Use this Small Business Profit Calculator to estimate net profit, profit margin, expense ratio, annual profit projection, and profitability status. It helps owners see whether revenue is turning into usable profit or being absorbed by costs.
Enter your total revenue, product or service delivery cost, payroll, and operating expenses. The calculator subtracts total expenses from revenue, then converts the result into a profit margin and health score.
Use monthly or annual numbers consistently.
A higher profit margin means your business keeps more of every dollar after expenses. Low or negative profit means pricing, cost control, or sales volume needs attention.
Benchmarks vary by industry, but many healthy small businesses aim for 10% to 20% net margin.
If revenue is $100,000, COGS is $40,000, payroll is $20,000, and operating expenses are $15,000, net profit is $25,000 and profit margin is 25%.
A small business should ideally generate enough monthly profit to cover owner pay, taxes, reinvestment, and reserves. Many owners target at least a 10% to 20% net profit margin.
Divide your target profit by your expected profit margin. At a 20% margin, you need about $50,000 in revenue to earn $10,000 profit.
Many retail businesses operate around 5% to 10% net margin, while specialty or direct-to-consumer stores may target higher margins.
You can increase profit by reducing waste, renegotiating supplier costs, improving pricing, lowering overhead, or shifting sales toward higher-margin products.
Successful small businesses vary widely, but they usually maintain positive cash flow and consistent margins after owner compensation and operating expenses.
| Metric | Meaning |
|---|---|
| Net Profit | Money left after business expenses |
| Profit Margin | Profit as a percentage of revenue |
| Expense Ratio | Expenses compared with revenue |
| Annual Projection | Estimated yearly profit at current level |