This is an excerpt from Chapter 9 of Hot Dogs Saved My Life:
Catering benefits include having a set time for the job and usually a set price, which means you know what you are going to make before you begin. One hot dogger wrote me about his ten-year stint at a car dealership. He worked every Saturday for a flat rate of $600, his take home about $420. Not bad for one day of work.
You will get the occasional, “Can you do my little Johnny’s birthday party?” Remember, it will take the same effort to set up and clean up after serving thirty hot dogs to some children, as it would if you served 400 dogs to an office party.
I don’t do the little parties and I have a minimum I charge. Your minimum may be different but, whatever it is, stick to it. You can determine your minimum with a little simple math: figure what the minimum you are willing to do the job or event. Let’s say it’s $150. Remember, you will have set up and clean up, and you will probably only want to agree to one hour there for that fee.
Divide the $150 by $5.00 (or whatever price you decide to charge for your meal). In this case, 150 ÷ 5 = 30.
Add it all up and there is your minimum. Costs per meal can vary depending on whether you are serving eight-year olds or eighteen-year-olds. I use this method to calculate any catering:
I want to bring in the same as if I had sold 100 meals.
My meal price is $5.00, and I give them a $1 discount ($4.00) and my minimum is $400. This covers up to 100 meals (two dogs, drink and chips). This guarantees you a $400 income, less your costs of about 32%. You actually profit about $280. Keep in mind, if they get a larger turn out than expected, let them know up front that you will prorate the additional meals at the same rate.
I am very fair when it comes to doing this. I don’t count all the drinks they take, I don’t worry about the guy who ate five hot dogs; I just simply serve food and let them have fun.
Let’s say I bring 300 buns – that’s 100 extra, and I know I will use approximately 200. When I finish the event/party, I will quickly count my buns. If I have eighty left, I don’t worry about the extra twenty. But, if I have seventy left, I charge for ten extra meals. I essentially give them a fudge factor of twenty meals for those big eaters or that kid who drank twelve Mountain Dews. Most of the time, the person hiring you will overestimate the turnout; if they estimate 200 people, I will charge them $800. If they use less, I keep the difference. I don’t verbally price it to them at $4.00 a meal. I base it on the number of potential people. In the example above, that is $4.00 per person.
Is that clear as mud now? Good.