Business Finance Calculators

It varies enormously by sector — grocery retail operates on net margins of 1–3% while software can exceed 20%. Comparing against your own trend and your direct competitors is far more useful than any cross-industry benchmark. Gross margin is the more comparable figure for judging whether a product itself works.

Profit records a sale when invoiced; cash arrives when the customer pays. Growing businesses commonly fund inventory and receivables ahead of collection, so faster growth consumes more cash. Add capital expenditure and loan principal — neither of which appears on the income statement — and a profitable business can run dry.

3:1 is the widely used benchmark — each customer should return three times what they cost to acquire. Below that, acquisition spend usually can't scale profitably. Well above 5:1 can mean you're under-investing in growth. Payback period matters alongside the ratio, since a good ratio with a 24-month payback still strains cash.

Typically 25–40% above base. Employer payroll taxes (FICA at 7.65%, plus federal and state unemployment), health insurance, retirement matching, equipment, software licences, and workspace all add up. The employee cost calculator itemises these so you can budget a hire realistically.