Calculate profit margin, markup, and compare to industry benchmarks instantly.
Profit margin measures how much of every dollar of revenue a business keeps as profit after paying costs. It is expressed as a percentage and is one of the most important indicators of financial health for any small business, whether you run a restaurant, retail store, or beauty salon.
There are two common types of profit margin:
This calculator focuses on gross profit margin, which tells you how efficiently you price your products relative to their direct costs.
Margin and markup both measure the relationship between cost and selling price, but they use different bases. Margin is profit as a percentage of revenue, while markup is profit as a percentage of cost. A 50% markup is the same as a 33.3% margin.
Many business owners accidentally confuse the two, leading to under-pricing. For example, if a dish costs $7 to make and you apply a 30% markup, you sell it for $9.10 — but your margin is only 23.1%, not 30%. Always know which number you are working with.
| Industry | Gross Margin | Net Margin |
|---|---|---|
| Full-service restaurant | 55 – 65% | 3 – 9% |
| Quick-service restaurant | 60 – 70% | 6 – 9% |
| Retail (general) | 25 – 50% | 2 – 5% |
| Beauty salon / Spa | 40 – 60% | 8 – 15% |
| Grocery store | 25 – 35% | 1 – 3% |
If your margins are below these benchmarks, consider raising prices, renegotiating supplier costs, reducing waste, or adopting technology that cuts labor. A modern POS system like KwickOS can reduce ordering errors, speed up table turns, and automate inventory — all of which directly improve your bottom line.