The Small Business Price Estimator calculates a selling price from unit cost and a target profit margin. It can also add a per-unit fee or handling allowance before applying the margin, making it suitable for products, billable service packages, and standardized jobs.
The estimator uses margin-based pricing, where target profit is measured as a percentage of the final selling price. This differs from simply adding the same percentage to cost. The calculated price is a starting point; customer demand, competitor positioning, taxes, channel fees, and price-ending conventions may require adjustment.
1. Enter the total cost directly tied to one unit, package, or standard job.
2. Add transaction fees, packaging, fulfillment, or other per-unit costs not included in base cost.
3. Enter the target profit margin as a percentage of selling price.
4. Use optional price uplift only when you deliberately want to increase the calculated price after margin pricing.
5. Review selling price, profit per unit, and equivalent markup before applying market or rounding adjustments.
The margin-based price is designed so profit before the optional uplift equals the selected percentage of that price.
An optional uplift changes the final realized margin unless it represents an amount passed through separately.
Given: Base cost of $42, additional cost of $6.50, and a 35% target margin.
Calculation: Total unit cost = $48.50. Price = $48.50 ÷ (1 − 0.35) = $74.6154, rounded to $74.62. Profit per unit = $74.62 − $48.50 = $26.12. Equivalent markup = $26.12 ÷ $48.50 × 100 ≈ 53.85%.
Result: A price of about $74.62 produces a 35% margin before any optional uplift.
That method calculates markup on cost. Margin pricing divides by one minus the margin because profit is measured against selling price.
Include a known fixed per-unit fee in additional cost. Percentage-based fees may require a more detailed price equation.
No. A 100% margin would require zero cost or an undefined infinite price under this model.
Sales tax is often added after the business sets its pre-tax selling price. Local rules and displayed-price practices vary.
Round upward when needed to preserve margin, then recalculate the realized margin using the actual price you plan to charge.