How profitable is your catering business? Some caterers experience a pretax profit of over 25%, while others are barely able to show a profit. Generally speaking, the average pretax profit for caterers is between 7% and 8%.
Having an accurate, up-to-date picture of how your catering company is performing financially is crucial so you can not only survive but also thrive. Tools for improving the profitability of a catering company include:
- a true and transparent understanding of your food and supply costs.
- a system for tracking the Return on Investment (ROI) of each event.
- easy access to the high-quality products you need at the lowest cost possible.
This is where Key Performance Indicators (KPIs) come into play and can help you spice up your profits. Some specific KPIs for caterers include food cost, event labor cost, kitchen labor cost, revenue per guest, gross sales, customer satisfaction and more. Increasing your net profit is not going to happen by simply charging more. Knowing your numbers and what they mean—and then taking the right action to improve those numbers—is the only way to increase your net profits.
The Source1 Purchasing Solution
If you need help understanding the true costs of your ingredients and supplies, you will benefit by working with a partner such as Source1 Purchasing. You will know your numbers, reduce your costs and benefit from a collective buying model that gives you bigger buying power. You will:
- save money in every category through pre-negotiated pricing applied to thousands of food and beverage products, operating supplies and business services.
- track your purchasing ROI for all locations using a secure, cloud-based portal.
- eliminate processing charges to capture 100% of earned rebates.
- compare food and beverage products from 750+ manufacturer brands.
- rapidly connect to suppliers and find the best products to meet your quality and cost goals.
- improve buying efficiency using comparative analytics and performance dashboards.
- gain insights from data and purchasing patterns provided by account support experts.
- lower contract lifecycle costs with improved tracking for pricing updates and renewals.
- eliminate in-house contract and rebate administration costs.
Best of all, you’ll avoid up-front costs, ongoing fees, compliance minimums and long-term contracts.
Click here to get your free Supply Chain Analysis. (Typically, a Supply Chain Analysis will identify savings opportunities of 7%-12% or more!)