Price your work. Understand your profit.
Build a complete cost estimate, test assumptions, and compare with what actually happens.
1. Build your monthly estimate
Fictional example in USD. Use one product or service unit and one month throughout. For services, a unit can be one completed job.
Overhead includes website fees, rent, licenses and other fixed costs. Materials and labor include waste; packaging is added only to sold units. Include your own labor. Exclude sales tax collected for government from revenue. This estimates operating profit before income tax, financing and unentered costs.
2. Understand the result
Each sale contributes $6.23 after variable costs toward $300.00 of monthly overhead. Sales above break-even begin to earn operating profit in this model.
- Revenue
- Price × units sold, before expenses.
- Profit
- Revenue minus all costs entered, including labor and overhead.
- Margin: 39.4%
- Profit divided by revenue.
- Markup on total modeled cost: 65.0%
- Profit divided by total modeled cost. This differs from markup on materials alone.
3. Compare prices and sales volumes
These are independent assumptions, not forecasts of customer demand. Changing price does not guarantee a particular sales volume.
| Price / sales | 150 units | 200 units | 250 units |
|---|---|---|---|
| $10.80 | $460 | $713 | $966 |
| $12.00 | $634 | $946 | $1,257 |
| $13.20 | $809 | $1,178 | $1,548 |
4. Save an estimate, then compare actual results
Save your plan before trading. At month end, enter your actual average price, sales and costs above, then compare with the saved estimate. Keep the same product and period. Saving again replaces the previous estimate.
Only Save writes your figures to this browser. Other users of this browser profile can access them. Entries are not uploaded. Review prices against actual customer response and update costs regularly.