Calculate profit from revenue and total costs, estimate break-even units, and find units needed to reach a target profit by period and currency.
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Revenue and Profit Formula
The calculator uses three formulas, one for each mode.
Revenue minus Costs:
Units and Costs:
Target Profit:
Variables:
- Revenue: total money taken in before costs
- Total Costs: every cost tied to that revenue (fixed plus variable)
- Units: number of items sold in the period
- Price: selling price per unit
- Variable Cost: cost that scales with each unit sold
- Fixed Costs: costs that stay flat regardless of unit volume (rent, salaries, software)
- Target Profit: the profit number you want to hit
- Profit Margin: profit divided by revenue, shown as a percent
- Contribution per Unit: price minus variable cost
Revenue minus costs handles known revenue and total costs. Units and costs builds both amounts from unit economics and returns break-even volume. Target profit works backwards from a profit goal to the required sales volume.
Reference Tables
The ranges below are illustrative arithmetic examples, not verified industry benchmarks or targets. Actual margins depend on the business, cost definitions and reporting period.
| Industry | Illustrative Net Margin | Illustrative Gross Margin |
|---|---|---|
| Grocery / Retail | 2% - 4% | 20% - 30% |
| Restaurants | 3% - 9% | 60% - 70% |
| Construction | 5% - 8% | 15% - 25% |
| Professional Services | 10% - 20% | 40% - 60% |
| SaaS / Software | 15% - 25% | 70% - 85% |
| E-commerce | 5% - 12% | 30% - 50% |
| Cost Type | Examples | Goes In |
|---|---|---|
| Fixed | Rent, salaries, insurance, software subscriptions | Fixed Costs field |
| Variable | Materials, packaging, payment processing, shipping | Variable Cost per Unit field |
| Semi-variable | Utilities, hourly labor | Split between both, or estimate the variable portion |
Example Problems
Example 1: Quick check. A shop pulled in $25,000 in revenue last month with $18,000 in total costs. Profit is $25,000 - $18,000 = $7,000. Profit margin is $7,000 / $25,000 = 28%.
Example 2: Target profit. You sell a product for $35 with $18 in variable costs and $7,500 in monthly fixed costs. You want $10,000 in monthly profit. Contribution per unit is $35 - $18 = $17. Units needed = ($7,500 + $10,000) / $17 ≈ 1,029.41 units. Round up to 1,030 whole units, producing $10,010 in profit, to meet or exceed the goal.
FAQ
What is the difference between revenue and profit? Revenue is the gross amount you collect from sales. Profit is what is left after you subtract every cost.
Should I include taxes in costs? If you want net profit, yes. If you want operating profit, leave income tax out and include only operating costs.
Why does the break-even line say "not possible"? With positive fixed costs, a selling price at or below variable cost cannot cover them. A lower price loses money on each unit; an equal price contributes nothing. With zero fixed costs, equal price and variable cost break even at every volume, while a lower price breaks even only at zero units.
How do I handle a service business with no units? Use Revenue minus costs, or treat billable hours, projects, or clients as units in Units and costs.
