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AFC @BeeBusinessBee is a private sector business that aims to make a profit. Any profit that is made by the business can either be reinvested back into the business or the owner (Boris Bee) could choose to keep as his reward for taking the risk and setting up his own business.

To calculate the profit or loss made by any business then we use this simple formula;

Profit = Revenue - Costs

So if AFC @BeeBusinessBee has revenue for the year of £1,000,000 and total costs of £750,000, the profit that AFC @BeeBusinessBee would make is £250,000.

If this profit was to be reinvested back in to the business, lets say to buy some new players and improve the ground. This would be known as Retained Profit. This is profit that is reinvested back into the business, typically with the aim of growing the business and making an increased profit next year.

Alternatively Boris Bee could decide to keep the profit for himself. Remember it was his money that he invested in the first place, so why should he not get the rewards for his investment and hard work in the business?

There are two types of profit that we can calculate in business; Gross Profit and Net Profit.

Gross Profit is the profit that is made from the selling of products / services. This will be the largest profit that AFC @BeeBusinessBee would make. This would be the profit that is made on all of the ticket sales, which would only include the cost of making the sale. In this case it would be the cost of the ticket seller and the paper for the ticket.

The formula to calculate gross profit is;

Revenue - Cost of Sales

So if each ticket sells for £20 and it costs £2 to make the sale then the gross profit for each ticket would be £18. If 1000 tickers were sold this would be a gross profit of £18,000

The net profit will be the profit that AFC @BeeBusinessBee gets to keep. This will be smaller than the Gross Profit as this worked out after all costs have been taken away from the revenue.

The formula to calculate net profit is;

Gross Profit - All Other Expenditure

So if the club had wages of £12,000 and utility costs of £4,000 each year. This would mean the Net Profit for AFC @BeeBusinessBee will have a net profit of £4000. The club can decide what to do with this profit. It can either retain the profit and invest it back into the club to buy new players or it could share this out with all the shareholders.



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