The Importance of Recipe Costing Cards

recipe costing cards

Why If You “Generally” Know What Your Protein Costs, You “Generally” Aren’t Making Money


Catering events is like a restaurant on steroids when it comes to creating memories. Some events are as simple as a product drop off and others have elaborate sets and table settings, but they all take creativity, salesmanship, incredible customer service and business acumen. The challenge for most caterers is that creativity; salesmanship and customer service are what excite you. The business acumen not so much. The perfect example is thinking more revenue means more profits. I often hear caterers say, “I generally know what my proteins cost, and I can sell this event for this much.”

David Scott Peters
David Scott Peters

Let me be perfectly clear, catering profits are measured in pennies, not dollars. That means if you say that you “generally know what your proteins cost” and use that to price an event, I promise you, you’re not making the money you should be and sometimes you might even work your butt off for nothing.

A few summers ago, I had the unfortunate experience of purchasing tires for two cars on the same day. Now, I’m going to go out on a limb here and say you’ve purchased tires for your car at some point in time. This means you’re familiar with stacks of tires in tire retail stores with a price sign placed on the top of them. In looking at that price, do you think the manager woke up, got ready for work, got to the office, got a cup of coffee, walked onto the showroom floor, looked at the stack of tires and picked a price for those tires out of their butt? Or do you think that manager knew what each tire cost them, and what he or she needed to sell that tire for to make money? They know their costs, right?

Then why is it caterers go to their chef and let them know what the client wants, pause, think about it and then blurt out, “We can do that for $X per person?!”

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The short answer is there is a misconception in catering that if you cover the cost of the proteins that the starches, etc., can all be estimated, and you will make money. This couldn’t be further from the truth! If you don’t cost out every recipe and every party, you are throwing your profitability to dumbass luck.

The key to making money in your catering business is you must have accurate, up-to-date recipe costing cards. With recipe costing cards you will know not only how much you are making on a single item, you will be able to know how much money you made each month!

The first recipe costing cards to tackle are your batch recipes. Batch recipes are all the soups, side dishes, sauces, dressings, trays of products, etc., you produce in-house as ingredients to be used in final items you sell vs. products you purchase from vendors that are ready to use. For example, a beef tenderloin that you use in two-ounce portions starts as a batch recipe to figure out what each two-ounce portion costs to be used in a tray of 50 beef tenderloin sandwiches.

Once your batch recipes are complete, you can complete your item recipe costing cards. These cards are used to cost out the final product you are selling your client to figure out what you need to sell it for and how much money you will make on the event.

With recipe costing cards and the quantities sold for each party, you can quickly see what your food cost is going to be for each and every event! Take a look at the example below. This client wants to put on an event for 50. They have chosen a tomato mozzarella salad, chicken bruschetta, beef tenderloin sandwiches, chicken parm with linguini and beef lasagna. When you list out the cost of each item, the sales price and the quantities, you will easily see your food cost for the party and how much money you will make before any other charges are included. In this example, the Katz Reception Dinner will have a food cost of 20.55 percent and make you $1,820.91 on a $2,292 event.

When you know your food cost for each event and the price you sold the food for, all you need to do is list out that information for the month and in seconds you know what your food cost was for the month! In the example below, the food cost of each party was 21.01 percent, 23 percent and 25 percent. But when you combine them, you get a weighted average or ideal food cost for the month of 23.67 percent and know you made $7,967.19 on food alone.

No more guessing, no more you “generally know,” no more working for nothing. Instead with accurate, up-to-date recipe costing cards, you will not only sell, create, serve and create memories, you will also make money!

David Scott Peters
David Scott Peters is a restaurant expert, speaker, coach and trainer for independent restaurant owners. He is the developer of SMART Systems Pro, an online restaurant management software program helping the independent restaurant owner remain competitive and profitable in an industry boxed in by the big chain restaurants. Download a free report to discover the #1 secret to lowering food and labor costs and running the independent restaurant you’ve always dreamed of. Learn more about how David can help you at http://www.TheRestaurantExpert.com.