Get Profitable First, Then Think About Growing | Sarah Colgate
Why adding more tours might be the worst thing you do this year
When we took on Aquaduck, my brain went into overdrive.
I sat up at night writing lists. A million and one things we could do better, faster, bigger. New tours. New market & routes. More departures. More more more. I had revenue coming in the door and I told myself the way to make more money was to do more stuff.
I was wrong. And it nearly cost me.
Let me tell you why, because I see operators making this exact mistake every single week.
The number most operators never look at
Here is a stat that should stop you in your tracks.
Tourism Research Australia tracks how many businesses survive over four years. For travel agency and tour operator services, only 57% made it through the four years to June 2024. The 2021 to 2025 group came in at 58%. Compare that to all businesses across the whole economy, where 64% then 63% survived.
So tour operators die faster than the average Australian business. Not by a little. By six or seven points.
Sit with that for a second. Four in ten tour operators are gone inside four years. And these are real ABS numbers, not something I made up to scare you.
I have to admit, when I first saw figures like this I assumed it was the businesses that never had any customers. The ones that couldn't sell. But that is not what I have seen on the ground. Plenty of the operators who go under are busy. Booked out. Run off their feet. They have customers coming out of their ears.
They just aren't profitable. And being busy is not the same as being profitable.
Busy nearly killed me
Back to Aquaduck.
We were doing tours. Good tours. The boat was full a lot of the time. On paper I looked like I was winning. But when I actually sat down and worked out what I was making per passenger, the answer was about a dollar. One dollar of net profit per person who walked up those steps.
One dollar.
I was working 70 hour weeks, carrying all the stress, all the risk, all the staff, all the maintenance, all the compliance, for a dollar a head. And my big plan to fix it was to add another tour and do it all again somewhere else.
Trust me, that is the trap. When the margin is thin, your instinct is to do more volume. More tours, more passengers, more revenue. But if you are only making a dollar a head, doing twice as many tours just means twice the work for the same thin margin. You don't fix a leaky bucket by pouring more water in.
So I stopped. I stopped dreaming about expansion and I looked hard at the business I already had.
What I actually did
I went through the numbers properly. Not revenue. Revenue lies. I looked at what each tour actually cost me to run and what was left at the end.
I looked at my channels and I started reporting on it monthly to see where our business was coming from.
I know how much agent's commission was eating before the money even hit my account. That money comes out before the payment lands, so you never feel it leave. It is invisible. I made it visible. I worked out the real annual dollar figure I was handing over and it was confronting.
I looked at the pricing, the previous owners told me it could never go above $40. We had gone from $38 to $40 and I planned to push right through that.
I looked at where my direct bookings were coming from and how I could get more of them, because a direct booking keeps the commission in my pocket.
None of this was sexy. None of it involved a shiny new tour. It was just me, my numbers, and a strong coffee. But over time I moved net profit per passenger from that one dollar to three dollars. Same boat. Same tours. Three times the profit per head.
That is the whole game. I did not add a single new product. I made the one I had work properly.
Cashflow is the thing that actually kills you
Here is the part nobody likes talking about.
You can be profitable on paper and still go broke.
Tourism is seasonal. The money comes in waves.
You have a cracking summer and then a quiet stretch where the bookings dry up but the rent, the wages, the insurance and the loan repayments do not.
When you bolt on a new tour, you are not just adding revenue. You are adding cost, and the cost shows up first. New marketing spend. New training. Maybe a new vehicle with a repayment attached. You are pouring money out the door for months before the new tour brings a cent back in. And you are doing it right when your existing cashflow is already lumpy.
I have watched operators add a second product going into their quiet season and run themselves straight into a cash hole. They were profitable. They still nearly went under.
Because being profitable and having money in the bank on the 15th of the month when wages are due are two completely different things.
So before you expand, I suggest you ask yourself one question.
If this new tour loses money for six months, can my current business carry it? If the honest answer is no, you are not ready to expand. You are ready to get your existing tour more profitable first.
Focus is a profit strategy
There is a quiet pressure in this industry to keep adding. More tours, more packages, more options, more channels. We think a bigger menu means a bigger business.
For me, the opposite turned out to be true. The fewer things I did, the better I did them, and the more money I made. One tour I understood inside out, priced properly, sold direct as much as I could, and ran tight, beat three tours I was spreading myself thin across.
Every new tour you add splits your attention. It splits your marketing budget. It splits your team. It adds another thing that can go wrong at 6am when a guide calls in sick. And it adds another product whose numbers you now have to know cold.
You don't have to be everything. You have to be profitable.
Focus Strategy: Niche Competitive Advantage
So before you add a single new tour
Here is what I suggest you do first.
Work out your net profit per passenger on the tour you already run. Not revenue. Not turnover. The actual dollars left per head after everything. If you don't know this number, that is your starting point right there.
Make your agent commission visible. Add up what you handed over to the platforms last year as one annual dollar figure. It will get your attention.
Look at your pricing. When did you last move it? If your costs have gone up and your price hasn't, you are quietly going backwards.
Build a simple cashflow picture month by month. Find your tight months. Know exactly when the money is thin before you commit to spending more of it.
Only when the tour you have is genuinely profitable and your cashflow can carry a quiet season, then and only then have the conversation about adding more.
Get the one you have right first. A profitable single tour is worth more than three tours bleeding you dry and three times the stress on your life.
I have lived both. I know which one lets me sleep.
If you want to know your real numbers and you are not sure where to start, the Tourism Business Health Check is the first step. It will show you where the money is actually going.
Or if you would rather talk it through, call me on 0491 729 043. Let's get the business you have working properly before we ever talk about making it bigger.
