Profit First Calculator
This profit first calculator was developed for businesses that want to utilize the Profit First model created by Mike Michalowicz. It takes the current Profit first model and allows business owners to quickly identify the splits for their 10/25 rules.
To learn more about the profit first model and idea, check out Mike's book "Profit First". I recommend the audiobook as he goes into more detail and personal stories than what's covered in the printed edition.
This calculator doesn't track entries and all calculations are completed in your own browser.
To get started, just enter your top line revenue and your project's overhead.
If you're not sure what that means, check out Mike's quick reference FAQ.
Top Line Revenue Income Received
Project Overhead Materials and Subcontractors
Real Revenue Automatically Calculated
Frequently Asked Questions
Taken directly from Mike's PDF:
"Total Income is the top line revenue of a business. It represents all cumulative sales. Real Revenue is the Total Income minus the cost of materials and subcontractors. A business should only adjust to Real Revenue for Profit First purpose if a significant portion of the operations requires materials and subcontractors (typically more than 20% of Total Income). The rule of thumb is if you are a service based business with full time and part time employees do the Profit First process based on Total Income. If you are a manufacturer, retailer, restaurant or a service provider that delivers the significant portion of its services via subcontractors you need to do the Profit First Process based on Real Revenue. Please note that Real Revenue is similar to Gross Profit, but is not the same."
Our calculator is based on "Real Revenue".
We're not tax pros but if you're collecting VAT outside of the project costs then you'll manage that amount as it's own bucket while taxes that you pay on the project profit is placed in the tax account as Mike suggests in his book.