First, understand that pricing out a kitchen is not a one-size-fits-all scenario. On the Use Kitch platform, you can (and should) be open to negotiation based on the needs of the individual operator who wishes to use your kitchen. Somebody who simply needs some extended grill prep space does not ask the same of your operating costs as somebody who stores food in storage space continuously, utilizes labor, or operates every available appliance causing wear and tear. The Use Kitch booking process encourages collaborative messaging back and forth to find the right price for a given booking.
That said, it can still be difficult to know where to begin when faced with these options on the List a Kitchen page:
Daily, Monthly, or Both?
The Use Kitch platform enables you to offer your kitchen on a day-to-day and/or monthly basis. Use the "Minimum" field to set the minimum number of days and/or months that the operator must commit to per the agreement term. For instance, if you are only interested in operators that will commit to a minimum three month agreement, enable monthly mode for a minimum of three months.
There will be many operators that only require kitchen usage for a few days per week. Enabling daily mode will allow operators to pay for the specific days they will be in the kitchen. By selecting a minimum number of days, you are establishing a minimum total dollar value you are willing to consider.
During the negotiation process, you have the ability to revise any set minimum requirements to facilitate getting a deal done.
Monthly Pricing Guidelines
A good target rate for monthly bookings is 4x - 7x estimated operating costs (i.e. utilities, garbage removal service, etc) during the potential total time being occupied by the kitchen guest. To minimize churn and set the operator up best for success, consider offering discounts during the initial months to give the kitchen guest time to ramp up their operation. It can be difficult for an aspiring entrepreneur just starting out to pay the full rate; consider asking for 2x - 3x for the first 2-3 months of operation.
Factors to consider that might move your multiplier up or down:
Amount of equipment to be used. Consider discounting your price for operators who only need to operate a small subset of the available equipment or storage space, while moving it up for operators who are going to take over every appliance.
Intensity of equipment usage. Some operators may put a strain on appliances that they use throughout their entire visit as opposed to intermittent usage. Motorized appliances especially wear out over time.
Volume of food production and waste. Operations which generate a large amount of waste lead to greater cleaning and sanitation costs.
Length of agreement. If you are mandating longer agreements, you may wish to lower your monthly obligation to reflect the longer commitment of guaranteed revenue.
Daily Pricing Guidelines
First, calculate a price by the formula above. A good target rate for daily bookings is 4x - 7x estimated total daily operating costs (i.e. utilities, garbage removal service, etc). Listed daily price rates are often 5-7% of the monthly total rate.
Sample Kitchen Sharing Agreement
Bob is sharing Bob's Barbeque Kitchen on the Use Kitch platform. Bob has $1,000 a month in operating costs to maintain the barbeque kitchen. Five times $1,000 is $5,000, so Bob sets a target for $5,000 as the monthly rental price. However, knowing entrepreneurs may not be able to afford $5,000 their first month in operation, Bob is mentally willing to go down to $3,000 for the first two months an operator is in business, to give them a chance to establish a clientele. Bob is not interested in doing the work for single-day rentals, but if a client wants multiple days, Bob would consider it; Bob sets the daily rental as requiring a minimum of 5 days at $300 per day- six percent of the full rate of $5,000.
If Bob finds an interested monthly operator, they can strike the following agreement:
First month of operation @ $3,000
Second month of operation @ $3,000
Third through sixth months of operation @ $5,000
This would result in $26,000 of revenue for Bob and $20,000 of profit.
Are you still unsure where to initially price your kitchen? Use the chat feature in the lower left of the site to strike up a conversation with a friendly Use Kitch associate; we're all experienced in the world of kitchen hosting and can help guide you to the answer!