How do you calculate prices for a catering quote?
Putting together a catering quote means more than adding up ingredient costs. You need to understand what a job actually costs before you can set a fair selling price. Price too low and you work for nothing. Price too high and the client goes elsewhere. This article walks you through calculating prices that are both competitive and profitable.
Why getting your pricing right matters
Many caterers underestimate their costs. They account for ingredients but overlook the preparation hours a chef puts in, fuel costs for transport, or the clean-up time after an event. The result: a job you work hard on but barely make money from.
A solid pricing calculation gives you a clear picture of your actual margin on every job. That matters not just for today's cash flow, but for making deliberate decisions about which jobs to take on as you grow.
Which costs to include
Before you can set a price, map out every cost category. These typically fall into five groups:
- Ingredients: raw materials for all dishes, plus a safety margin of 5-10% for waste and spoilage.
- Staff: gross hourly rate plus employer contributions for chefs, front-of-house and transport staff. Include set-up and breakdown time, not just active service hours.
- Transport and logistics: fuel, tolls, van hire if needed, and parking fees at the venue.
- Equipment and materials: hire or depreciation of chafing dishes, crockery, gazebos, tables and anything else you bring.
- Overheads: a proportion of your fixed costs such as kitchen rent, insurance and admin, spread across the number of jobs you take per year.
How to calculate cost per person
The simplest method is to work out your cost per person first, then scale up to the total guest count.
Say you are catering a lunch for 80 guests:
- Ingredients: £10 per person
- Staff (4 people, 6 hours, £18 gross/hour): £432 total, or £5.40 per person
- Transport: £70 total, or £0.88 per person
- Equipment: £100 total, or £1.25 per person
- Overhead allocation: £1.50 per person
Total cost: £19.03 per person. With a 30% margin that becomes roughly £27 per person, or £2,160 for the whole job.
What margin should you aim for?
For catering businesses, a healthy margin typically falls between 20% and 35%, depending on the type of event:
- Corporate lunches and smaller events (20-25%): high competition, clients compare quickly. Volume is your friend.
- Weddings and formal dinners (28-35%): more bespoke work, higher expectations. Clients pay for quality and peace of mind.
- Festivals and large public events (25-30%): economies of scale, but more logistical risk.
Use the formula: selling price = cost divided by (1 minus the desired margin). With a cost of £20 and a 30% margin target: £20 / 0.70 = £28.57 per person.
How to handle variable and unexpected costs
Some costs are hard to pin down in advance. Show them separately in your quote so the client understands what they are paying for:
- Weekend and evening supplements: staff working Saturday evenings often cost more. Pass this on directly.
- Contingency buffer: set aside 5-10% of total costs for the unexpected, such as equipment failure or a higher final guest count.
- Cancellation terms: specify in your quote what happens with late cancellations so any costs you have already incurred are covered.
- Travel beyond your standard area: jobs far from your base cost more. Calculate a per-kilometre rate or a day rate for the driver.
Frequently asked questions
What is a normal profit margin for a catering business?
It depends on the type of work. For corporate catering, a net margin of 20-25% is typical. For weddings and formal dinners you can push this to 28-35%. The key is including all costs correctly, so your stated margin actually remains after everything is paid.
How do you calculate ingredient costs accurately?
Work out how many grams of each ingredient you need per person, multiply by the purchase price per kilogram, then add a 5-10% safety margin for waste. With complex menus this adds up quickly, so use a spreadsheet or software that calculates this from your recipes automatically.
Should VAT be shown separately in a catering quote?
For business clients, yes. Show the net price and add VAT separately so they can reclaim it. For private clients such as weddings or birthday parties, show the total including VAT. Always state clearly whether amounts are inclusive or exclusive of VAT and at which rate.
How do you avoid underquoting?
The most common mistake is looking only at ingredient costs. Use a consistent checklist that covers every cost category: staff, transport, overheads and a contingency. Compare your final cost per person with your historical average for similar events. If a new job comes in well below that, go back through the calculation before accepting it.
How do you price a quote when the guest count is not confirmed?
Build your quote around a minimum and maximum scenario. Separate fixed costs such as transport and set-up from variable per-person costs. This lets you quote a per-person price while making clear that fixed costs apply regardless of the final guest count.
Catermonkey calculates your cost per person automatically from your recipes and quantities, so you always know whether your quote adds up.
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