Catering and events as a sales channel: is it worth it

Catering and event orders give you large sales in one go, paid in advance and with no app commission. In exchange they take whole days of kitchen time, usually at weekends, and you have to quote before you know every detail. Catering is worth it when the event's contribution per kitchen hour matches or beats your normal sales, the deposit covers what you will spend, and you can do it without letting your regular customers down.

What changes compared with your everyday sales

Day to day, you make batches you know, at a fixed price, and sell a few at a time. An event changes three things.

• Custom price. Every order has its own quantity, presentation and delivery address. There is no price list, only a quote.
• Money up front. The client pays part before you buy ingredients. Handled well, an event needs none of your own cash.
• Blocked capacity. A Saturday wedding takes all of Friday and Saturday morning. Those hours are no longer available for the farmers market, direct orders or the delivery apps.

The third point is the one people forget. The event has to pay for its ingredients and also for what you would have earned in those same hours doing your normal selling. The guide to choosing your sales channels covers the full picture; here we stick to what is specific to catering.

The quote: what it needs to cover

A good quote prevents half the problems. Before you give a price, ask and write down:

1. Quantity and date. How many pieces, for how many guests, which day and what time.
2. Presentation. Paper cases, platters, individual boxes or a full dessert table. Each one changes the cost and the hours.
3. Delivery. Address, stairs or a lift, whether you have to wait or set up on site.
4. What is included. Whether you bring your own platters and collect them later, leave disposables, or stay to serve.

With that you can build the price using the method in how to price a catering order: variable cost of the order, kitchen hours, delivery and the margin you need. In the quote itself, write the total price, the deposit, the date by which they must confirm and the date until which the deposit is refundable. Give it a short validity, because the wholesaler's prices will not wait for the client to decide.

The deposit

The deposit has one job: making sure you never fund someone else's order with your own money. The minimum rule is that it covers everything you spend before delivery: ingredients, packaging, platters and fuel. If the order is large and you buy days in advance, take the deposit before that shopping trip.

A simple setup is half on booking, by card or bank transfer, and the balance before or on delivery. If half does not cover your costs, the price is probably too low. Fix the price before you ask for a bigger deposit.

Spell out what happens if they cancel. Up to a certain date you refund the deposit; after that you have already bought, and the deposit stays to cover what you spent. Written down, there is nothing to argue about.

Capacity: what you stop selling

This is the calculation that separates a good event from one that only looks good. Work out two numbers:

• Event contribution = quoted price − variable cost of the order (ingredients, packaging, presentation and delivery).
• Contribution per kitchen hour = event contribution ÷ the hours it takes, counting production, plating and delivery.

Compare it with what a normal hour earns in your best channel. If the event earns less per hour, it only makes sense when those hours would otherwise sit empty. To make that comparison across all your channels, see the guide to comparing profit by channel.

Worked example: 150 brownie bites for a wedding

You are asked for 150 brownie bites for a wedding dessert table on a Saturday. You quote $1.20 each because that is what you have seen others charge.

Variable cost of the order:

Hours: 5 baking and cutting, 1 plating, 1 delivering = 7 hours.

At $1.20 each:

• Total price: 150 × 1.20 = $180.00
• Contribution: 180.00 − 80.00 = $100.00
• Per kitchen hour: 100.00 ÷ 7 = $14.29

What you give up: that Saturday you skip the farmers market. A normal market Saturday leaves you $175.00 of contribution after the stall fee, in 7 hours between baking the night before and selling. That is 175.00 ÷ 7 = $25.00 an hour.

The event earns you $10.71 an hour less than a normal Saturday, or $75.00 less for the day.

The price that matches your Saturday:

• Contribution you need: $175.00
• Total price: 80.00 + 175.00 = $255.00
• Per piece: 255.00 ÷ 150 = $1.70

The deposit: half of $255.00 is $127.50, which covers the $80.00 of variable cost. Half of the $180.00 quote, $90.00, would also cover it. Here the deposit was never the problem; the price was.

If the client will not pay $1.70, you have three options: simpler presentation, having them collect to save the $12.50 delivery, or saying no and keeping your market day.

Now change one fact. If that Saturday was empty anyway, $100.00 for a day that would have earned nothing is a fair deal. The same quote can be good or bad depending on what your week looks like.

When catering works and when it does not

It works when:

• The order falls on days your normal sales do not use, or its contribution per hour matches or beats your best channel.
• You can make something you already know well in large batches, without developing a new recipe for every client.
• The client accepts a deposit, a confirmation date and written terms.

It does not work when:

• Every event asks for a new product you have to test and cost from scratch.
• The order is small and the drive is long, so delivery eats the contribution.
• Delivering on time means letting down regulars who buy from you every week.

One way to keep this under control is a minimum order, say 100 pieces, plus a delivery charge by distance. Orders below the minimum go through your normal sales at your normal price.

If someone offers to stock your products in their shop and pay you only for what sells, that is a different deal with different risks. The guide to consignment selling explains it.

Do it with the calculator

Put the recipe into the food cost calculator with the margin you want to get your cost per piece and base price. Then add the event's presentation and delivery, as in the example, and compare the contribution per hour with your normal sales.