To calculate the profit (loss) of the Fund-Raising Golf Scramble event last year, we need to subtract the total expenses from the total revenue.
Total revenue = Entry fees + Sponsorship
Total expenses = Fixed costs + Variable costs
Profit (loss) = Total revenue – Total expenses
Example
Let’s say that the following revenue and expense information is provided in the book:
- Entry fees: $10,000
- Sponsorship: $5,000
- Fixed costs: $2,000
- Variable costs: $3,000
Total revenue = $10,000 + $5,000 = $15,000
Total expenses = $2,000 + $3,000 = $5,000
Profit (loss) = $15,000 – $5,000 = $10,000 profit
Break-even entry fee
The break-even entry fee is the entry fee that needs to be charged in order to cover the total expenses of the event.
Break-even entry fee = (Fixed costs + Variable costs – Sponsorship) / Number of players
Example
Using the same revenue and expense information from above:
Break-even entry fee = ($2,000 + $3,000 – $5,000) / 100 players = $20 per player
Entry fee increase to make a profit of $4,000
To increase profits by $4,000, the entry fee would need to be increased by $4 per player.
New entry fee = $20 + $4 = $24
Concerns with increasing the entry fee
Some concerns with increasing the entry fee include:
- Losing players: If the entry fee is too high, players may choose to play in other golf tournaments.
- Making the event less accessible: Increasing the entry fee may make the event less accessible to people with lower incomes.
- Damaging the reputation of the event: If people perceive the entry fee to be too high, it may damage the reputation of the event and make it more difficult to attract players in the future.
Number of players to make a profit of $4,000
To make a profit of $4,000 with the same entry fee and sponsorship, the event would need to recruit an additional 200 players.
New number of players = 100 + 200 = 300 players
Concerns with adding more players
Some concerns with adding more players include:
- Increased costs: Adding more players may increase the costs of the event, such as the cost of food, drinks, and prizes.
- Decreased quality of play: If the event is too crowded, it may decrease the quality of play for all participants.
- Increased logistics: Adding more players may increase the logistics of organizing and running the event.
Other ways to generate additional revenue
Other ways to generate additional revenue for the event include:
- Selling raffle tickets
- Selling merchandise
- Accepting donations from individuals and businesses
- Partnering with local businesses to offer discounts or promotions to event participants
Ways to reduce expenses
Some ways to reduce expenses for the event include:
- Negotiating lower prices with vendors
- Volunteering food and drinks from local businesses
- Asking for donations of prizes and other items
- Eliminating unnecessary expenses
Conclusion
There are a number of ways to increase revenue and reduce expenses for a golf scramble event. The best approach will vary depending on the specific circumstances of the event. It is important to carefully consider all of the options before making any decisions.
