How much do I tender for an event? This is probably one of the most common questions we get asked and probably one of the most difficult, for there are many questions that you need to ask yourself before you even decide to try to ‘pitch for a job’. Remember rents for pitches can cost anything from a few pounds to thousands.Our initial advice is always ‘cut your teeth’ on a few small jobs first, don’t even think of tackling a big job until you're sure you can handle it and be honest with yourself, more newcomers lose money on big shows than make it – we hear all the tears on the phone afterwards, ‘I threw hundreds of pounds of stock away’, ‘I didn’t even cover my rent’, ‘there weren’t enough people’, ‘there were too many caterers’.The first thing to remember is that event organisers and catering concessionaires (people who take the catering rights for an event and then sub let the ones they don’t want are in it for one thing only just like you – to make money and a few (not the majority thank goodness) have loose morals about doing it.
So lets put a few rules down for you:
NEVER - NEVER agree, sign a contract or pay a deposit for a pitch unless you know how many people they are expecting and how many and what type of caterers they are intending to have on the event.
Never agree over the phone or on a hand shake GET IT IN WRITING otherwise you haven’t a leg to stand on.
If it feels dodgy, it usually is, so forget the greed or the desperation and WALK AWAY.
Ask around other caterers and research the show BEFORE PARTING WITH ANY MONEY – if in doubt call NCASS or look in the members area of the website we may have heard a whisper or there may be a comment posted.
Always negotiate, and don’t sound desperate, better to pay a percentage of the take than a flat fee and some organisers will now work on this basis.Please don’t try to cheat them, they will keep an eye out and have been around long enough to tell you how much you have taken, even before you have emptied the till. It just messes it up for everyone and news travels fast, remember its you that’s trying to build up your business.
Always ask to see a ground plan and get them to commit in writing which pitch you are applying or paying for. Most good organisers will have all this figured out, if they haven’t maybe you should have a good think about it.
NEVER EVER pay more than 20% deposit unless you are within a couple of weeks of the date, it wouldn’t be the first time a bogus organiser cooked up an event, got thousands in deposits and then disappeared. Think through these bullet points before committing to anything:
1) Have I got the experience to make the money I would need to cover the rent, my stock and wages?
2) Do I know how much money I need to take to break even?
3) Is my unit big enough to serve at least 200 portions an hour?
4) Will I need to find lodgings for myself and the staff and at what cost?
5)Can I carry enough stock to get me through the event and take the money I need to?
6) Can I get the staff?
So now we can go on to look at the mechanics
But first you need to understand the cost base of your business, this is where most get off on the wrong foot. You should be working on a cost base of something like this:
Cost of sales including:
Loans and interest
Disposables 30 – 33 % of your income
Staff wages tax and NI
Accountants / legal fees
Tel and gas etc 15 - 20% of your income
Rents 15 – 25% of your income
Net Profit 40 - 35% of your income
If your not making at least 30% net profit you need to talk to your accountant
OK so you think you know what you are doing, now we will try to explain some of the science behind pitching for a site for those who haven't done it before.
My suggested method for working out a tendering bid
How many attending the show? 10,000
(I always half what ever an organiser tells me unless the figures have been independently audited) so in this case I would say 5000. This is not to say they are dishonest, but it rains a lot in the UK and there are another hundred reasons why people don't turn up on the day.
Then depending on the type of the show, you can apply a factor as to how many of those will spend.
A reasonable guideline is:
Pop concert 75% - 85%
Agricultural all day show 50%
Fireworks and music 25 – 30%
Bonfire night 35 - 40%
Local fetes and carnivals 35 -45%
So applying an average to the above attendance 5,000 x 40%= 3000 sales. Average spend per head: This really depends on the event and its location but a good place to start is around £2.50. Therefore all the units will take between them £7500
Burger, hot dog and chip units
These always take the lions share (around 60%), But also pay the most rent £7500 x 60% = £4500
How may burger hot dog and chip units? Say 3. Then the take for each burger hot dog and chip unit - £4500 / 3 = £1500
RENT SHOULD BE BETWEEN 15 & 20% = £1500 x 15% £225 - £300
On average specials will take between 25 and 40% of the total, for this purpose we will say 40%, £7500 x 40% = £3000
How many specialist units Say 3 Then the take for each specialist unit will be £3000 / 3 = £1000
RENT SHOULD BE BETWEEN 15 & 20% = £150 - £200
Organisers will usually ask for 20-25% deposit of the site rent at the time of booking and the balance to be paid 4 – 6 weeks before the event.
If you agree to a pay on ‘percentage basis’ the organiser will ask you for 20 – 25% of your takings, anything more WALK AWAY.(Remember, he is taking you on trust, so tempting though it might be, please don’t lie, it ruins it for everyone particularly you).
One of the biggest complaints from caterers is that the show was flooded with caterers, and there is very little comeback, especially if there is nothing in writing. So GET A CONTRACT IN WRITING stating the amount of persons expected to attend the event, where you are going to be placed, the price you have to pay, the level of deposit you have to pay and by when and most importantly
HOW MANY OTHER CATERERS ARE THERE GOING TO BE AND WHAT ARE THEY SELLING - REMEMBER BUYER BEWARE—
They need you as much as you need them – they just don't want you to think that. If any of you experienced event caterers out there have a better method we would love to know so please write and tell us.These are just general guidelines and you always need to exercise caution when entering into any agreement where you are expected to part with money so play it safe. NCASS cannot except liability for any loss in any form by using the information in these guidelines.