Profit Margin (Entrepreneurial Finances) - Definition, Examples, Advice | Bolder Money

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Definition

Calculating the percentage of money left after paying all the costs. A higher margin shows you keep more of your earnings with each sale.

What to consider

Compare both gross and net margins.
Adjust pricing based on cost changes.
Identify areas where expenses can be trimmed.

Real world scenarios

A diner calculates its profit margin by subtracting food and labor costs from daily sales.
A boutique in Chicago analyzes margins on each clothing item to decide on discontinuations.
An online seller reviews margins per product to determine if bulk buying can reduce costs.

Related terms

Entrepreneurial Finances

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