Using a Banquet Profit & Loss Statement to Enhance Profitability in Food & Beverage
In a previous article focused on golf and country clubs, we suggested that creating a profit and loss statement for every large banquet or catering event is an important tool for management to assess whether the functions they sell are actually profitable. Understanding banquet profitability is important not only for clubs, but also for any establishment that sells catered events, including hotels and restaurants. An establishment that carefully evaluates each piece of banquet business will know what types of events to keep booking and which events to avoid, enhancing the overall long-term health of the operation.
What, exactly, is a banquet profit and loss statement?
It's a profit and loss calculation performed for one individual banquet or other catering-type event that incorporates all of its associated revenues and costs.
What are the benefits?
By generating a profit and loss statement for each banquet function, management will be able to understand the level of profitability contributed by each individual event, schedule staff appropriately, more easily complete a final invoice for the event, enhance management of future banquet menu pricing, and improve food cost control. The banquet floor manager or captain can also use the tool as a guide to understand how the event was sold, and how to best service the event, insuring no details are overlooked. Through the completion of a banquet profit and loss statement, one operator we worked with reported reduction in food cost of 7 percentage points for one of his events.
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