Profit and Loss Statement

Basic economics to be successful – revenues must exceed expenses! 

Sounds basic and it is. But how often do we ignore basics. I am referring to the outings and events that our clubs host. Do you have any idea what kind of margins you have on your events? It could well be eye opening. In fact, it might not even be worth doing some unless you know in advance that your event is a break even one and that the ’profit’ is in the goodwill of the event which can be very important at a private club.

On the other side of the coin, you may be turning down outside events because they aren’t paying your posted price. You may want to reconsider once you do the math. I have seen many a club or course turn down an outside golf tournament over food and beverage issues. An event might be nixed if one department is losing despite the fact that another can make up for it and then some. F&B margins (or cost of sale/goods) are historically low anyway as compared to golf. Since the flow through on golf is high, let those revenues (or profits) offset any potential loss in the F&B department. 

The easiest way to analyze each event is to do a profit and loss statement for each intended event. By doing a sales breakdown, you find out the number of people attending to make it a breakeven event or a highly successful one. For instance, you are having an event, and you discover that it takes 50 attendees to cover your expenses, then you will be more apt to market the event accordingly by setting a goal of let’s say 100 to make it a huge success. Just picking a number out of the sky or making a supposition is foolish. 

This process is a very simple one if you can insert numbers into a spreadsheet such as the one that has been provided. This is a great exercise to do with your department heads in regards to the events that they are proposing. It breaks down each area of the event by labor, food costs, beverage costs, and other miscellaneous expenses related to the event. Then a sales breakdown is done assuming pricing and attendance to generate the total sales. You will then see what the profit (hopefully) is based on your assumptions. You can then go back and tweak either your costs or your sales projections accordingly.    The sheet also will show the profit percentage which will then become a benchmark for each type of event that you do. 

Do a sales analysis with a profit and loss statement and find that you have a better handle on your revenues by being better able to market for success through exact assumptions and controlling expenses by being able to tweak them accordingly to make a profit.

Click here  to view the Profit and Loss Statement Excel Sheet.