Incorporating Food Prices and Staffing into Your Quotes

Incorporating Food Prices and Staffing into Your Quotes

By Clint Elkins, SB Value

Profitable businesses are built on an effective pricing strategy, which starts and ends with accurate customer quotes. Too high and you may price yourself out of contention; too low and you risk eating into your bottom line. Calculating the sweet spot in pricing requires proper valuation not just of the end product but the cost of goods and services that go into its execution.

As you build customer quotes, two of the most important (and often most confusing) areas to price are your food prices and staffing costs. With supply chain concerns, increased inflation, and a tough employment market, it’s more crucial than ever to ensure your quotes adequately reflect your expenses to keep your profit margins healthy.

Develop a staffing strategy.

Staffing costs can get confusing without a reliable system to follow, so get clear on how many people are required for any given circumstance. For instance, a gala with 500 guests and six bars has a much different need than an intimate wedding of 40 people with table service only. 

Rather than generate a new estimate for every quote, create a matrix that calculates the number of team members required based on headcount and additional elements. It may be one server per ten guests, two bartenders for every bar, four line cooks for every 100 people, and so on. Revisit past events to determine the correct numbers for your team.

With a staffing strategy in place, you can assign costs based on your pay scale, benefits, and other compensation. For example, will you charge a flat rate per person? Hourly? However it measures out, a plug-and-play staffing formula streamlines your sales process while producing consistent pricing that keeps your clients, your employees, and your profit margins happy.

Be mindful of market trends.

Food prices are the fluctuant expenses, as ingredient costs rise and fall with the market. Anything from holiday surges and viral TikToks to supply chain blockages can influence how much you spend on food, so your quotes must reflect your expenses accordingly. For instance, the cost of goods for a stuffed turkey entree is inevitably higher in November than in June due to supply and demand.

Watching the market and understanding how your expenses will change is vital to keeping your client quotes accurate and profitable. While you may book a Christmas party in July, your estimates must factor in peak holiday pricing — not mid-summer costs. 

Similarly, staying tuned into food and beverage trends can help you price accurately. For instance, if you notice everyone buzzing about turmeric as the latest must-have superfood on social media, you can expect increased demand and prepare accordingly.

It’s helpful to look back at food purchases from previous years to note the ebbs and flows in the market, just like you track the changes in your sales throughout the year. When do certain ingredients get popular? How often have you needed to rely on substitutes due to high demand? Historical data will help you price smartly for the future.

Determine your ideal profit.

You’re not in business to break even, so consider how much you want to profit from an event after all of your internal expenses are covered. Do you want to take home 10 percent in pure profit? 25 percent? Remember: Pricing far above market value can send prospective customers elsewhere, so be realistic and keep it within reason.

Be mindful that your pricing should also include a bit of padding to cover variable market items and unforeseen circumstances, so run your numbers and figure out a comfortable percentage that won’t cut into your bottom line.

While every quote should be personalized to its customer’s needs, that doesn’t mean you have to recreate the wheel for each new lead. A reliable pricing system that factors in market changes and protects profit margins will help you build better, more accurate quotes that win over customers, pay your staff well, and keep your business in the black.

Clint Elkins is the V.P. of Sales for SB Value, a Group Purchasing Organization that helps culinary professionals save an average of 16% on every food order. Membership is 100% free. No hidden fees. No extra work. Just extra profits. See how much you can save on your next food order when you become an SB Value member. Request a quote today.