Frequently Asked Questions
What is profit margin?+
Profit margin is profit divided by revenue times 100. A 20% margin means you keep Rs 20 for every Rs 100 in sales.
What is the difference between markup and margin?+
Markup is profit as a percentage of cost. Margin is profit as a percentage of revenue. A 25% markup equals a 20% margin.
What is a good profit margin for a small business?+
5-10% is average for retail. 15-20% is good for services. Software and digital products can achieve 50-80% margins. Margins vary widely by industry.
What is the break-even point?+
Break-even is when total revenue equals total costs — zero profit or loss. Calculate it to know the minimum sales needed to avoid loss.
How do I increase profit margin?+
Increase prices, reduce costs, improve efficiency, eliminate low-margin products, and focus on high-value customers and products.