Guide
Know your numbers: margin, markup, and breakeven
Learn the three numbers that tell you whether the business is actually working.
Understand margin
Margin is the percentage of your sale price that's profit after costs. It tells you how much of every dollar coming in you actually keep.
Understand markup
Markup is how much you add on top of your cost to set the price. Margin and markup sound similar but produce very different numbers, know which one you're using.
Calculate your breakeven point
Work out how many units or how much revenue you need each month just to cover fixed costs. Everything after that point is real profit.
Recalculate whenever costs change
A supplier price increase or a new fixed cost shifts your breakeven point. Treat these numbers as living, not something you calculate once and forget.
That’s the whole thing.
Keep going
What to read next
- 01
Pricing & Profitability
Price your product or service properly
Set a price that reflects your costs and value, not just a guess at what feels fair.
- 02
Pricing & Profitability
Raise your prices without losing customers
Increase prices confidently, with a process that keeps most customers on board.
- 03
Pricing & Profitability
Spot which products or services are actually making money
Look past total revenue to find out what's genuinely profitable, and what's quietly costing you.