Every time I speak about the things that restaurant owners give away that they could be charging for, I have someone tell me they felt like I hit them across the head with a baseball bat. In fact, one man recently told me, “I'm so glad my wife couldn’t make it to your session. My legs would have been all bruised from her kicking me under the table. She’s been telling me for years that I’m giving away too much!”
What do I mean by giving away things you could charge for? Picture your next catering event. It's at a bank for 150 guests. In addition to the food and beverage service, you agree to provide plates, glasses, ice, waitstaff and removal of all garbage for the event. The problem is you aren't charging for all of these things. You're giving your catering clients too many freebies in the name of convenience.
Freebie #1: Providing glassware from your restaurant for the event. Restaurant owners do this because they own all of the glassware and it seems reasonable and easy enough to provide it for the event at no charge. They haul, store and clean all of that glassware without really thinking about the impact it has on their bottom line. For example, for 150 guests, you must provide two to three glasses per person, depending on the length of the event. That is a minimum of 300 glasses. You can fit 24 glasses in a crate, so that is 15 crates of glasses. You also need 160 8-inch plates and 140 6-inch plates. That is a total of seven crates of plates plus another crate of forks. So far, you have 23 crates. Those 23 crates will fill one and one-half vans or one truck. It will take a minimum of one and one-half hours to pack these items in crates and then pack the van or truck. An extra person will be needed with a dolly to unload the glassware at the event. This will take anywhere from 30 minutes to an hour to unload, depending on the venue. After the event is over the crates must be reloaded in the van or truck and driven back to your restaurant. After a 30-minute unloading period, the glassware, plates and forks must all be washed and moved back to the appropriate place in storage and an inventory must be taken.
Providing free glassware for the event cost you approximately seven hours of time you were not paid, but your staff was. Your staff hauled 23 crates back and forth to the event. After all the hauling, cleaning, inventory and storing, you paid the staff for a minimum of seven hours of labor. At $12 per hour, that equals $84. Add to that breakage or loss of utensils, which amounts to about a $60 loss. Add that in and you spent $144. You moved 23 crates of glassware and plates for $0.
Freebie #2: Providing ice from the restaurant at no charge. A 600-pound ice machine produces a lot of ice, so it doesn't feel like an imposition to many restaurant owners to add it onto their catering services. You tell the client, “Of course, we’ll provide your ice. It's no problem.” You have someone bag the minimum amount of ice needed for this event, which is around 350 pounds, and store it in your freezer. You have to haul it to the event in your large ice chests (that your staff had to clean the day before because they smelled like fish.) They unload the four large ice chests and haul them up three stories. Then you realize that it is over 85° that day, and you really need more ice. Therefore, you quickly return to the restaurant, pack more ice and repeat the whole process — for $0.
Freebie #3: Providing garbage service at no charge. Have you ever really looked at the amount of garbage 150 guests produce? There are beer and wine bottles, soda cans, napkins, food scraps, etc. Garbage is a pain to haul away. It leaks and your vans stink for days. But like many restaurant owners, you want the catering job and you want to please the client, so you agree to haul away the garbage from the event for $0.
I hope this list of mistakes made an impression on you. These are three simple ways you are providing a huge convenience to your clients. If clients had to rent these items, it would cost them a minimum of 50 cents per plate, 50 cents per glass and 50 cents per fork. Plus they would be charged at least $50-75 for delivery and pickup. If you want to provide the glassware and plates for your clients – charge them the same or a discounted amount that a rental company would charge them. If they balk at the charge, then tell them you were providing them a service, and give them the phone number of the nearest rental company and let them take care of it themselves. Believe me, they will call you back requesting the convenience you offer.
The same idea applies for the ice. In Dallas, the minimum ice delivery is 350 pounds and the cost is $90. Of you want to haul all of that ice, then at least charge them what the local ice company would charge for ice plus delivery.
When it comes to garbage, in my catering company, we will only haul away garbage in a truck owned by one of our employees versus a company van. We charge the client a minimum of $150-200 to provide that service. I pay my employee who hauls it a minimum of $125 to do that dirty job.
Your client hires you for convenience and you don’t have to give it away for free. You must charge for it or you are wasting your time and leaving profits on the table in the process.