Stay on top of all the trends and challenges facing your business today - including legal advice, ways to maximize profits, how to build a winning team, and much more. Industry-leading experts provide gold-standard education content that's practical and relevant to YOU!
View archived Business Builder articles.
July's Featured Speaker: Sandy Korem
Sandy Korem is CEO and Founder of The Festive Kitchen and also The Catering Coach. Sandy will be speaking on Sunday, August 17 at the 2014 Western Foodservice & Hospitality Expo and Expo Comida Latina and Sunday, September 8 at the Florida Restaurant & Lodging Show.
Restaurants That Cater - Set a minimum to save you money
Here’s a key difference between restaurants and catering: When a restaurant receives a reservation for a table of 12, it is happily welcomed; big parties are good for business. But if the call comes in requesting catering for 12, alarms should start sounding because it’s not good for business. With a party that small, you will probably lose money.
Any time food leaves your restaurant for an off-site event it costs you more money to produce and facilitate. You can’t charge the same prices for off-site that you charge in the restaurant. Even if the lunch budget is $20 per person, are you going to make any real profit? No. It costs so much more money and time to cater off-site for 12 compared to serving food for 12 guests sitting outside your restaurant kitchen. It’s because you have so many more responsibilities when catering, and they all cost money!
For example, you have to consider that you will need to:
- Package and move the food.
- Keep the food at the correct temperature for an extended period of time.
- Invoice for the delivery.
- Deliver the food.
- And more!
One of my most important recommendations for catering success is to set a guest minimum for your catering jobs. My company has a minimum of 30 guests for any off-site commitment. Do note that the profit margin is still small for a party of 30. To offset this a bit, it is important to line item the plastic ware, staff, ice, rentals, etc., making a profit off of each item to boost the bottom line.
Another request that should sound the alarm: boxed lunches. Boxed lunches are money losers! Cost of goods is generally 45 percent and then the client will only order 10. Run! Boxed lunches are time and money down the drain.
Be confident in your restaurant and don’t be afraid to turn down the business. Sure, your gross will be higher but your net is lower. So why do it?
Instead, offer a referral to the restaurant down the street that doesn’t know any better!
You know the saying: work smarter, not harder. It definitely applies to running a catering business.
If you’re just adding a catering business to your restaurant, or if you’re thinking about it, I’d love to talk to you. There are so many things you have to do differently when catering vs. serving in your restaurant. Catering is an incredible addition to your revenue stream and there is a right way to do it. You can find me at www.TheCateringCoach.com.
More about Sandy Korem:
Sandy Korem is the CEO and founder of The Festive Kitchen, a one-of-a-kind catering company based in Dallas. No other catering company in America has established such a diverse and profitable “take-home catering” division. In 2008, Sandy was awarded the White House Food Service Medallion for outstanding service to President George W Bush. Her company, The Catering Coach, teaches independent restaurant owners how to increase sales and profits with little or no investment. Reach her at Sandy@thecateringcoach.com or (866) 484-3056.
July Business Builder - Restaurants that Cater - Set a Minimum to Make You Money by Sandy Korem
June Business Builder - 5 Leadership Traits Required for Growing Restaurant Business by Darren Denington