This is What Happens When You Centralize Your Catering Costs
By Leor Bareli, Ubeya
You’ve just closed an event. A fantastic event.
The execution went smoothly, the presentation flawless, the venue left spotless and your staff have headed home.
Now what’s left if for you is to calculate, review and organize how much you’ve spent and how much you’ve earned.
This may sound like a quick mathematical equation. But anyone in the events industry who has done these calculations before will agree on this fact:
Catering costs can get quite complicated, if not downright overwhelming.
Catering companies are spending way too much time and money on trying to control the way they spend their time and money. Sounds ironic, doesn’t it?
Let’s centralize it
What does centralizing your catering costs actually mean?
Centralizing your costs is just a fancy term for keeping track of all your financial activity from all of your events in one place.
All your profits, costs and expenses are concentrated into a centralized location or catering software program like Total Party Planner.
Why is it so important for your catering business to centralize costs?
The data collected from Ubeya’s platform over the past two years shows how an effective cost centralization and breakdown helps catering businesses significantly increase their profits.
Companies that explored the costs and margins of their events were able to save up to 45% on operational expenses, according to Ubeya’s statistics. These businesses also saw an increase of an average of 10% higher profitability and 17% improved productivity.
When you centralize your catering costs, you essentially gain the ability to review your business from the vantage point of the big picture while having the advantage of full control over the smaller pieces of the puzzle.
Let’s break it down
Centralizing costs is one of the biggest enhancements catering companies can make today, rather than lumping all costs together into one, enormous category marked, “Expenses”.
This is basically the equivalent of under the ingredients of a recipe, writing “Cake.”
The breakdown of your catering costs is actually your recipe for success.
In order to keep margins high, these are the three most important analyses for a company to implement through centralization, based on the combined data from the integration of Total Party Planner with Ubeya:
- Over a period of time: This lets you take a look at the big picture. You can review the extent of your costs and revenue on a weekly, monthly or quarterly basis, or really whenever works best for your company.
- Per each event: Each of your events is different. Each event requires different preparation, different resources and at the end of the day, each one yields a different profit margin. Let’s take a look at what those differences are.
- Each cost as a separate entity: The expense of your event is actually a composite of all the costs of all the factors of your event. How much are your supplies costing you? How much are you spending on labor costs? Ubeya’s data shows that up to 75% of all catering costs are actually being spent on improper labor management!
The 5 central benefits to centralizing costs
1. You improve the quality of work by making financial operations simpler.
Efficient operations, cutting costs, saving money. These goals are generally at the top for any business, no matter the industry, but it is clearly easier said than done.
Believe it or not, some catering companies have still not transitioned from handwritten cash receipts and Excel files to a streamlined catering solution, like Total Party Planner.
Once you centralize your operations into a single database, you can easily handle time consuming processes and minimize costs while maximizing profit.
You have faster processing and analysis times, better control over how much your company is spending, and you reduce the amount of time and energy spent on manually managing your information.
2. You reduce overhead and labor costs.
It’s nearly impossible to run a business without at least some overhead. However these operating costs can be minimized or even eliminated with an integrated solution that centralizes catering operations, finances and labor – leaving you with a greater profit and higher success rate.
Ubeya reports a reduction of up to 80% of labor costs by companies who centralize their catering costs – a massive game changer considering the labor cost is among the highest costs in catering and events.
But you wouldn’t know that if you hadn’t properly analyzed the cost of each of your expenses, would you?
3. You no longer duplicate tasks.
That’s the beauty of automated processes. They save you the much needed time that your manpower has been spent on.
If your catering company is operating across multiple locations, multiple clients or managing many employees, you are probably sending multiple, separate payments to vendors, suppliers, service providers and paying multiple different wages.
The time it takes to review and calculate your finances, and then calculate it again to make sure there are no mistakes, and then once again because there was a mistake, or a change, or an update – is time that you can drastically save.
When you are more productive around elements that increase your bottom line, like obtaining new clients, your business is more successful. Decreasing focus on administrative tasks helps you take care of your ever-growing client base.
4. You maintain a clear focus on your entire business.
Maybe you need to be cutting back on exorbitant rental expenses. Or maybe you realize that you aren’t charging enough to cover the salaries of your temporary event staff.
The collaboration between your sales, catering and labor operations under your centralized catering solution helps you implement visions and strategies based on real time factors.
Now you can spot trends and make forecasts of expenses. You can accurately use these analyses to make maneuvers for better future business decisions and cut back on inconsistencies.
5. You generate a higher ROI.
Catering companies are investing in integrating a centralized solution for their operations based on the results in the market.
Companies report a much higher revenue than companies who are not using an effective management and centralization solution.
It’s easy to control how much you spend, what you spend on and how much you earn when the ingredients of your recipe are organized in one location, written out clearly, and detailed to the final pinch of salt.
The article was written by Leor Bareli, marketing manager at Ubeya, an end-to-end platform for employee management, hiring, scheduling, timesheet, payroll and everything in between.