FounderMage

Revenue & growth

Revenue Target Calculator

Convert a profit goal and contribution margin into the revenue that would produce that profit under those assumptions.

Decision: How much revenue do I need to hit this profit target?

This tool runs in your browser. FounderMage does not send the numbers you enter to our servers.

Result

  • Required revenue

    Required revenue: $45,000.00

    Required revenue of $45,000.00 is gross sales, not net profit and not cash flow. At 40% contribution margin it produces $18,000.00 of contribution, which equals fixed costs plus target profit ($12,000.00 + $6,000.00 = $18,000.00). No tax is calculated. This is not a forecast that the business will reach this revenue.

  • Contribution needed

    Contribution needed: $18,000.00

  • Contribution recovered from gross revenue

    Contribution recovered from gross revenue: $18,000.00

How to read the result

The revenue figure is the sales volume that matches the margin and profit you typed. It is not a forecast that you will reach it.

Calculated facts

Totals and thresholds come only from the values on this page. They describe the math, not what you should do.

Still a judgment call

Risk, timing, customers, and judgment stay outside the calculator. A stronger number can still be the wrong path.

Methodology

Contribution needed is fixed costs plus target profit. Required revenue is contribution needed ÷ (margin ÷ 100) when margin is positive.

Assumptions

  • Contribution margin stays constant across the revenue you calculate.
  • No taxes unless included in fixed costs.

Examples

40% margin

$12,000 fixed costs and $6,000 profit at 40% contribution margin requires $45,000 revenue.

How to use this tool

  1. Enter fixed costs, target profit, and contribution margin percent.
  2. Read required revenue and the contribution dollars needed.

Limitations

  • Mix shifts that change margin are not modeled.
  • Not financial advice.

Questions

What is contribution margin here?
The percent of each revenue dollar left after variable costs. Enter it as a percent, not a dollar.
Why is revenue blank at 0% margin?
If nothing is left after variable costs, no amount of revenue covers fixed costs or profit.

Related decisions

Revenue Target Calculator — Profit Goal