Profit vs Revenue: Why Being Busy Doesn't Mean You're Profitable

You worked 15 events last month. You made £12,000 in revenue. But after all your costs, you're left with £2,000 profit. Being busy doesn't always mean you're profitable. Here's how to understand the difference—and why it matters.

Revenue vs Profit: The Basics

Let's clear up the confusion:

• Revenue is the total money coming in. Every pound clients pay you.
• Profit is what's left after you subtract all your costs.

A vendor with £100,000 revenue and 10% profit margin makes £10,000. A vendor with £50,000 revenue and 40% profit margin makes £20,000. The second vendor works less and earns more.

Revenue is vanity. Profit is sanity. Cash flow is reality.

The Hidden Costs That Kill Profit

Most vendors know their obvious costs: food, fuel, staff. But it's the hidden costs that destroy margins.

Your Time

That £800 wedding booking looks great until you count the hours. 2 hours of emails and calls. 3 hours of prep. 6 hours on site. 2 hours of breakdown and travel. 1 hour of invoicing and follow-up. That's 14 hours—meaning you earned £57/hour before any other costs.

Now subtract food (£200), fuel (£50), and consumables (£30). You're at £520 for 14 hours—£37/hour. Still okay? Maybe. But if you could've done a corporate job for £1,200 in the same time, you've actually lost money by taking the wedding.

Fixed Costs You Forget

These costs exist whether you work or not:

• Insurance (spread across all bookings)
• Vehicle finance or depreciation
• Storage unit rental
• Software subscriptions
• Phone contract
• Equipment depreciation

If your fixed costs are £1,000/month and you do 10 events, each event needs to cover £100 of fixed costs before you see any profit.

Waste and Inefficiency

Over-ordered for a festival and threw away £150 of stock? That comes straight off your profit. Drove 40 miles to a venue when a closer booking paid the same? More profit lost. These small inefficiencies compound.

How to Calculate Your Real Profit

Here's a simple framework for any booking:

That £2,000 booking has a true profit of £680—a 34% margin. Not bad, but very different from the £2,000 you might have assumed was "all profit."

Warning Signs You're Busy But Not Profitable

Watch for these red flags:

• You're always busy but always broke: If you're working every weekend but your bank balance never grows, your margins are too thin
• You dread certain types of bookings: Often the bookings you dread are the unprofitable ones—your instincts know
• You can't afford to turn down work: Profitable vendors can be selective. If you must say yes to everything, you're probably not charging enough
• Your expenses grow as fast as your revenue: Scaling should improve margins, not just multiply costs
• You never have money for tax: If you're spending everything that comes in, you're confusing revenue with profit

How to Improve Your Profit Margins

1. Raise Your Prices

The most direct solution. A 10% price increase goes straight to profit. If your food costs are 30% of revenue, a 10% price increase improves your margin by more than 10% because costs stay the same.

2. Reduce Food Costs

Aim for food costs at 25-30% of menu price. If you're higher, look at portion sizes, supplier prices, or menu complexity. Simpler menus often mean better margins.

3. Set Minimum Booking Values

Small bookings kill profit because fixed costs (travel, setup time) are spread across less revenue. A £400 minimum ensures every booking is worth your while.

4. Reduce Travel

A booking 60 miles away costs more in fuel and time than one 10 miles away. Either charge more for distance or focus on local work.

5. Upsell

Adding a £200 dessert package to an existing booking is almost pure profit—you're already there, already set up. Upsells have the best margins of anything you sell.

6. Fire Unprofitable Clients

Some clients aren't worth keeping. If they always negotiate, always have problems, and take triple the admin time, your margin on their bookings is probably negative. Let them go.

The Profit-First Mindset

Instead of "revenue minus costs equals profit," flip it:

Revenue minus profit equals costs.

Decide what profit margin you need (say, 30%), and work backwards. If a booking generates £1,000, you need £300 profit. That means costs must stay under £700. If they won't, either raise the price or don't take the booking.

This forces you to think about profit first, not as an afterthought.

Know Your Numbers

At minimum, track these monthly:

• Total revenue: All money in
• Total direct costs: Food, consumables, event-specific expenses
• Gross profit: Revenue minus direct costs
• Fixed costs: Insurance, storage, subscriptions, etc.
• Net profit: Gross profit minus fixed costs
• Profit margin: Net profit ÷ revenue × 100

Review these monthly. If margins are slipping, you'll catch it early. If they're improving, you'll know what's working.

Final Thoughts

Being busy feels productive. Working every weekend feels like success. But if you're not profitable, you're just running an expensive hobby.

The goal isn't to maximise revenue—it's to maximise profit while working sustainable hours. Some of the most successful vendors work fewer events than their competitors but make more money because they've optimised for profit, not just turnover.

Know your costs. Track your margins. Price for profit. The rest follows.