How to Set Catering Prices

by Brenna Swanston; Reviewed by Michelle Seidel, B.Sc., LL.B., MBA; Updated April 09, 2019
Consider the type of food setup when pricing a catering event.

Consider the type of food setup when pricing a catering event.

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Running a catering company requires a lot of moving parts – transporting the food and kitchen equipment, determining the quantity of food needed, and setting up and tearing down. Each event is unique, but one factor remains consistent in caterers' pricing strategy: the food markup.

You might value the dishes you're serving at about $20 per plate, meaning you can – and probably should – price them at $40 each. The food markup is expected and necessary in the catering world to cover operational expenses, of which there are many, so don't feel too bad for potentially doubling that per-plate fixed value, which is the cost of ingredients plus labor.

Catering is so much more than just food and cooking, and the price tags reflect that. Here are a few other pricing factors to take into consideration:

Determine the Type of Service

What's the event in question? Does it call for an informal buffet-style dinner, or does it require table service? A buffet comes at a lower price since it means less work and fewer hands. Table service, on the other hand, requires an experienced waitstaff on top of the usual equipment, ingredients and labor, so you'd mark up the price for that type of service.

Hike Prices Seasonally

An outdoor wedding reception in August might call for backup tents or canopies in case the weather takes an unexpected turn for the worse. That's an extra expense for you and a higher price tag for your client. Events during the holidays might put your services in higher demand and potentially hike wages for your waitstaff, again resulting in a higher price for your clients.

Take a look at the calendar to get a sense for the weather forecast and holidays, and judge how those might factor into your service pricing.

Plan for Extra Guests

You know how it goes – Aunt Myrtle wasn't supposed to bring a plus-one, but she did. That weird second cousin on Dad's side wasn't even invited, but here he is. To play it safe and smart, a caterer always makes extra food. While some of it will go to good use, some will inevitably find its way to the compost.

Plan to prepare 10 percent more food than you're asked to, and rely on your markups to cover it. Otherwise, you'll just have extra plates chipping away at your profit margins.

Marketing, Marketing, Marketing

Caterers can do well on word-of-mouth, as well as in partnerships with event venues and planners, but you're still running a business, and you still have to market it – and that means creating an image.

This image factors into your pricing. If you're portraying your catering company as particularly economical, you have to price lower than the competition. If you're banking on the quality of your food, you can mark up those plates to above 200 percent of their fixed price. It all depends on your marketed image and how well you live up to it.

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