Profit Margin Calculator — Free Small Business Tool
Calculate your gross and net profit margin instantly. See how you compare to industry benchmarks. Free, no login required.
Total money coming in before any expenses
Direct costs: inventory, ingredients, materials
Rent, payroll, utilities, marketing, etc.
Net Profit Margin
Gross Margin
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Net Profit
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Ballpark only — not a substitute for professional accounting advice.
What is profit margin?
Profit margin tells you how much of every dollar in revenue you actually keep after expenses. It's the single most useful number for understanding whether your business is financially healthy.
Gross profit margin shows what's left after your direct costs (inventory, materials, ingredients).Net profit margin shows what's left after everything — rent, payroll, utilities, marketing, and all other operating costs.
Why does profit margin matter?
A business with high revenue but a thin margin is fragile. One slow month or one unexpected expense can wipe out the year's profit. Margin tells you how much cushion you have.
Use this calculator monthly. If your margin is shrinking, you need to either raise prices, cut costs, or both — and you want to catch that trend early, not when you're already in trouble.
How to improve your profit margin
The two levers are revenue (price × volume) and costs. Most small business owners default to "work harder and sell more." That's often the wrong move — a 5% price increase typically adds more to the bottom line than a 10% increase in customers.
Before cutting costs, check your COGS percentage. If your food or material costs are running above industry norms, that's the first place to fix.