Running a small business means constantly making pricing and financial decisions — often without a finance background. Here are the core calculations that matter most.
Break-Even Point
Formula: Fixed Costs ÷ (Selling Price per Unit − Variable Cost per Unit). This tells you exactly how many units you need to sell before you start making a real profit — essential before launching any product or service.
Return on Investment (ROI)
Formula: (Net Profit ÷ Cost of Investment) × 100. Use this to compare whether a marketing campaign, new equipment, or business expansion actually paid off relative to what it cost.
Markup and Margin
As covered in our dedicated article, these are easy to confuse but critical to get right — markup is profit over cost, margin is profit over selling price.
Discount Pricing
Formula: Original Price × (1 − Discount% ÷ 100). A common mistake is applying discounts sequentially without realizing stacked discounts compound — a 20% then 10% discount is not a 30% total discount, it's actually 28%.
Sales Tax / VAT Addition
Formula: Price × (1 + Tax Rate ÷ 100). Always confirm whether quoted prices are tax-inclusive or exclusive before presenting a quote to a client — this single detail causes more client disputes than almost anything else in pricing.
Why Doing This By Hand Is Risky
A single formula error, especially in markup vs margin or compounding discounts, can silently erode profitability across hundreds of transactions before anyone notices.
One Tool, All Calculations
Our Business Calculator Suite covers margin, markup, discounts, sales tax, ROI, and break-even in a single place.