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What Is the Profit Margin of a Catering Business?

2026-08-12

A catering business works on location at the client's site, without its own premises or a fixed pitch. That saves fixed costs, but makes transport, equipment and staff planning all the more important for your margin. In this article you'll read what counts as a healthy profit margin, which costs drive it, and how to work it out yourself.

What is a healthy profit margin for a catering business?

A healthy net margin for a catering business usually sits between 5% and 10%. That's higher than a restaurant, because you don't carry fixed rent for premises, but it's no gold mine either: you work on location at the client's site, and every event brings its own transport, equipment and staff costs. A business that prices its quotes sharply and plans peaks well reaches the top of that range. One that prices by feel and books staff late tends to land closer to 5%.

Which costs shape the margin of your catering business?

Ingredient costs are usually your biggest cost, typically 25-32% of revenue. Staff adds another 20-30% on top, often a mix of permanent staff and casual workers you bring in for peaks. Transport and logistics to venues account for 3-8%, depending on distance and whether you use your own vans or hired transport. Equipment and hire of tableware, tables and tents adds another 3-6%. On top of that you have the fixed base: insurance, bookkeeping, and possibly a prep kitchen.

How do you calculate the profit margin of your catering business?

The formula is the same as for any other catering business: (revenue − total costs) ÷ revenue × 100 = net profit margin as a percentage. Always work with amounts excluding VAT: the VAT rate on food and drink differs by country, and VAT isn't revenue anyway, it's money you collect on behalf of the tax authorities.

A worked example: your catering business turns over €30,000 (excl. VAT) in a month, spread across several events. Your costs are €8,700 on ingredients, €7,500 on staff, €1,800 on transport, €1,500 on equipment and hire, and €2,000 on fixed costs such as insurance and bookkeeping. Total costs: €21,500. Profit: €8,500. Profit margin: (€30,000 − €21,500) ÷ €30,000 × 100 = roughly 28% gross, and after deducting your own salary or owner's pay you usually land at 6-9% net.

Work this out per event too, not just per month, so you can see which types of jobs actually make you money and which mostly cost you time.

What factors influence your profit margin?

The size and type of event make a big difference. Large events with an elaborate menu bring in more revenue, but also more coordination and risk if something goes wrong. Smaller, recurring jobs for regular clients tend to be more predictable and easier to plan, even if the margin per event is smaller.

Season and spread matter too: a catering business with bookings throughout the year keeps staff and purchasing more stable than one that runs mostly in peak season and improvises the rest of the year. And how precisely you know your margins per dish determines whether you can quote sharply without shortchanging yourself.

How do you increase the profit margin of your catering business?

Start with your purchasing and food cost: work out each dish separately and track how much actually gets thrown away after an event, as we describe in calculating and monitoring food cost. Small savings on purchasing add up quickly on events with lots of guests.

Plan staff and transport as efficiently as possible around your events, so you're not paying for waiting time or duplicate trips. Software that tracks quotes, planning and purchasing per event, like Catermonkey, gives you direct insight into which jobs actually pay off and where your margin is leaking, without having to piece it together in spreadsheets afterwards.