Question 1

How do you calculate profit margin?

Accepted Answer

Profit margin is profit divided by price. Subtract your cost from your price to get profit, then divide by the price and multiply by 100. A project you charge $1,000 for that costs you $650 has a $350 profit and a 35% margin.

Question 2

What's the difference between margin and markup?

Accepted Answer

Margin is profit as a percentage of your price; markup is profit as a percentage of your cost. A $650 cost sold for $1,000 is a 35% margin but a 54% markup. They describe the same dollars from different angles — quote on margin so you always know your real take.

Question 3

What is a good profit margin for an agency or service business?

Accepted Answer

Many healthy service businesses target a 20%–40% net margin on project work. Below 20% leaves little room for scope creep or slow months. The right number depends on your overhead — use a target margin to set your price rather than guessing.

Question 4

How do I price a project to hit a target margin?

Accepted Answer

Divide your cost by one minus the target margin. To hit a 30% margin on a $650 cost, charge $650 ÷ (1 − 0.30) = $928.57. The calculator above does this automatically when you enter a target margin.

Profit Margin Calculator

Margin is a pricing decision, not an afterthought

Common questions about margins

Protect your margin on every quote

Profit Margin Calculator

Margin is a pricing decision, not an afterthought

Common questions about margins

How do you calculate profit margin?+−

What's the difference between margin and markup?+−

What is a good profit margin for an agency or service business?+−

How do I price a project to hit a target margin?+−

Protect your margin on every quote