Overview

First-half profit is down $247k on clean books, and the decline comes from club-night costs rising while revenue fell.

Key points

• Year-to-date revenue is down 6.6%, $6.79M to $6.33M.
• Profit is down 20.8%, $1.19M to $940k; margin 14.8% vs 17.5% last year.
• Key drivers: talent up $121k, security up $110k, commissions up $68k, plus $279k of card spend not yet itemized.
• The fix is rate resets and controls, not cuts: rebid security and medic, put DJ money on paper, close the books monthly.

Cleanup Review

The $595k of uncategorized bank activity is now fully categorized, and the clean books flip first-half profit from up 6% to down 21%.

• $114k of it was revenue (a private event buyout, an out-of-town pop-up wire), so revenue is down 6.6%, not the 8.3% we were reporting.
• $279k is card payments with no line items yet: a partner card ($198k), card 9224 ($68k), AmEx ($11.5k).
• Profit lands at $940k against $1,187k last year; margin 17.5% to 14.8%.

Details of the rest: $72k DJs and artists, $25k G&A and professional services, $16k events ops, $52k balance-sheet items (cash in transit, equipment, distributions), $34k across payroll, promoters, partner medical and small items.

Profit Bridge

Revenue fell $450k while club-night costs rose $299k; that is the whole decline.

• Talent up $121k (+12.6%) and above last year in five of six months, including the weak ones (Feb, Apr, May).
• Security up $110k (+30.6%) and commissions up $68k, most of that one DJ coordinator.
• Cuts in trips, marketing, facilities, partners and payroll offset most of the damage.
• Two numbers can still move against us: the $397k COGS drop needs verification, and the $279k of card spend is unknown.

Security, Medic and DJ Coordination

Three rates drifted up with nobody watching; the coverage did not change, the bills did.

Cost of Goods Review

COGS is down $397k (-39.5%), but only part of that is real savings.

• It fell 30-45% in every single month, so this is not a one-off timing gap. As a share of revenue: 14.8% to 9.6%.
• The two big liquor distributors are down a combined $277k. One is on the exact same delivery cadence (14 invoices both years) with smaller orders, which is genuinely buying less.
• The weekly small vendors nearly vanished from the checking account: produce went from 27 deliveries to 3, ice from 42 to 2. Those bills are leaving through another door, most likely the un-itemized cards or sitting unpaid.
• One individual paid weekly through COGS went from $3.1k (7 payments) to $25.9k (40 payments). Worth a look.

The check that settles it: pull the two distributors' own statements and scan the card statements for beverage and food charges. Two weeks, tops.

Costs by Category

Allocation Summary

All 114 uncategorized items are now categorized and tie to QuickBooks to the penny.

Conclusions

The business works: 14.8% margin on $6.3M, and June beat last June. The problem is three rates that drifted up while revenue fell (security, medic, DJ coordination), plus two unknowns that can only move profit down: the $279k of card spend and the COGS drop. The fix is rates reset to market, money on paper before it moves, and a monthly close.

Action Plan

• 1. Card statements. The partner card is $198k of the $279k unknown and is not on the books feed. Statements Feb through Jun, date this week, then monthly itemization as standing practice.
• 2. DJ deal memos. Per-night talent budget, deal memo above a threshold, and written terms for the coordinator.
• 3. Security and medic rebid. Rate cards from both vendors, quotes from two competitors; roughly $150k of annualized savings on the table.
• 4. COGS verification. Match the two distributors' statements, find the produce and ice bills, look at the weekly individual payee.
• 5. Event P&L gate. No talent or promoter commitment until the night pencils on a one-page P&L; payment holds until it exists.
• 6. Weekly flash, categorization kept current. One page a week against last year, and new spend categorized as it comes in so the blob does not rebuild. We are not restating QuickBooks for the first half; the allocation sheet goes to the bookkeeper for reference.

Timeline

Appendix A: Work Completed

The numbers in this summary sit on a full rebuild of the books, not a spot check.

• Rebuilt the ledger transaction by transaction from QuickBooks (Jan 1 through Jul 15) and tied every account to the printed totals.
• Built the expense analysis workbook: category map, monthly matrix, top vendors, card controls, security overspend.
• Mapped every dollar of people cost across 401 payees, payroll and vendor rails side by side.
• Assembled 180 nights of point-of-sale data (Saturdays average $82.6k net, Fridays $68.4k, Thursdays $45.9k, Wednesdays $29.6k).
• The team categorized all 114 uncategorized items; the control total ties exactly, and the headline figures were independently recomputed and match.

Sequence: Jul 16, ledger pull and first cost review. Jul 17-18, expense workbook, pay-by-person, night-level sales. Jul 21-23, the team worked the allocation sheet. Jul 24, allocation applied and this summary rebuilt.

Appendix B: Key Numbers

Appendix C: Notable Items

The biggest of the 114 items, with where the team landed them. Deposits in parentheses; full detail in the allocation sheet.

Plus 88 smaller items, all categorized: DJs and performers by Zelle, promoter commissions, project consulting, partner medical, decor, team meals and the like.

Appendix D: Staffing Comparison, Q1

The clean like-for-like on staffing is the first quarter, since the 2026 payroll file is a 7-week sample so far. Q1 revenue was down 7.1%, and the people on payroll are not the problem: house staff rose 3% and management fell 14%. The growth is all on the contractor rails, security and medic up 46% and talent up 7.5%, with DJ logistics roughly doubling on top. The full-half payroll pull and the 15 dual-rail reconciliation flags ($371k vendor side, not confirmed double pay) close this out.

GOSPËL · Ambleside Partners LLC

Clean books, rates reset to market, money on paper before it moves. That's the whole plan.