I suggest you take it a step further and consider offering a more rounded service and do the printing as well. If you suggest the catalog be in the form of a newspaper, you can use the really good pricing at http://www.makemynewspaper.com and then simply up the pricing they offer to make your profit (include pricing for your work).
I use this outfit to print a newspaper for my local community and simply sell ads in it to make a profit. For this lady however, you can design and print a newspaper that has a lot more room for a lot less money than she can do it printing a catalog or newsletter. You can save her a lot of money and make much more yourself. If she is looking to direct mail her catalog, you can offer this service through this same company.
www.makemynewspaper.com will be happy to send you some sample newspapers to give you ideas on how other people have done exactly what you are trying to do--just with a newspaper instead.
I would suggest, however, since this is your first project that you offer to make any changes the customer requires and keep her very close to the project. You may want to get some templates to follow that are already well done.
Pricing, if you go this way is easy. You can add $100 to the printing quote at makemynewspaper.com and still save this lady a lot of money. You can then add your time on top of that, a flat cost of, say, another $50 to $100. If she looks at the total cost (including your time) and realizes it is still saving her money on the print side (even with your time), she'll jump on it.
Then, with a sample of your work in hand, you can approach other businesses, and offer your services to save them money too. Since makemynewspaper.com also offers direct mail, you can offer that service as well.
I've been very pleased with the quality and work of this company. You can use them to start your own professional design and marketing business.
Hope this helps.