i usedto cost out menu's and buffet's.you would not believe what mark up is needed to make a profit.. this is over 10 years ago but one of my wedding menu's was costed out at $9.25 , thats no labour or other expenses added..we sold that menu for $65 a head
aktow,
Feb 26, 1:50pm
i usedto cost out menu's and buffet's.you would not believe what mark up is needed to make a profit. this is over 10 years ago but one of my wedding menu's was costed out at $9.25 , thats no labour or other expenses added.we sold that menu for $65 a head
jack,
Feb 26, 11:31pm
Pickles7: Yeah, you're right. I costed the item for table service. I guess the idea of buffet for 25 just didn't register as a viable option.
Aktow: The wedding menu you mention ran at 14.2. Eggs and bacon and bread and coffee I mentioned runs at 15.
hestia,
Feb 27, 12:04am
Based on the market price, what others are charging for it.
nzl99,
Feb 27, 12:10am
MMMm I have a hankering for bacon, poached eggs and vogels toast now.
nzl99,
Feb 27, 12:10am
MMMm I have a hankering for bacon, poached eggs and vogels toast now...
fisher,
Feb 27, 3:21am
hestia. your argument just doesn't hold up. plain and simple. So you would go around seeing what others are charging and base your charge out price on that. That would be fine if there was a given constant but your source costs and outgoings would be different to theirs hence the markups and profit margins would also be different. Staff wages differ , as do rents, as do non profit items needed to run the business. Your statement : "Price is not determined by costs. Price is determined by supply and demand" is absolute rubbish and spoken by someone who has never been in the business or is an accountant.
fisher,
Feb 27, 3:21am
hestia... your argument just doesn't hold up... plain and simple... So you would go around seeing what others are charging and base your charge out price on that... That would be fine if there was a given constant but your source costs and outgoings would be different to theirs hence the markups and profit margins would also be different... Staff wages differ , as do rents, as do non profit items needed to run the business... Your statement : "Price is not determined by costs. Price is determined by supply and demand" is absolute rubbish and spoken by someone who has never been in the business or is an accountant....
muzza3,
Feb 27, 3:28am
Many Cafes here in Tauranga esp Cameron Rd B=E + toast + tomato $7.50 .Seems about right to me under $10.
pickles7,
Feb 27, 4:12am
Yep,but it won't be you, doing the cooking. It has nothing to do with supply and demand. nothing to do with what others charge.
pickles7,
Feb 27, 4:12am
Yep,but it won't be you, doing the cooking..
hestia,
Feb 27, 4:53am
Ok then, I defer to a more knowledgeable person. I take back what I have said. My humble apologies for making such a stupid statement.
knowsley,
Feb 27, 6:05am
I don't think you're wrong, Hestia, and certainly don;t think it a stupid statement. When we had a cafe, usually the pricing was worked out on 1/3 ingredients, 1/3 overheads, 1/3 profit. However, obviously if you were charging $20 for something everyone else was only charging $15 for, you wouldn't last long. People aren't going to say, "Well, I guess they are charging more as they have higher overheads, so I'll happily pay the extra".
knowsley,
Feb 27, 6:05am
I don't think you're wrong, Hestia, and certainly don;t think it a stupid statement. When we had a cafe, usually the pricing was worked out on 1/3 ingredients, 1/3 overheads, 1/3 profit. However, obviously if you were charging $20 for something everyone else was only charging $15 for, you wouldn't last long. People aren't going to say, "Well, I guess they are charging more as they have higher overheads, so I'll happily pay the extra"...
fisher,
Feb 27, 8:59am
Knowsley. she is completely wrong and you contradict yourself. You have just stated yourself, you based the prices onYOUR costings being ingredients, overheads and profit. These costs are relative to achieve the outcome of YOUR prices for YOUR business and are not dictated by what others are charging to achieve YOUR end result price.I could guarantee their overheads would be different to yours with even just taking the rent into consideration.A higher rent would impart a higher percentage added to the costings and selling prices.
fisher,
Feb 27, 8:59am
Knowsley... she is completely wrong and you contradict yourself... You have just stated yourself, you based the prices onYOUR costings being ingredients, overheads and profit.. These costs are relative to achieve the outcome of YOUR prices for YOUR business and are not dictated by what others are charging to achieve YOUR end result price...I could guarantee their overheads would be different to yours with even just taking the rent into consideration..A higher rent would impart a higher percentage added to the costings and selling prices..
pecka,
Feb 28, 8:32pm
Around here the base price for toast and eggs (any way) is around $12 to $15. A full breakfast, hash brown, tomatoes, a sausage, eggs (any way) and bacon is between $18 to $20. And just for the record, I couldn't give a flying fart whether the chicken ever touched grass, or the pig had a happy life before it ended up on my plate. JMTCW.
knowsley,
Mar 1, 5:35am
I don't think I contradicted myself at all - if my end price4 comes out to be higher than everyone else's for the same thing, I need to drop my end price, irrespective of what my costs are. the 1/3, 1/3, 1/3 was the ideal, but if I was more expensive, I'd adjust. To blindly charge solely based on costs will see you out of business if you are not competitive.
uli,
Mar 1, 8:22am
No - you cannot just compare the end price - that is ridiculous. Otherwise - following your logic - the Hilton would have to charge the same as the backpackers. If you eat bacon and eggs at a winery on Waiheke you will pay more than if you eat it in a little cafe in South Auckland.
holly-rocks,
Mar 1, 10:36am
^The last bacon and eggs i had at a restaurant was from Riverstone near Oamaru ( restaurant of the year ) it was $14.50 from memory. Free range eggs andHavoc pork bacon with truffle oil.
duckmoon,
Mar 1, 10:45am
that is the norm for the hospitality industry... the cost of the dish, also needs staff, power, premises...
knowsley,
Mar 1, 10:59am
Once again taken to the extreme... Ok then, how long do you think a place in South Auckland would last if it charged Hilton prices for its food, compared to the place 2 doors down? You compare with your competitors, not the whole of the marketplace.
fisher,
Mar 1, 11:41am
hestia wrote: Price is not determined by costs. Price is determined by supply and demand.
This is the statement I am disagreeing with...
It should have read.. Price is determined by costs but sometimes needs to be changed because of supply and demand.. This is in essence what you are saying knowsley in post #72 ... I'm sure new cafe owners dont go around to the opposition in the area and see on the sign board.. Bacon and eggs with toast 14.00 .. so think... ok's we'll charge 12.00 without knowing what "ALL" the relative costs go into achieving their overall costs to make a profit for the dish.. ..Quite simply their purchasing power may not be anywhere near as good as the oppositions and their overheads also... Once they have INITIALLY costed out the dish, only then will they be able to determine if they can be competitive...
pecka,
Mar 1, 8:32pm
Around here the base price for toast and eggs (any way) is around $12 to $15. A full breakfast, hash brown, tomatoes, a sausage, eggs (any way) and bacon is between $18 to $20. And just for the record, I couldn't give a flying fart whether the chicken ever touched grass, or the pig had a happy life before it ended up on my plate. JMTCW.
uli,
Mar 2, 2:20am
Your cafe in South Auckland can still ask more than its competitors if it has "other values" to add to the plain bacon and eggs.
For example: Lots of people prefer to sit outside in summer. I personally prefer to sit outside at the back of the premises in a green environment and not on the front a meter off the traffic on the footpath. That would be worth 2 to 5 dollars extra to me.
If indoors then the "ambiente" is worth at least $5 in difference if you have a nice friendly clean atmosphere rather than shabby third hand wobbly chairs and sticky tables - in fact I have walked out of several South Auckland eateries because of the latter.
To compete on price is the single most shortsighted and nonsensical thing you can do in business. Believe me - I have had lots of experience with that. Undercutting your competition is not getting you anywhere. Adding value is!
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