Do Caterers Charge Sales Tax, Illinois Tax Lawyers, Naperville IL
Small Business Spotlight – Catering
This is the Tax Law Office’s Spotlight on small businesses. We feature industries that touch the lives (and lifestyles) of our clients. This month’s feature is on Caterers, especially their pricing.
At the end, we feature a one-of-a-kind caterer that you will want to know!
What Do We Need from Catering Services?
Our needs from caterers are universal. Certain basic factors are similar to that required of most businesses: Reputation, Quality, Timeliness of Delivery, Customer Service. As with most services, all of those basics factor into the Pricing.
What Goes into the Price of Event Catering?
Catering companies juggle several significant financial hurdles, all of which impact their quality, profitability, and even survival. Many of these costs are understood by customers. However, some of these costs are rarely considered by customers.
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Fluctuating food costs. The prices of raw ingredients vary, due to product availability and demand. Quality comes at a cost.
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Labor costs. The catering industry relies heavily on skilled, reliable labor for food preparation, service, and logistics. This creates a substantial financial burden. Again, delivering better quality costs more.
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Inventory management. Catering businesses must carefully plan and purchase inventory, without overbuying. Otherwise waste directly affects profits. On the other hand, underestimating inventory can affect quality, delivery time, and damage the company’s reputation.
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Upfront costs of equipment and supplies. Catering requires access to commercial-grade kitchen appliances, serving ware, and transportation vehicles. These items are costly.
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Marketing and competition. Just like most businesses, Catering companies must invest in marketing efforts to attract and retain customers. To be competitive, some companies spend more than others.
Did you know? Caterers must charge sales tax for their products, in most states.
For caterers, if profitability is the brain of the business, then cash flow is the heart of these services. Unfortunately, some restaurants pay too much in sales taxes. But also, when cash flow is challenged, other companies might (inappropriately) utilize the sales tax collected to pay expenses. States tend to target businesses that collect sales taxes but fail to timely pay the taxes over to that state.
There is also a caution to services that frequently accept sales in cash. There are pitfalls related to those cash sales when frequent cash transactions are not documented and accounted for.
Ignoring the Costs, Why Do We All Love Catering?
Beautiful, delicious food is exciting. Most business owners agree that for their hosted company events, having beautiful, delicious and exciting food is necessary. But also challenging.
Catering services are loved for their convenience and the exceptional experience they offer. By handling all aspects of food prep, presentation, and service, catering services allow hosts to focus on their guests and the event. Customizable menu options and food creativity, plus seamless, timely service, can transform an otherwise ordinary event into a memorable occasion.
Small Businesses Spotlight: Introducing Tanya Coles’ Slice of Heaven
Wherever we travel for conferences and events, Tax Law Offices prefer to hire local companies. We share goodwill by utilizing family-owned businesses, whenever possible.
During 2022, we discovered this over-the-top catering service that ships fresh throughout the United States. The owner, Tanya Coles, is both a food enthusiast and a food artist.
This gem, @TanyasSliceOfHeaven is a top-notch caterer. This article’s words cannot do justice for the decadent creations this company offers. Instead, we just provided links to a tiny sample of Tanya Coles’ food mastery.
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Surf & Turf Stuffed Twice Baked Potato – Filet mignon, plus grilled lobster or other seafood, with a richly balanced sauce. All stuffed into an oversized baked potato. Why? Just watch the video. You will know why.
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Texas Toast Lasagna Sandwich. Really, whoever thought to take a melty, cheesy lasagna, grilled Texas Toast, and completely obliterate whatever used to be the grilled cheese sandwich? (Tanya Coles did that.)
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Strawberry Shortcake Cheesecake – For the sweet lover, Slice of Heaven has you covered. Take a look at Tanya Coles’ variation on the Strawberry Shortcake. Or is it the Strawberry Cheesecake? For the bravest DIY food artists among you, watch the “How to … Strawberry Shortcake Cheesecake” video.