HTM 2514 1st Edition Lecture 5Outline of Last Lecture I. Permits, Licenses and Insurance Policies a. Incorporationb. Insurance Coveragec. Inspectionsd. ComplianceII. Growing your Businessa. Different approaches to the business (Culinary-driven or sales-driven)Outline of Current Lecture I. Pricing your Services and productsa. How to maximize profitabilityb. Pricing formula broken down Current LectureI. Pricing catering services can be challenging but it is key to success; companies just starting out need to estimate expenses for all aspects of operations; costs must be monitored constantly because cost of food/gasoline for vehicles, etc. changes all the timea. Maximizing Profitability – all services must include profit in their pricing because making a profit on products/services allow for more flexibility with overall pricing(services include equipment rentals, floral services, valet parking)i. Ex: Caterer has liquor license and makes great profit off selling wine, beer,cocktails at catered event versus a caterer who doesn’t have their license and loses possible profits they could have made selling alcoholb. Pricing Formula – there are too many to list, but here is a simple one:i. OVERHEAD + METERIALS + LABOR + PROFIT = PRICEThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.1. Overhead represent variable and fixed expenses of any catering businessa. Fluctuating expenses – salaries, utility bills, supplies, rental equipment, etc.b. Fixed expenses – equipment you’ve purchased, mortgage, marketing/advertising budget and insuranceOverhead expense you need to build into price of every catering job = Overhead costs for entire year / # catering jobs you expect to have (from your business plan/previous year’s tally/events you’ve already
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