Profit Margin = (Revenue − Cost) / Revenue × 100. Markup = (Revenue − Cost) / Cost × 100.
Revenue
SaaS margin: 70–80%. Retail: 30–50%. Restaurants: 3–9%.
Use this calculator when preparing for a business decision that depends on this metric. Calculating the figure in advance — rather than estimating — prevents the kind of imprecision that leads to suboptimal choices.
A common mistake is comparing metrics that use different definitions — gross margin versus net margin, revenue versus profit, customer count versus paying customer count. Always confirm the definition of each input before comparing results across periods or sources.
A startup founder uses the calculator to determine break-even point: fixed monthly costs £12,000, variable cost per unit £18, selling price £42. Break-even is 500 units per month — a concrete sales target that the team can evaluate against pipeline and capacity.
Varies by industry. 5–10% is typical retail, 20%+ is healthy for services, 50%+ for software.
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