Chapter 14 - Planning for profit. This chapter will help you: Establish a profit goal for a bar business; prepare a budget; price drinks on the basis of beverage cost; use an income statement; forecast cashflow; calculate a break-even point; standardize drink size, recipes, and glassware; establish a control system; use par stock as a control tool; establish a system of sales records and cash control. | © 2011 John Wiley and Sons, Inc. All Rights Reserved CHAPTER 14 PLANNING FOR PROFIT © 2011 John Wiley and Sons, Inc. All Rights Reserved © 2011 John Wiley and Sons, Inc. All Rights Reserved Establish a profit goal for a bar business. Prepare a budget. Price drinks on the basis of beverage cost. Use an income statement. Forecast cashflow. Calculate a break-even point. Standardize drink size, recipes, and glassware. Establish a control system. Use par stock as a control tool. Establish a system of sales records and cash control. THIS CHAPTER WILL HELP YOU MANAGING THE NUMBERS The bar’s ability to prosper depends on Cashflow is the month-by-month total of all of the receipts coming into the bar, minus all of the sums being paid out. Net profit or pretax profit is the total monthly revenue, minus all of the monthly expenses incurred. Debt level is a comparison of your assets and your liabilities. © 2011 John Wiley and Sons, Inc. All Rights Reserved MANAGING THE NUMBERS Assets include . | © 2011 John Wiley and Sons, Inc. All Rights Reserved CHAPTER 14 PLANNING FOR PROFIT © 2011 John Wiley and Sons, Inc. All Rights Reserved © 2011 John Wiley and Sons, Inc. All Rights Reserved Establish a profit goal for a bar business. Prepare a budget. Price drinks on the basis of beverage cost. Use an income statement. Forecast cashflow. Calculate a break-even point. Standardize drink size, recipes, and glassware. Establish a control system. Use par stock as a control tool. Establish a system of sales records and cash control. THIS CHAPTER WILL HELP YOU MANAGING THE NUMBERS The bar’s ability to prosper depends on Cashflow is the month-by-month total of all of the receipts coming into the bar, minus all of the sums being paid out. Net profit or pretax profit is the total monthly revenue, minus all of the monthly expenses incurred. Debt level is a comparison of your assets and your liabilities. © 2011 John Wiley and Sons, Inc. All Rights Reserved MANAGING THE NUMBERS Assets include cash, inventory, real estate, equipment, and amounts that others owe you. Liabilities are everything that you owe to others: bank loans, a mortgage, payroll, and accounts payable (what you owe your vendors.) When you subtract the total value of the liabilities from the total value of the assets, the result is the net worth of your business. © 2011 John Wiley and Sons, Inc. All Rights Reserved A PRE-OPENING BUDGET Six types of expenses to consider: Construction and/or remodeling costs Professional services Organizational and development costs Equipment and finish-out expenses Pre-opening expenses Contingency and working capital © 2011 John Wiley and Sons, Inc. All Rights Reserved BUDGETING FOR PROFIT A budget is a financial plan for a given period of time that coordinates anticipated income and expenditures to ensure solvency and yield a profit. The budget is a continuing two-phase process The planning phase The control phase © 2011 John Wiley and Sons, Inc. All Rights Reserved THE PLANNING
