Running an event catering business is a delicate balance of logistics, quality, and profitability. One bad event can damage a reputation, while a series of successful ones can turn into long-term contracts and word-of-mouth referrals. The key to growth? Data-driven decisions.

Tracking the right Key Performance Indicators (KPIs) ensures that a catering business isn’t just staying busy but is actually growing efficiently and profitably. While revenue is an obvious metric, it only scratches the surface. The real game-changers lie in operational efficiency, customer satisfaction, and cost control.

Revenue Per Event – Are You Pricing Correctly?

Not all events are equal. Some are high-ticket corporate functions, while others might be budget-friendly weddings or private gatherings. Understanding revenue per event helps in pricing strategies and profitability analysis.

• Revenue Per Event = Total Revenue / Number of Events
  If this number is declining despite a steady event count, it could indicate pricing inefficiencies, increased discounting, or rising costs that aren’t being passed on to clients.
• Average Order Value (AOV) = Total Revenue / Total Orders
  A high AOV means clients are opting for premium packages or add-ons, while a low AOV suggests a need to upsell additional services like bar packages, upgraded menus, or décor.

Food Cost Percentage – Keeping Margins Healthy

Food costs are one of the biggest expenses in catering. Controlling this number is the difference between strong profitability and constantly struggling to maintain margins.

• Food Cost Percentage = (Total Food Cost / Total Revenue) x 100
  A healthy catering business keeps this percentage between 25-35%, depending on the type of cuisine and service model. If food costs are creeping higher, it might be time to renegotiate supplier contracts or refine menu selections.

Labor Cost Percentage – Are You Overstaffing?

Catering is labour-intensive. From chefs to servers, staff costs can make or break profitability. But overstaffing cuts into margins just as much as understaffing leads to poor service.

• Labor Cost Percentage = (Total Labor Cost / Total Revenue) x 100
  The sweet spot varies but typically stays below 30%. If labor costs exceed that, it could indicate inefficiencies in scheduling, over-reliance on temp staff, or the need for better workflow management.

On-Time Event Execution – The Reliability Metric

Few things can damage a catering business’s reputation faster than late deliveries or service delays. Tracking event execution times ensures the team is hitting deadlines without unnecessary stress.

• On-Time Event Rate = (Number of On-Time Events / Total Events) x 100
  If this number is below 90%, bottlenecks in preparation, transportation, or service execution need to be identified. Late events lead to unhappy clients, which ultimately affects repeat business and referrals.

Customer Satisfaction Score – Are Clients Happy?

Word-of-mouth is a major driver for catering businesses. A single bad experience can spread quickly, while consistent quality leads to glowing recommendations and repeat bookings.

• Customer Satisfaction Score (CSAT) = (Total Positive Responses / Total Responses) x 100
  Gathering post-event feedback through quick surveys helps track overall performance. If CSAT dips below 80%, something in the service experience needs improvement.

Repeat Business Rate – Turning One-Time Clients into Long-Term Revenue

Corporate clients, wedding planners, and event organizers can become consistent sources of revenue if serviced well. Tracking how many return for multiple bookings helps measure loyalty.

• Repeat Business Rate = (Returning Clients / Total Clients) x 100
  A strong repeat business rate signals trust and quality. If it’s low, it might indicate issues with service experience, pricing, or follow-up strategies.

Food Waste Ratio – Controlling Inventory & Cost

Food waste is an often-overlooked but critical KPI. Over-ordering ingredients leads to spoilage, while poor portion control results in excessive leftovers.

• Food Waste Ratio = (Total Food Wasted / Total Food Purchased) x 100
  Keeping this number below 5-10% ensures efficient cost management. If waste is high, reviewing menu planning, portion control, and inventory tracking is essential.

Event Profitability – The Bottom Line KPI

A full calendar of bookings doesn’t mean a business is profitable. Some events may bring in impressive revenue but leave slim margins once costs are factored in.

• Event Profitability = (Total Revenue – Total Costs) / Number of Events
  If profitability per event is shrinking, it may be time to adjust pricing, streamline operations, or re-evaluate cost structures.

Instead of guessing what’s working, owners can make calculated adjustments to pricing, staffing, and operations to ensure long-term success.

For those who need a simple, structured way to track and analyze these KPIs, KPI Tracker offers an easy-to-use platform designed to help businesses focus on performance without drowning in spreadsheets. Running a catering company is complex – tracking performance shouldn’t be.