a better option for the pricing.

I agree with you on the part about not trying to discourage newbies from getting into the business and I'm just trying to give them a realistic idea what is involved and I don't feel most have a clue (maybe I'm wrong) and I'm just trying to give a realistic view. It would be cool to have a documentary where a film crew followed your every move for one month and document what it takes to run a business. Not just barbecue but any business. Show the owner contemplating decisions and what all is involved. Show him or her up at 1am worrying about a job that could break him and his employees if something goes wrong. It would open the eyes to a lot of people who think all the boss is worried about is his boat and lake house and he has it made.

I agree on all points. And it sounds like you may be up against a "local market" price wall in your area.

A documentary you say.........Hmmmmmmmmmm :mrgreen: