Profit and Loss Accounts (page 6)


We all work in an industry that has unsociable hours and we have a duty and responsibility to make sure our staff get home safely late at night. Travel by taxi (for staff and the odd pool team excursion) and the very occasional business trip by train, for instance, will account for most of this expenditure. Also include realistic claims for fuel etc for your private vehicle for those odd runs to cash and carry and other shops under the heading Travel.

Hire or Purchase of Equipment

Our kitchens and bars are full of capital equipment that will (and regularly does) break down and need replacing because they are beyond economic repair. If your business is cash rich then you might consider purchasing these items outright or lease purchase or rent them. Included in these costs might be the lease for a telephone system, rent for an EPOS till and printer system, rent for a background music system, rent on a de-carboniser unit or the outright purchase for a business computer/ printer.


Fixed sundries and other sundries (sometimes combined as sundries) is the way to account for all those little things that do not fit anywhere else in the P&L account.

Training and Staff Uniforms

A business that does not invest in developing the skill set of its employees will never operate at its optimum, so allocating funds for personal development of you and your staff is money well spent. You can minimise these costs with low staff turnover and credits available to staff from the government to training providers.


It can be a frightening revelation when you total the amount you spend on overhead and stock purchases in running your business. Your job is to maximise the sales and minimise the costs and no saving is too little to consider if you want to make the most profit. Earnings Before Interest, Tax, Depreciation and Amoritisation (EBITDA) is sometimes called operating profit and is the amount you will have available to you after you have paid for everything.

You will need to make provision for any Interest you pay on loans used to finance the business; Income/Corporation Tax due to HMRC; writing down the value of your inventory / company vehicle as Depreciation; and Amoritisation (sums due on capital borrowed, VAT and Tax still due but not paid).

EBITDA is for the accountants to deal with but in simple terms is your “bottom line” and it is this from which you will pay yourself for your time and effort and pay for all your living expenses or savings and those pesky taxes.

Break Even Point

The final set of figures that you should always be aware of is the break even point of the business. This is the amount of sales you need to achieve to make neither loss nor profit. Expressed as an ex-VAT amount and then grossed up for VAT you can see what with spending and other costs the business has to take just to stand still.

This is the most important calculation you can make when assessing the viability of a business, because you will need to ask yourself “Can I reasonably expect to achieve this level of sales and then improve on that figure so I can actually make a living?

If you require detailed analysis and advice on your Profit and Loss Account or would like a template for use in your business plan then please see the Consultancy Services section of the website.

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