3 Things You Can Do to Boost Profits in 2021

Many caterers are heading into 2021 wondering how they’ll make up for lost business due to the pandemic. There’s no denying that 2020 was a tough year for everyone. With live events canceled and many dining establishments shuttered (or severely limited), it will be critical for catering businesses to focus on increasing profits in the year ahead.

Here are three strategies that will help you to maximize your revenue and keep your finances in the black in 2021.

Cut down on food waste.

Food waste is one of the biggest budget suckers out there because you’re essentially tossing money in the garbage. You bought those ingredients, so you might as well make the most of them! (Not to mention, food waste contributes to the climate crisis when left to rot and produce methane in a landfill.) First and foremost, don’t purchase more than you need unless it’s an item with a long shelf-life like certain grains, spices, canned goods, and honey.

You can also get creative with preservation methods for perishable ingredients. For example, you can turn leftover berries from a holiday dessert into preserves or freeze those wilting herbs in some oil for later use. You may also make the most of food scraps by making pesto from carrot tops or sautéing those broccoli stems. Keep a close eye on what is going into the trash and always consider how you could give it a second chance.

Assess your current pricing structure.

Successful caterers charge for their value, but it’s not as simple as sticking a price tag on every package and calling it a day. You need to remain competitive in your market and you risk pricing yourself out if you increase your rates too much. On the other hand, charge too little and you won’t make the profit you deserve (if any).

To price accurately, you need to perform a bit of market research to get an estimate of what your competitors are charging as well as the state of the industry’s supply chains. If, for example, meat is in high-demand with little supply, you will need to price accordingly to cover those costs. Be diligent in evaluating your company’s place in the market and you’ll be in a greater position to pinpoint the best pricing structure to meet your clients’ needs.

Get comfortable negotiating prices.

Strong negotiation skills can be your best friend when it comes to increasing profit margins. Once you’ve done your market research, you’ll have a good idea of how much you should be paying for any given ingredient. As a rule of thumb, you should never be paying more for an item than you would get it in the grocery store.

When speaking to your food supplier, present the research you’ve gathered and explain why you expect a lower rate. Name a reasonable price that you’re comfortable with and see what they have to say. The best vendors will work with you to ensure that everybody’s needs are being met; if they aren’t willing to negotiate, it’s a good sign to start searching for a new food provider.

No matter how you’re starting out 2021, these strategies will help you to make the most of your budget and drive your business in the right direction.