Tool
Profit Margin Calculator
Calculate gross and net profit margin and use the results in pricing and planning.
Summary
Gross margin = (Revenue − COGS) ÷ Revenue. Net margin = (Revenue − all costs) ÷ Revenue. Gross judges the offer; net judges the business.
Gross profit
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Gross margin
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Net profit
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Net margin
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Benchmarks (typical SME)
- Services / agencies: 40-60% gross
- Physical retail: 25-40% gross
- Software / SaaS: 70-85% gross
- Food & beverage: 55-70% on ingredients; labour drags net
How SMEs use this
- Pricing: never below gross margin floor
- Channel choice: drop channels with COGS + CAC above price
- Planning: target a net margin % and reverse-engineer costs
Frequently asked questions
Owner salary in COGS or OpEx?
OpEx usually. Allocate billable portion to COGS if owner works on client projects.
Next step
Keep exploring related resources to strengthen this area of the business.
See Break-even CalculatorPhase 2 content slot (ads / affiliate)