By Lee Grayson | Demand Media
Concession services offer food and occasionally souvenirs from trailers located near event venues, including small sports stadiums, amusement and community parks, and school sports fields. While government or school districts operate some services, private companies contract with municipalities and schools to operate other concession trailers. Calculating the profit from a trailer involves careful attention to pricing and tracking sales, and also determining the amount of typical expenses for your concessions operation.
Basic Profit Analysis
A basic profit analysis for a concession trailer tracks the price paid for goods, including the raw materials used to make the food, cost of prepackaged goods sold at the trailer, and the sales price earned for the items sold at the stand. The price of goods includes the cost of the product and any fees charged for taxes and delivery of the items to the stand. Add the fees collected for items purchased for the week and deduct the costs of the products to determine an overall profit and loss statement.
Spoilage and Waste
Concessions focusing on food sales have additional costs involved when food spoils or staff waste raw materials used in food preparation. Calculation of this figure requires estimating the amount of waste at the end of the workweek. Estimate the waste based on the percentage of the goods thrown away and the total cost of the items. Subtract the spoilage and waste costs from the profits listed under the basic profit analysis in the first segment.
While schools and some municipal services operate nonprofit concession trailers with volunteer staffing, for-profit trailer operations require deducting the cost of paying staff from the profits. Full-time staffing costs frequently include additional fees for matching Social Security and Medicare and paying required employee taxes to federal and state governments. Subtract the weekly costs of labor from your profit figure. Concession trailers also require basic utilities, including electricity, natural gas or water, any lease or mortgage expenses, and also casualty insurance to protect your business from lawsuits. Divide these monthly costs by 4.33 to determine your weekly expenses for these fees. Add the cost of these expenses and subtract this total from your profit figures.
The amount of theft from concession trailers depends on the location of the stand and the amount of security. Calculation of the trailer profit involves either a general survey of goods to determine the amount of food taken without payment or through a physical inventory once a week to document the true loss due to consumer or staff theft. Subtract the actual or estimated cost due to theft from your profit figure to determine the total weekly profits of your trailer operations.