How to Price a Catering Job Properly

Why catering quotes go wrong

Catering is the part of a restaurant business most likely to be priced by feel. The enquiry arrives with a number attached — a budget per head, or a competitor's quote — and the conversation starts from that number rather than from what the job costs. By the time anyone works out the cost, the price has already been anchored.

The second reason is that catering losses are hard to see. An event happens inside a trading week, its food comes out of the same inventory as the restaurant's, and its labour appears on the same payroll. Unless you cost the job separately, a bad event is invisible in the monthly accounts. Operators can run catering at a loss for years and conclude only that the business feels harder than the revenue suggests.

The fix is unglamorous: cost every job in full before quoting, decide the margin deliberately, and reconcile the actual cost afterwards. Three habits, none of them complicated, and together they turn catering from a gamble into the highest-margin revenue most restaurants have access to.

Start with the food, and be honest about portions

Food cost per head is the foundation, and it should come from an actual costed menu rather than an assumption. Price every dish on the agreed menu through a proper recipe costing, including yield loss on anything trimmed, and total it per guest.

Then add the service buffer. Catering does not permit running out, so you produce more than you strictly need. On buffet and canapé service, where guests portion themselves, the buffer is commonly 10–15%. On plated service with a confirmed headcount it can be far lower. Skipping this step is the single most common reason a catering job's actual food cost lands well above the quote.

A worked figure to hold on to: 120 guests at $18.50 per head is $2,220 of food. That is usually the largest single cost on the job, and it is also the one most exposed to menu creep. If the client adds a course during negotiation and the price does not move, the margin has just funded it.

The related discipline is the same one that governs pricing a menu item in the restaurant: price the specification you agreed, and reprice when the specification changes.

Labour is where the money actually goes

Ask an operator how many hours a four-hour event takes and the honest answer is usually four. The real answer includes two days of prep, an afternoon of packing and loading, an hour of travel each way, ninety minutes of setup, four hours of service, an hour of breakdown, the return journey, and unloading and washing at base.

That four-hour event is routinely twelve to fourteen paid hours per person. A team of four therefore consumes close to fifty hours, not sixteen. Quoting the sixteen understates the labour line by about two-thirds, and no reasonable margin survives an error of that size.

The hourly rate needs the same treatment. Use a loaded rate that includes payroll taxes, insurance, holiday accrual and any evening or weekend premium — catering happens overwhelmingly at premium times. A $22 base wage is often $28 loaded. On a 48-hour job that difference is $288, quietly removed from the margin. The labour cost formula that governs your restaurant applies unchanged: total payroll cost divided by hours paid.

If you take one thing from this section, take the habit of writing down the hour count on a timeline before quoting. Prep, load, travel, setup, service, breakdown, return, clean. Eight lines. Most underquoted catering jobs would have been caught by that list.

The costs that never make it onto the quote

Transport and equipment are individually small enough to feel not worth costing, which is exactly why they are collectively worth 8–12% of the direct cost of a typical event.

• Vehicle and fuel, including the second van you needed because the first was full
• Parking, tolls and loading dock fees at city venues, which can be surprisingly large
• Equipment hire charged by the day — a Saturday event often carries a Friday-to-Monday period
• Breakage and loss on hired glassware and crockery, billed after the event
• Ice, gas, cleaning materials and waste removal consumed on the day
• The recce visit, which is paid time and vehicle cost spent on this job alone

On a job with a 25% target margin, missing 10% of the direct cost removes roughly 40% of the margin. That is the difference between a job worth doing and a job that occupied your team for a weekend in exchange for nothing.

Margin is a decision, not a leftover

The mechanical part is simple: divide the direct cost by one minus your target margin. Direct cost of $4,124 at a 25% margin gives $5,498.67, or $45.82 per head across 120 guests. Adding 25% to the cost instead gives $5,155 and a real margin of 20% — a $344 difference on a single job, and one of the most common quoting errors in the industry.

The judgement part is choosing the number. Margin should track risk, not what you imagine the client will tolerate. Repeat drop-off work for an office you have served ten times carries almost no execution risk and can sit at 10–15%. A staffed event at a known venue with a confirmed headcount belongs in the 20–30% band. Weddings, unfamiliar sites, bespoke menus and compressed timelines belong at 30–40%, because on those jobs something will go wrong and the margin is what pays for it.

Pricing every job at the same margin means your easy work subsidises your difficult work. Clients with straightforward requirements will find someone cheaper, and you will be left with a calendar full of the jobs nobody else wanted, priced as though they were simple.

It also helps to remember what the margin is for. It is not profit — it is contribution towards the fixed costs you pay whether the event happens or not. Reading it through the lens of break-even keeps the distinction clear, and stops a busy season of low-margin work from being mistaken for a good one.

Quoting against a cheaper competitor

You will lose jobs on price, and some of those losses are the system working. A competitor quoting 30% below your costed price is either operating at a lower cost base, absorbing costs they have not identified, or specifying a different job. Only the first is a genuine competitive problem.

When the price is too high for a client's budget, change the specification rather than the margin. Fewer canapé varieties, a simpler main, buffet instead of plated, the client's own venue equipment instead of hire, a shorter service window with fewer staff. Each of those reduces cost, and the reduced price is still a price that pays.

Discounting the margin does the opposite. It sets an expectation the client will carry into the next enquiry, and it removes the only cushion the job has. A job quoted at 8% margin that runs 10% over on labour is a loss, and catering jobs run over far more often than they run under.

Close the loop after the event

The quote is a forecast. The value comes from comparing it with what actually happened, and almost nobody does this, which is why the same estimating errors repeat for years.

After each job, record the four lines again with real figures: what the food actually cost, what hours were actually paid, what transport and hire were actually invoiced. Compare with the quote. The gap tells you where your estimating is weak, and it is nearly always the same place twice — usually hours, sometimes equipment hire periods.

Do this on ten jobs and you will have a correction factor you can apply with confidence. It might be that you consistently understate hours by 20%, or that equipment always comes in $150 above the estimate. Either way you now know it before quoting rather than after invoicing, and your pricing stops depending on optimism.

The same reconciliation habit is what makes the prime cost figure useful in the dining room. Catering deserves it more, not less, because each job is a one-off and the errors do not average out on their own.

Frequently asked questions

What margin should I target on catering?

Between 20% and 30% for most staffed events, rising to 30–40% for weddings, unfamiliar venues or bespoke menus, and falling to 10–15% for simple repeat drop-off work. Set the number by execution risk rather than by what you think the client will pay.

How do I stop underquoting labour?

Write the timeline before you write the price: prep, pack, load, travel out, setup, service, breakdown, travel back, unload and clean. Total the hours from that list. It is almost always two to three times the service hours people quote from memory.

Should catering food cost match my restaurant food cost?

No. Catering typically runs 25–35% food cost against the quoted price, higher than a restaurant, because each dollar of catering revenue carries much heavier labour and logistics. Judge the job on food and labour together, not on food alone.

What happens if guest numbers drop after I have ordered?

That is what a guaranteed minimum is for. Set a cut-off seven to ten days before the event, after which the client pays for the guaranteed number. Your ordering and staffing commitments are made at that point and cannot be undone.

Do I charge for tastings and site visits?

Both cost real money on that specific job. Large events generally justify a charged tasting, often credited against the final invoice on confirmation. If you choose to absorb them, price them into the margin rather than treating them as free.

Should I add an overhead charge on top of the margin?

No. The margin is what covers overhead. Allocating overhead as a separate line and then applying a margin on top double-counts it and produces quotes that lose on price for no reason anyone can explain.

Is a service charge or gratuity part of the price?

Keep it separate from the costed price. If a service charge goes to staff, it is neither revenue nor margin to you, and folding it into the quoted price makes the job look more profitable than it is.

Run the numbers

Use the free Catering Quote Calculator to apply everything above to your own figures.