A few months ago, we talked about the importance of knowing profit margins for the jobs you do in our Finding More Work, Better Jobs, and Increased Profit post. Profit margins measure the amount of money out of each dollar earned that is actually profit, and they are a good indication of your business's overall health. Profit margins are also useful for service-based businesses because they can help compare the different types of services you offer and find the ones that bring in the most money as well as determine which services you may be undercharging for.
We initially created an online Profit Margin Calculator to help business owners calculate their profit margins without having to deal with the math themselves. We've now released a version of the calculator app for iPhones and other iOS devices. You can find it in the app store here or by searching the app store for 'profit margin calculator'. The new calculator is even easier to use, and you can quickly calculate profit margins from anywhere at any time right on your phone.
The new calculator app isn't restricted to just finding profit margins; there are also multiple new calculations you can make. For instance, say you have a job that you know generally costs $150 for supplies and labor. You can enter that into the Cost box, and as you make changes to Profit Margin or Total Profit, Gross Revenue (the total amount of money you charge a customer) will update to reflect those changes. This is helpful because you can use the calculated Gross Revenue total to help give you an idea of what you should charge a customer if you want to make a certain profit margin or total profit for the job.
The 'business' side of running a service business isn't always enjoyable or straightforward, but we think the new profit margin calculator will make the pricing aspect of it just a little bit less complicated, and we hope it will encourage small business owners to take a step back and re-examine their jobs and the prices they are charging.