The Small Business Profit Estimator calculates operating profit from sales revenue and the main costs required to run a business. It separates cost of goods sold, payroll, occupancy, marketing, and other operating expenses so owners can see which cost groups have the greatest effect on the bottom line.
Use the estimate for a month, quarter, or year as long as every input covers the same period. The result can support budgeting, scenario planning, pricing discussions, and comparisons between actual performance and a target plan. It is an operating estimate before income taxes, financing costs, and owner distributions unless those amounts are entered as other operating expenses.
1. Choose one reporting period and use it for every entry.
2. Enter gross sales revenue before subtracting operating expenses.
3. Add direct product or service costs as cost of goods sold.
4. Enter payroll, rent, marketing, and any remaining operating expenses.
5. Review estimated profit, total costs, and profit margin; then change assumptions to test another scenario.
A positive result means revenue exceeds the operating costs entered. A negative result indicates an operating loss for the selected period.
This estimate excludes taxes, interest, depreciation, and owner distributions unless you include them in other operating expenses.
Given: Revenue of $75,000; COGS of $28,000; payroll of $18,000; occupancy of $6,000; marketing of $3,500; other expenses of $4,500.
Calculation: Total costs = $28,000 + $18,000 + $6,000 + $3,500 + $4,500 = $60,000. Profit = $75,000 − $60,000 = $15,000. Margin = $15,000 ÷ $75,000 × 100 = 20%.
Result: Estimated operating profit is $15,000, equal to a 20% operating margin.
Usually no. Use net sales that belong to the business and exclude sales tax collected for a government authority.
Include costs directly tied to producing or purchasing what was sold, such as merchandise, materials, and direct production labor when applicable.
Yes. Enter direct service-delivery costs as COGS, or leave that field at zero when all labor is treated as payroll.
Profit uses revenue and expense recognition, while cash flow also reflects payment timing, loan activity, inventory purchases, and owner withdrawals.
It is an operating profit estimate based on the fields provided, not necessarily accounting net income after interest, taxes, and non-operating items.