Chartered Financial Analyst specializing in hospitality and event finance.
Determine how many guests (or events) your catering business must serve per month to cover all costs. Enter any three variables—Monthly Fixed Costs, Avg. Price per Guest, Avg. Variable Cost per Guest, or Breakeven Guests—to solve for the fourth.
Catering Breakeven Calculator
Catering Breakeven Formula
The breakeven formula for a catering business finds the number of units (Q, usually guests or events) it must serve for total revenue to equal all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Price per Guest (P):
P = (F / Q) + V
Solve for Avg. Variable Cost per Guest (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., commissary kitchen rent, insurance, marketing, van payments).
- Avg. Price per Guest (P): Your average revenue per guest served.
- Avg. Variable Cost per Guest (V): The direct costs per guest (e.g., food ingredients, disposable items, temporary event staff labor).
- Breakeven Guests (Q): The total number of guests you need to serve to reach $0 in monthly profit.
Related Calculators
- Restaurant Breakeven Calculator
- Event Breakeven Calculator
- Food Truck Breakeven Calculator
- Bakery Breakeven Calculator
What is a Catering Breakeven Point?
A **Catering Breakeven Point** is the number of units (typically guests or events) you must sell in a month to cover your total costs. This is the minimum sales volume you need to achieve to start being profitable.
**Fixed Costs (F)** are your monthly “overhead.” These are the expenses you pay regardless of how many events you book. This includes your commissary kitchen rent, business insurance, van payments, marketing subscriptions, and website hosting.
**Variable Costs (V)** are the costs tied *directly* to each guest or event. This is primarily your “Food Cost” (ingredients) and “Event Labor” (temporary servers or chefs hired just for the event). It also includes disposable items (plates, napkins) and rental fees (linens, tables) if you pass those on per-guest.
The **Contribution Margin** (P – V) is the profit from a single guest that goes toward paying off your large monthly fixed costs. This calculator finds how many guests you need to serve to cover your total overhead. Every guest served *after* this point generates your net profit.
How to Calculate Catering Breakeven (Example)
Let’s calculate the breakeven point for a catering business.
-
Identify Monthly Fixed Costs (F):
The caterer has $4,000 in monthly kitchen rent, insurance, and van payments.
-
Identify Avg. Price per Guest (P):
The average guest package is $50.00.
-
Identify Avg. Variable Cost (V):
The food and temp staff for an average guest cost $20.00.
-
Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per guest: $50.00 (P) – $20.00 (V) = $30.00.
Next, divide the fixed costs by this margin:
Q = $4,000 / $30.00 = 133.33 -
Conclusion:
The caterer must serve 134 guests (rounding up) each month to cover all costs and start making a profit.
Frequently Asked Questions (FAQ)
It’s often easier to use **Guests** because (P) and (V) are more consistent per-guest than per-event (a 20-person event is very different from a 200-person event). If you use events, (P) and (V) must be the *average* for all your events.
Yes. You should pay yourself a regular salary. This salary should be included in your **Fixed Costs (F)**. The breakeven point will then tell you how many guests you need to serve just to cover all costs *including* your own pay.
If they are temporary staff hired *only* for an event, their wages are a **Variable Cost (V)**. If they are full-time, salaried employees (like a head chef or manager), their salary is a **Fixed Cost (F)**.
Enter your (F) (e.g., $4,000), (V) (e.g., $20), and your target number of guests (Q) (e.g., 200). Solve for (P): `P = ($4,000 / 200) + $20 = $20 + $20 = $40`. This means you must charge at least $40 per guest just to break even for the month. To make a profit, you must charge more.