Your Greatest (And Most Controllable) Catering Cost

Besides for labor, does your catering business have other high volume costs that you think can be better controlled?
Table setting at a luxury wedding and Beautiful flowers on the table.

“You must spend money to make money” is a famous phrase attributed to the Roman philosopher Titus and was as true two thousand years ago as it is today.

It’s nearly impossible to succeed without investing money in supplies, products, people, advertisement, or other business expenses, especially when you’re working in events and catering.

With each event that you profit from, you’ve got your own no small number of expenses that are necessary in order to make your event, well, rise to the occasion.

You should know how much your costs are actually costing your business. And more importantly – is there a way to cut back on costs without lowering your standards?

The catering cost breakdown

Let’s break this down together.

Your expenses can be segmented into two categories — Fixed and Variable Expenses.

Your Fixed Expenses include things like rent, utilities, equipment purchases and supplies. These costs don’t fluctuate according to revenue.

Your Variable Expenses are primarily dependent on your sales volume. These include materials like food and beverages, rentals, venue fees, disposables and labor cost.

Generally, your fixed expenses can’t be changed easily, but that’s alright – they’re easy to budget they typically stay the same and are paid regularly.

Although your variable costs may vary each month (and thus the very definition of the expression) some are more necessary than others, some need a higher allocated budget and some need to be cut.

By understanding what your fixed and variable expenses are, you can build an effective budget and evaluate where your costs can be tinkered and improved.

The highest (and most controllable) expense

Ask yourself a few simple questions:

Who is finding your staff?

Who is paying your staff payroll?

Who is spending time to make sure staff salaries are based on dynamic details — individual working hours, different positions, travel reimbursements, tips?

Who is making sure your staff are trained properly before the gig?

Who is spending time contacting your staff to keep them informed about the job?

Oh, that’s right, YOU are.

Your labor cost is your greatest catering expense. Staffing needs, rostering and service costs are all processes that take up the most amount of time, energy and money.

Fortunately, the catering labor cost is also your most controllable cost.

Tips for taking back control

Controlling the amount you spend on the staffing and labor process in your catering business is important to the overall profit of your entire company.

This cost doesn’t stand alone. It is a cog — a large cog — in the machine of your catering operations.

Here is what you can do to control and minimize your labor cost:

1. Reduce employee turnover

You spend time and money on the process of recruiting and training new staff for an upcoming event or job, right? 

There is perhaps nothing more costly than high employee turnover rates. There are small changes you can make in the workplace to increase your employee retention. You can avoid turnover by offering incentives, making sure to publish fair shift schedules, clear working hours, and creating open channels of communication.

2. Review and analyze budgets consistently

The catering business is dynamic and affected by season, occasions and demand. 

Make sure you review what you’re spending your money on each month and how it relates to the larger picture of your profit and your budget according to your schedule. 

This will help you control your payroll cost, minimize unnecessary spending and run your catering business with improved financial efficiency.

3. Consider investing in a smart solution

The personalized touch in catering is something that can’t be replaced by technology. 

No one wants to waste their time on repetitive, menial tasks! The time spent on following up on your catering operations and labor financials is time and energy that should be funneled elsewhere. 

Catering companies use event management platforms to boost productivity and improve control of spend and profit. If you’re ready to take your business to the next level, find the platform that fits your needs and start making better financial decisions.

Food for thought – let’s rank it

Besides for labor, does your catering business have other high volume costs that you think can be better controlled?

Event planning
Food and beverage
Marketing and design
Tracking inventory
Collecting feedback

Make a complete list for yourself and see how you rank your expenses!