“I made good money this month, but I don’t know where it went.” If that sounds familiar, the problem is almost always confusing revenue with profit.
Two different concepts
- Revenue: everything that came in from appointments.
- Profit: what remains after paying materials, fixed expenses and fees.
profit = revenue − materials − fixed expenses − fees
Example
| Item | Amount |
|---|---|
| Monthly revenue | 5,200 |
| Materials used | − 900 |
| Fixed expenses | − 800 |
| Card fees | − 150 |
| Left over | 3,350 |
Earning 5,200 does not mean having 5,200. And you still need to pay yourself out of what is left, so the “profit” after your own income can be much smaller. That is why your income belongs in the math as a cost (see the article on fixed costs).
Signs you are mixing the two up
- You look at your account and think “there is plenty”, but supplies run out and there is no money to restock.
- You don’t know how much the business costs you per month.
- You got more clients, but money is still tight.
How to keep track
- Record every appointment (amount, payment method).
- Record every business expense, separate from personal ones.
- Close the month: add everything up and apply the formula above.
Doing this by hand is possible but takes effort. The Successful Manicure app has a monthly report showing gross revenue, material costs and net profit, plus the number of jobs and hours worked.
