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Profit Margin Calculator

Audit your margin. Find the leak.

Most operators look at revenue and net income. They miss the middle, which is where money quietly disappears. This calculator walks you down the P&L step by step and shows you which line is eating your business.

4
Margin layers to audit
10%
Healthy SMB net margin floor
1%
Price lift = 11% profit lift
3x
Most common leak: variable spend
Estimated Net Profit Margin
0%
What's left after delivery, sales, overhead, and tax. Per dollar of revenue.
Net Profit (Monthly) Health Check
$0
Negative < 0% Marginal 0-10% Strong 10%+
Healthy
SaaS

Sets sensible defaults for the five P&L lines below.

$50,000

Top of the P&L. Total revenue collected this month, gross of all costs.

Model default: $50K typical
$7,500

Direct cost of producing what you sell. Materials, hosting, fulfillment, merchant fees, frontline labor.

Model default: 15% of revenue
$8,000

Commissions, ad spend, channel fees, affiliate payouts. Costs that scale with each new sale.

Model default: 16% of revenue
$22,000

Rent, salaried staff, software subscriptions, insurance. Costs that hold steady regardless of volume.

Model default: 44% of revenue
$1,500

Below-the-line items. Loan interest, equipment financing, estimated tax accrual, one-off legal.

Model default: 3% of revenue
Gross Margin
85%
Revenue minus cost of delivery. $42,500/mo.
Contribution Margin
69%
After variable sales. $34,500/mo.
Operating Margin
25%
After fixed overhead. $12,500/mo.
Net Margin
22%
After interest and tax. $11,000/mo.
P&L Waterfall: where the dollar goes
Stage total Cost line Net profit
Margin by margin, you vs. the model defaults
Model default You
Gross Margin Revenue minus COGS
85%
Contribution Margin After variable sales + marketing
69%
Operating Margin After fixed overhead
25%
Net Margin After interest and tax
22%
Where the leak is
Each bar shows your margin at that layer. The white tick is the model default for your industry. The widest gap is the line eating your business.
Gross Cost of delivery
+5 pts
Contribution Variable sales + marketing
-5 pts
Operating Fixed overhead
+5 pts
Net Interest + tax
+5 pts
!
Your contribution margin is the widest gap vs the model default. That points at variable sales and marketing as the biggest leak. Audit ad-channel ROAS and sales commissions first.
Sensitivity: which lever moves net margin the most?
Modeled against your current inputs
Operator Playbook: attack the leak in this order
1 Raise prices before you cut costs. A 1% price increase, held without losing customers, drops almost entirely to net. Cost cuts compound slower and hurt morale faster.
2 Fix variable spend second. Ad channels, commissions, affiliate payouts. These scale with revenue, so a small efficiency gain repeats every month. Audit each channel's blended ROAS, kill the worst one entirely.
3 Renegotiate COGS, do not just shop it. Most vendors will protect a long account before they lose it. Lead with volume commitment, not threats. Ten-percent off COGS on a 30% margin business is a 33% lift in gross profit.
4 Fixed costs come last and they come slow. Rent, salaried headcount, software stack. Touch these last because they carry political weight. When you do touch them, cut the bottom 10% in one move, not by attrition.
5 If net is negative, the question is solvency, not margin. Stop spending on growth, fire the bottom decile of customers by gross margin, and rebuild from contribution up. A negative-net business does not need a marketing plan, it needs a runway plan.

Free Detailed Report

Get the full breakdown by email & SMS.

We'll send you a 5-page PDF with your numbers, the model defaults for your industry side by side, the specific margin layer most likely to be eating your business, and a 30-minute strategy slot with the founder if you want one.

✓

Your margin report is on the way.

Check your email for your personalized report (and spam if needed). We'll use your number for follow-up from Nirvani when relevant. Sammy will personally reach out within 24 hours if you flagged the strategy-call option.

Meeting

How this calculator works

Why four margins instead of one?
Because where you bleed determines what you fix. Gross margin reveals delivery cost. Contribution margin reveals variable-spend efficiency. Operating margin reveals overhead bloat. Net margin reveals the final scorecard. A business with strong gross and weak operating margin has an overhead problem. A business with strong contribution and weak gross has a vendor problem. Looking at net alone is like checking your bank balance without reading the statement. You see the result. You miss the cause.
What goes in COGS vs variable sales vs fixed?
COGS is the direct cost of producing what you sold this month. Hosting for SaaS. Materials and shipping for ecommerce. Frontline labor for service businesses. Variable sales and marketing is anything that scales with new customer acquisition. Ad spend, affiliate payouts, commission structures, channel partner fees. Fixed operating is rent, salaried headcount, software subscriptions, insurance. If you laid off your sales team tomorrow, variable goes to zero. If you laid off your sales team tomorrow, your office rent still hits.
Why is the "Other" line separated out?
Because interest and tax are not operating decisions. They are downstream consequences of your capital structure and your jurisdiction. We split them out so operating margin stays comparable from one business to the next (operating margin usually excludes interest and tax). The net margin number then tells you what actually flows to the owner, after the bank and the government take their cut. Both are real. But you cannot manage them with the same playbook.
Where do the model defaults come from?
Defaults are Nirvani's planning estimates for each industry, not figures from a cited study. Treat them as starting assumptions, not measured medians. Regional cost-of-living, niche, and channel mix will move your numbers. The defaults are a starting point to flag outliers, not a target.
What's a "good" net margin?
Industry-dependent, but here's the rough scale. Restaurants and grocery: 3-6% is healthy, 8% is best-in-class. Service businesses (HVAC, salons, auto repair): 8-15% is healthy. Ecommerce DTC: 5-10% is healthy once you scale past the unit-economics death zone. SaaS at maturity: 15-25%. Law and real estate brokerage: highly variable, often 20-40% because of low fixed cost per transaction. Anything sustained above 25% net usually has a moat (brand, IP, switching cost). Anything sustained below 5% is one bad month from break-even.
Should I raise prices or cut costs first?
Almost always raise prices first. Run the arithmetic: at a 10% operating margin, a 1% price increase that keeps volume and costs steady lifts operating profit by about 10%, while a 1% volume increase lifts it by less, because every extra sale carries its own variable cost. The reason is leverage. Price flows almost entirely to the bottom line. Costs hit the bottom line dollar for dollar, but cutting costs hurts morale, capability, and customer experience in ways the model doesn't capture. Raise prices on new customers first, grandfather existing customers if the relationship matters, and only touch costs once pricing is at market.
What's in the detailed PDF report?
Five pages. (1) Your P&L waterfall and margin stack, your numbers vs the model defaults side by side. (2) The leak diagnostic, which margin layer has the widest gap vs the model default and why. (3) The specific levers most likely to move your weakest margin, ranked by impact. (4) A pricing-and-packaging audit checklist. (5) Implementation roadmap, week 1 through day 90. No fluff. We'll email it after you submit. Delivery time can vary.