This one is from Pete and it concerns pricing out your services for private parties.
In his email to me he describes a unique tiered pricing structure which he uses for “all you can eat” gigs.
Pete writes…
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Hi Steve,
Couple thoughts on pricing. It is a tough call doing the “Per Person” pricing. When it is an “all you can eat” gig and the local university football team are part of the party you can get cleaned out fast! (This happened when we did a rehearsal dinner) I’ve found that giving a discount over my retail price is a more fair pricing strategy. I normally give a 10% discount for small parties (up to 50) 15% (50 to about 100) and 20% for anything over 100/150 people. I also give a bigger % discount for returning customers that hire me year after year.
-Pete
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Discounts can be an effective sales technique but we need to be sure we are still profitable once the discount is applied. Your stepped percentage volume price break is an interesting concept which I haven’t seen before. I imagine it would help cover your behind when doing all you can eat gigs which are inherently risky propositions. For those of us with less risk tolerance, let me suggest an alternative…
One of the most fair pricing strategies is the “ticket” method. Go to Walmart and buy a roll of movie tickets in the office supplies section.
If the host is expecting 100 people, sell them 100 tickets in advance at your per meal price. A meal could be one dog, a bag of chips, and a drink – whatever you decide on.
This guarantees you a minimum number of sales which protects you in case half the guests are no shows.
When the guests arrive, the host gives each one a ticket which the guest then redeems at your cart for one meal. If the guest wants more food they can pay for it themselves or the host might agree to purchase additional tickets for this purpose.
There are several variations on the ticket pricing strategy but two things they all have in common is that you get paid first and you lock in a minimum before the event even starts. It feel pretty good to know there is no downside when you are heading out to do a gig.
What say you slingers? I’d like to get more ideas from you! Please share them in the comments.
-Steve
Run-a- tab is another way to have an all-you-can-eat event that keeps you profitable.
Have the host pay a minimum amount up front and settle up after the event for the extra meals. Meal tickets can still be used so cash handling is eliminated and the guests dont feel like they have to slow down.
Otherwise I like the tiered pricing.
Run-a-tab. I like it Glenn.
Steve
I think both ideas work if you put them together. Use your idea of the tickets being a meal. That covers the dog dude financially for the party. But then giving a discount always adds value in the customer’s eyes. So do The Tickets and then if a party person wants more there could be a discount price at that point of purchase. Chances are they would only be gettin another dog and a maybe a drink but forgoing the chips. That way you are killin 2 birds with one stone. You get yours and the customer gets a discount for their party people.
Brianbubba
A hybrid system… interesting Brian. Thanks!
hey steve,
jimmy rodgers here in memphis, tenn. my wife sheila and i just put our cart together and we have only done one event. at that event we had 2 people ask if we could do private parties. out of shear terror i balked and told them we were booked up. i did not know how to price it. thankss to you and pete i will now start those and quit leaving money on the table.
thanks!
Don’t worry Jimmy, we were all nervous when we opened our umbrellas for the first time. That’s normal.
Now that you have a couple of pricing strategies you can move forward with a new profit center – private gigs.
Sell ’em all my friend!
Now Jimmy thats was funny lololololo
Aye matey.
That’s a great idea ! I’ll be a passin it on to Captain Butch don’t you know!!
We did a catering gig this summer @ a flat rate. It rained some early during the event & about half the expected crowd showed up. Even still we were very busy with about 150 people & Captain Butch was dancin to the music.. Arrrggggg !!
1St Mate Jim.
Slingin’. And dancin’. Together. Can’t nuthin’ good be comin’ of those shenanigans, swabby. Best reef yer mains’l, trim yer jib and MIND YER HEADING SIR!
ARRRRRRRGGGGGGGGGG! Matey, you been slingin’ in the rain????
Aye, me buns be soggy…
Me thinks ye both been gitin into the grog !! Arrrgggg !!
Of all the ideas I’ve heard, I like the tickets best! Thanks again, Steve! I don’t know if my situation will ever call for it, but it’s a good one for me! Easy and effective.
Easy and effective is good 😉
I pretty much do the same thing, except I require a minimum of 50 (people or meals) plus a $100.00 setup charge. This has not been a barrier except for a couple of times that I’m not so sure any price would have gotten me the gig. People or organizations are willing to pay for the uniqueness.
The only variation has been shop picnics where a given number of hot dogs or meals were paid for and they were responsible for controlling who got what.
The set up charge is a great idea. It covers your non COGS expenses and makes sense to the customer. Great tip Jack!
For private parties, I have a contract with a guaranteed number of guests, their choice of menu option (I gave 3 options ranging from $2.50 per head to $5 per head, plus add-ons such as chips, lemonade, etc). I then also charge a rental fee of $50 per hour.
Private parties are our bread and butter!
Nice. Daily street vending is certainly not the only way to run a hot dog cart business. It can be a great way to go in areas with strict street vending ordinances.
We do hundreds of private events, and we work with each person/event individually to find out what will suit their needs best! We always have a minimum, but we usually create custom tickets (i.e. for a birthday party, we put the birthday girl on the ticket with a Happy Birthday message and our logo), and people talk about how cute the tickets are all night as it really personalizes the event. Each event and situation is going to be different, so to the extent that you can be flexible really helps! We’ve done events where we keep track on a spreadsheet and bill at the end of the night (sometimes they ask for us not to go over a certain amount, etc.), tickets, a mixture of tickets and cash sales, you name it, we’ve done it! The people planning the parties and events love that we are flexible in doing whatever works best for their situation or party!
Flexibility is always good. Congratulations on your success and thanks for sharing your ideas here on Hot Dog Profits.
Fantastic information! I’ve been asked quite a bit about catering private events and I’ve been a little hesitant to book them because I wasn’t completely sure how to price them. I really like the ticket idea with the possibility of giving a discount if the event is large enough. This is the strategy I’ll be Implementing.
Steve, could you tell us how to market our cart services for special events. I’d like to work more of these types of events.
Thanks!
Derek
http://www.HawaiianHotDogCo.com
Hey Derek,
The best way to market your cart services for special events is through your website.
You need a page that tells folks you are available to do private parties, catering, store grand openings, liquidation sales, political meet and greets, auto dealer hot dog giveaways, etc.
For those who don’t have a website, we can build you one for free (we now have a sponsor so we don’t have to charge you anything).
Your site will come pre-built with a page like I described above so you can market yourself for special events and private gigs.
These are not run of the mill websites. For one thing, they have subscription capability. Your customers can subscribe to your website with their email and be notified where your food cart will be, what your specials are, what contests you are running – anytime you choose.
We also put together a video marketing course that shows you how to use your website to increase your business. You get that with your website.
This free offer is good for everyone reading this. If you want us to build you one click here.
P.S. There is a video on that page that gives you a tour of the site we’ll build for you and explains everything that it can do. Watch the part about email subscriptions even if you already have your own site. You’ll learn how to really increase your food sales.
I like to make things simple. I charge a flat $50 set-up fee, plus $50 per hour, plus the actual cost of food consumed with a minimum of three hours. The left overs can be given to the host at the end of the gig. This sits well with the host and makes clean-up easier. This works for me because I always have ten times the amount of food in stock than the event will consume, and it doesn’t matter how large or small the crowd is, I still have a nice affair.
I like it, especially the part about leftovers being given to the host. They’re already paid for so why not reduce your clean up efforts. Very slick!
Hey there Steve; I did two gigs this year. The first one was for a Storage Auction. It was an all day auction, and there is was no food places other than a mini-mart gas station anywhere. 350 people all day, thirsty and hungry. I sold food till it was all gone. Trying to figure out how much to have on hand was the trick. But it worked out just fine. If I could have two or three of those a month, I would quit my day job.
The second was a fall harvest festival. $2.50 got you a hot dog, capri sun, and a bag of chips. They went to a booth, payed their money, got their drink and chips. They would get their hot dog when they showed me their drink, and chips. No money handled or tickets, just the fun of serving.
Interesting way to deliver the good Paul. Congrats on your auction success!
Fear of pricing an event has kept us away from them for a time as well, but we ventured into one this summer. It was a customer appreciation event with an expectation of 500 to 1000 people. I don’t think your cusotmers always appreciate what it takes to be prepared to handle that spread of people. The way we priced it was to charge them upfront for the first 500 as a flat non-refundable price, which basically covered our costs for preparing for 1000. Then we bagged the hotdogs, the first 500 in one cooler and the second 500 in bundles of 25 in another. We kept count of how many bags we sold after the first 500. When the sponsor of the event said to turn off the dogs, we finished our bag of 25 and shut er down.
We finished at 750 dogs, our costs were covered and our unused inventory was still frozen and good to go for the next days business.
Way to go Meg and Dave!
i always quote a price of 40 an hour , 3 hour minimum, plus 50 set up fee, and cost of goods +5% (being as i have to use my resources to go get the goods and actually cook them). some people dont want to do it, but i wont budge on it, if i cant make 120 profit at an event then its not worth going to (at a minumum). you have to be able to make an amount of profit that you would selling for a certain time. otherwise i could be setting up somewhere and charging regular price. I understand people do not want to buy 500 hot dogs at 3 dollars each, but they must know that i wont cook them deliver them and serve them to whomever they want for pennies, when i could be charging 3.00 each somewhere else. the juice has to be worth the squeeze.
“The juice has to be worth the squeeze.” Quote of the day Beau!
Hi Pete, We like your post great one, keep up the good work.!!!!
I handle mine like a regular catering event. I do 1-2 private parties a month. I have the client sign a contract for a minimum number of guest. That way I am garuanteed my money. I charge on a per meal / per person basis. I charge travel time, service charge, etc, just like any other local caterer. I have never had a problem with customers signing contracts.
Very cool Brian!
If the host is paying and its “all you can eat”, I just charge my regular prices and give them a bill at the end of the day.
How do you keep track of how much you sell?
49-Sausage Dog Combos Meal ( 1 Sausage Dog, Chips, Drink) $294.00
29-All Beef Hot Dog Combos Meal(2 All Beef Hot Dog, Chips, Drink) $174.00
1 – 7% Georgia State Sales Tax (Richmond County) $32.76
1 – Setup Fee $25.00 (NON TAXABLE) $25.00
TOTAL $525.76
As you can see this is my pricing and yes it does change but normally it is $6 per meal, plus state sales tax, plus setup fee, total time at this party was 4 hours including setup and clean up, travel time 2 hours round trip. Normally if the customer is a repeat customer then the per meal price goes down to $5.00 per meal. It should also be noted that I accept “Square” because most large businesses perfer to pay by credit card. It should also be noted that I get a 3% discount from the state for paying my Sales Tax timely and Square charges 2.75% per transaction win, win… I normally will not do any party less that 25 people and that is normally local. I have never tried the ticket idea but I think it would be a great idea. I normally talk to the customer and ask what their limits are and stop or go at their request. Planning is the key, plan your events so that you can use any left over buns for the next event, always check the dates of your stock, ie chips, drinks, etc, etc. I do an inventory prior to the event and an inventory at the end and bingo, here is your bill. I never ask for a deposit and have never (yet) been burned. Give the customer a professional bill, this will get you repeat business. One last note: Large businesses normally take up to 90 days or longer to pay by check and today by credit card.
Duggs Doggs
Good!! Good!!
PS Get your Christmas Card addresses ready today, this will get you a lot of repeat business at a very low cost and increase the value of your business in the future.
A gold mine of slinger tips. Thanks Michael!
I count the empty packages.
That works!
I’m new hotdog vendor and I’ve been asked to do a small car show, the people putting on the car show are gonna try to get me sponsored so that my time and food is paid for by a sponsor. My problem is I don’t know what to charge the sponsor for my time. Please help. Sonny
Hi Sonny, your time should be valued at $50 per hour minimum. That’s with someone else paying your food costs. You’re a professional! Go get ’em.
-Steve