So you know you love to cook and are going to start your own supper club. Perhaps your goal is to make your cooking hobby into a side hustle or maybe you are looking to one day open your own restaurant—either way you are excited to start this new endeavor and make some extra money. But how can you make sure that your supper club will make you money?
All profit for food businesses lies in the margins. The most important thing to make sure you are doing is counting every penny that you make and every penny that you spend. Meticulous record keeping is your secret weapon. Below are some tools to help you make, and not break, your event budget.
How to Fund Your Supper Club
Like with most businesses, the capital often comes from yourself and/or capital that you are able to raise from friends and family. A supper club is a much lower investment than a full service restaurant, so there is no need to get a traditional bank loan. The minimum that you need is enough capital to host your first supper club dinner. The revenue from your first dinner should break even and ideally make you a profit. This is the capital you use to host your future events. You should not go into any type of debt for this. If you do need to raise additional funding, you may want to consider asking for sponsorships from local businesses, especially grocery stores. You can sell ads for a small program book that is distributed at your dinners and offer sponsored blog posts on your website.
It all starts with your budget. Take a few minutes to create a simple budget with your expected revenue and expenses. List out every little thing you think you may spend money on or make money from. See example below
|Plates + Cutlery|
|Table + Chairs|
Food cost refers to the menu price of a certain dish in comparison to the cost of the food used to prepare that same dish. In other words, how much you pay for food will determine how much you need to charge for it. Learn more about food cost here.
For legal and simplicity reasons, I suggest you avoid getting into the business of selling liquor at your dinner. Include the price of beverages (alcoholic and non-alcoholic) in all ticket prices. You also do not have to serve alcohol and can tell guests the dinner is BYOB if you prefer. Regardless of whether you serve alcohol or not, you will need to offer some sort of non-alcoholic beverage alternative. This can be as simple as a few juices and seltzer waters, or as elaborate as full-on mocktails.
The menu should reflect the mood and theme you are organizing the dinner around. What kind of food do you enjoy cooking? Are there certain dishes that you are “known for”? Focusing on what you know and what you like is a good place to begin. Consider various food allergies and eating preferences, offer vegetarian and vegan options, have gluten free recipes ready in case one of your guests has an allergy.
Because you are not cooking dinner for a full-service restaurant, your food costs will be lower than those of traditional food businesses. That said, you still need to understand how much each item is. In order to determine how much each dish costs you need to tally the ingredients list, exactly how much of each ingredient you use to make the dish, and research how much each ingredient item costs. Make sure the dish you are accounting for is enough to serve the number of supper club guests you are hosting.
Along with the ingredient list, account for your own time preparing and cooking this dinner. This is a subjective price—it really comes down to determining how much you think your time is worth. Assign yourself an hourly fee (a fair price is anywhere between $25-50 an hour), apply it for each hour you work on the supper club (this includes food shopping, dinner prep, decorating, cooking, and any other time spent on this project). Keep a time card to help you keep track of your own hours.
Additional costs to add into the price of a dish include the cost of rent (even if it’s in your house, calculate a small portion of your rent into the budget), same goes for utilities, plates, cutlery, napkins, cooking equipment, decor, tables and chairs, marketing and advertising (if needed), etc.
Once you have all these costs together, add them up and divide them by the number of guests you plan on hosting. That number is your break even number and is the minimum price you should charge each guest for a ticket. Whatever extra amount you charge on top of that will be your profit.
My recommendation is to charge at least 20% more than your break even number. That profit can be saved and put towards whatever you want: your personal emergency (or shopping) fund, the down payment of a home or even the capital to open your own restaurant. It is important to note that you may need to play around with the ticketing price a bit. There is always the real price that things cost and the price that people will actually pay. What motivates people to pay for things is the perceived value of the purchase.
If you are a celebrity chef, people will pay a lot of money to attend a private dinner that you are cooking for. On the other hand, if you are just starting out people are not quite sure what they are getting by buying a ticket to your supper club. You can garner a lot of buzz by making sure your marketing of the event is strong and that your menu is unique (perhaps a cuisine that’s hard to find in your area or catering to a niche market, such as people who eat gluten-free and vegan). Highlight the event’s entertainment and other activities you have planned. Do some qualitative research by asking people in your networks what they would be willing to pay for an evening of good food and entertainment.
Once you determine a price, you can put your tickets up for sale. Test people’s price points by running a week-long sale to see if a lower price will motivate people to purchase the tickets. Be patient with this part. It takes time to get all of these factors to gel; as you build momentum you will sell more tickets faster and at a higher price point. You will get more comfortable in hosting supper club events. You will learn and you will grow, gradually becoming more confident in your skills.
Remember to have fun! It’s really easy to get stressed out about events like this. While it’s natural to be totally vulnerable and scared when starting your own thing, the pay off far surpasses any fear that you may have. The more you do this, the more confident you will become, and the more confident you become the more you will grow. Embrace the fear, fix you eyes on the goal, and keep it moving.