Expert: Kay Cole - 1/5/2010

Question
QUESTION: How do I go about pricing for soups?  I am also approaching restaurants to sell my desserts.  How do you set a price for pies, bar cookies, cheesecakes?

ANSWER: Hi ~ is the sales price you are looking for help with on soup for a course with a meal you are catering? Or, just to sell retail a Qt. of soup - Or, wholesale to restaurants?

~ Regarding selling desserts to restaurants: I may not be the person to ask regarding wholesale pricing as do not have experience in this area...but, if I were you, I would do a little homework before calling on any specific restaurants - make sure you are not wasting your time on a restaurant that has a pastry chef on staff....also, find some that are buying and serving convenience prepared products that might welcome homemade items to offer on their menu.  Also, check their menu pricing of desserts as well as cost of same or similar with a distributor...even though a homemade product might be much better, they might not be willing to increase their pricing right now. Would you be happy with the profit margin? Your labor will be your biggest expense.....if it is just you on the payroll...do not sell yourself cheap!

I am assuming that you are professional caterer with a health department approved kitchen???Licensed??? And, insured???  I would doubt that any restaurant could purchase prepared products, if not.

Another piece of unsolicited advice...before you make any deals or contracts with a restaurant...remember that guy on the old Dunkin Donut commercial - at 4AM "I gotta make the donuts..." You may already have a bakery with a staff,  and are already "making the donuts" - but, if not - and it's just you....once you are committed - vacations and days free are a thing of the past!

Let me know about the soup.
Best, K



---------- FOLLOW-UP ----------

QUESTION: I am selling the soups to a client who purchases my dessert.  She has tried my soups and would like to buy on a weekly basis.  I did not know I had to be licensed to sell to a restaurant.  I am trying to make money doing what I like to do "Cook" I have catered several parties and worked at hotels.  I am going to have to check into getting a license.

Answer
Re licensing - you can check with your locals to find out for sure - I am no expert in that area - that is for sure. Just be sure that you are covered against a law suit - no matter how careful you are....if a restaurant employee leaves something out and it spoils days after you delivered it - you, as well as the restaurant could be held liable should someone be poisoned - thru no fault of your own.  When I went into the catering business long ago, I went to see the owner of a hotel that I had worked for previously - who also owned numerous restaurants for some basic going into business advice...the very first thing he said to do was to incorporate - should something happened, the business is responsible, not you personally. 2nd thing was to get liability insurance..... Just remember, once that product leaves your hands...you are out of control how the employees at the establishment handle it!  

Re pricing of the soup....get your food cost and your labor cost (pretend that you are paying yourself for your time which includes, buying ingredients, preparation and delivery.) Then, figure your "other expenses" containers, gas to deliver and purchase your raw products, etc. Then, add a profit. You should check what specialty stores sell soup similar to yours for to get an idea what the market will bear....know going into discussion with your client what the least amount you can accept is...so you know what wiggle room you have...you sure do not want to agree to something that is going to net you very little profit.