How to Price Catering Without Undercharging (From a Working Caterer)

You quote a price that feels about right. You win the job. You shop, prep, cook, drive, serve, clear down — and at the end of it all, somehow there's barely any profit left. Sound familiar?

If it does, you don't have a pricing problem. You have a costing problem — and once you fix that, the right price falls out of it almost automatically. Here's how to do it properly, so you stop working weekends for the fun of it.

Most caterers don't have a pricing problem — they have a costing problem

When a quote comes out too cheap, it's almost never because the caterer "charged too little" on purpose. It's because the price only covered the obvious cost — the food — and quietly missed everything else. If your price doesn't carry a share of every real cost, you're not making the profit you think you are. You might even be subsidising your own customers.

So before you think about price, you have to nail cost.

The costs caterers forget

Here's what a catering job actually costs you — and where the profit disappears when you leave bits out:

• Food — the obvious one, and usually the only one people count.
• Labour — prep, service, drivers… and your own hours. If a job only "makes money" because you worked for free, it didn't. Put an owner-labour line into every quote.
• Consumables — disposables, packaging, cleaning, the little stuff that adds up.
• Equipment & hire — anything you rent or run.
• Delivery & travel — fuel, vehicle, the driver's time.
• Overheads — insurance, website, phone, admin time. Every job carries a slice.

Add all of those up, and that's your real cost. Now you can build a price on top of it — not before it.

The mistake that quietly kills profit: markup isn't margin

This one catches almost everyone. Say a job costs you £1,000 and you "add 30%." Your price is £1,300 — but your actual margin is only 23%, not 30%. To genuinely make a 30% margin:

Price = cost ÷ (1 − margin) → £1,000 ÷ 0.70 = £1,428.57

Cost-plus-a-percentage feels right and leaves money on the table every single time. Always work backwards from the margin you actually want.

How to price a job, step by step

• 1. Cost the food — per head, from real ingredient prices.
• 2. Add labour — prep, service, drivers, and your own time.
• 3. Add consumables, equipment and delivery.
• 4. Add a share of overheads — every job carries some.
• 5. Add your margin — deliberately, using the ÷ (1 − margin) method.
• 6. Check it clears your minimum.
• 7. Add tax on top — VAT is passed on, not earned. Never count it as profit.

Know your minimum — and hold it

Set a minimum spend below which a job isn't worth doing. A small job that doesn't clear your minimum costs you more than politely saying no — your fixed costs and time don't shrink just because the order is small. Decide your floor, and don't quote under it.

The one number that tells you the truth: your effective £/hour

Here's the sanity check that reveals undercharging instantly. Take the fee you're about to quote and divide it by all the hours the job will really take — planning, shopping, travel, cooking, service, clear-down. That's your effective £/hour.

Quote £200 for a job that eats 12 hours and you're earning £16 an hour — before you've paid for a thing. See that number before you send the quote, and you'll never accidentally work for minimum wage again.

Written by Lee, a working event caterer and founder of The Catering Toolkit — the back-office system behind a real catering business.