22 calculators
Calculators for running the business
Each calculator works on figures you type in, and nothing you enter leaves the page. They are grouped by the decision they help with.
Want a rough read of your business instead? Try a two-minute check.
Buying or selling a business? The deal tools are on their own page.
Selling a small business? See what small businesses sold for through a broker.
Official and public-record figures by industry sit beside the calculators, on the business data page.
Each calculator answers one question. A check looks at the whole of one area, in about ten minutes.
See all checksPricing and margin
Calculator
How much volume can a 5% price rise afford to lose?
The breakeven volume for any price change, from your contribution margin. How much volume a rise can lose, or a cut must win, before profit stands still.
You can lose 14.3% of volume before the rise stops paying.
Most businesses overestimate how much volume a rise costs. That gap is the money.
What a price change needs from volume
Calculator
What is 1% of price worth against 1% of volume or cost?
What a 1% improvement in each lever does to your operating profit. One of these bars is not like the others.
On your numbers, 1% of price is worth 13% of this year's profit.
Assumes volume holds when price moves 1%, which is what the full check's elasticity questions test.
Calculator
How much of a price rise do you bank?
The rise your cost increase needs, and how much of an announced rise reaches the year's revenue after exemptions, delay and give-backs. Nothing you enter leaves this page.
Make a price increase decision sheet. See the assumptions and print the result.
The formula. To hold margin dollars, price rises by the cost increase times cost's share of price. To hold the margin percentage, it rises by the full cost increase. What you bank is the announced rise, less the exempt revenue, less the months before it starts, less what is given back.
Goes with the pricing check.
Calculator
How much does your volume move when your price moves?
An estimate of your price elasticity from your own sales history, set against a competitor's price or the market's volume. It shows no figure when the history cannot support one. Nothing you enter leaves this page.
- Period.
- Months or weeks, oldest first, each the same length. Enter at least 24 months or 104 weeks. Leave out a period hit by a stock-out or a one-off order.
- Your volume.
- Units sold in each period, for one product or one range.
- Your price (A$).
- The average price customers paid in each period, after discounts. Not the list price.
- Competitor's price (A$).
- The nearest competitor's price for the same product in each period. Take it from customers, tenders and published lists. Never take it from a competitor.
Paste a block from a spreadsheet into any cell.
| Period | Your volume | Your price (A$) | Competitor's price (A$) |
|---|---|---|---|
What elasticity means for a price move
Elasticity is the percentage change in volume for a 1% change in price. At 0.5, a 1% rise loses about half a per cent of volume. At 2, it loses about 2%. It is measured against the price customers compare you with. This estimate describes your past. Customers, competitors and the season can each change it.
How it works, step by step on the example.
Goes with the pricing check.
Calculator
How much of your list price reaches the bank?
The pocket price on every $100 of list, after discounts, rebates, freight and the cost of your payment terms. Nothing you enter leaves this page.
Of every $100 of list price, you bank $80.42.
$7.58 of the $19.58 gap never shows on an invoice. The extra credit alone costs $0.58.
Calculator
What is your offer worth to the customer?
The most a customer could pay: the price of their best alternative, plus what your offer saves or adds, less their cost of switching. Nothing you enter leaves this page.
The ceiling is $59k, $5,000 above your price.
You keep 44% of the value your offer adds; the customer keeps the rest.
The formula. The ceiling is the alternative's price plus the value of the difference, less the cost of switching. The share you keep is your premium over the alternative divided by the value left after switching.
Goes with the pricing check.
Calculator
Do your discounts follow volume?
Each account's average discount against its sales, the straight line through them, and the discount above that line. Nothing you enter leaves this page.
$188k of discount is more than these accounts' sales explain.
Sales explain 24% of the spread in discounts. The most is at Account 3: $145k.
Bringing the accounts above the line back to it takes the average discount from 18.3% to 16.6%, before any volume it costs.
The formula. Fit a straight line through discount against sales by least squares. An account above the line gets more discount than its sales explain. The dollars at stake are that excess times the account's sales at list price, for accounts above the line only.
Goes with the pricing check.
Calculator
Did price, volume, mix or cost move your gross profit?
A walk from last year's gross profit to this year's, from three to ten product lines. Nothing you enter leaves this page.
Gross profit moved +$300k, and the largest part was price.
Volume is the change in units at this year's average profit a unit. Mix, price and unit cost are measured on last year's units. A new line counts in volume and mix.
The formula. Volume is the change in units at this year's average profit a unit. Mix is the shift between richer and poorer lines. Price and unit cost are each line's change a unit, on last year's units. The four add up to the change in gross profit. Without units, the walk has three parts: sales growth, mix and margin rate.
Goes with the pricing check.
Customers and trade spend
Calculator
Which customers lose you money once you serve them?
Each customer's gross profit less a rough cost to serve, ranked from most to least profitable. The running total rises, peaks and falls back. Nothing you enter leaves this page.
6 of 20 customers lose money once they are served. They give back $217k.
The top 10 customers make all of the $2.3m profit. The running total peaks at 109% of it.
A list of your largest customers leaves out the small accounts. Add them if you can.
The formula. Profit is revenue times gross margin, less orders times the cost of an order and deliveries times the cost of a delivery. Sort the customers by profit and add them up in turn. The profit given back is the peak of that running total less where it ends.
Goes with the pricing check and the sales check.
Calculator
Does your volume rebate buy volume, or pay for volume you had anyway?
The purchases at which a rebate pays for itself, set against what the customer would buy without it. Nothing you enter leaves this page.
The rebate pays for itself at $1.6m of purchases: $107k more than the customer buys anyway.
Once it is earned, $30k of the rebate is paid on purchases that were coming anyway.
At that level the rebate adds $26k.
What the rebate costs against what the extra volume earns
The formula. The rebate pays for itself where the extra margin equals the rebate paid. Paid on all purchases, that is margin times expected purchases, divided by margin less the rebate. Paid only above the start, take the rebate times the start off the top line first.
Goes with the pricing check.
Calculator
How many more units does a promotion need to pay?
The uplift a price promotion needs to break even, once the dip after it and its fixed costs are counted, and what it made or lost. Nothing you enter leaves this page.
For the weeks after, add up the shortfall below the usual weeks until sales are back to normal.
It needs 123% more units to break even. The discount alone needs 75%.
At 60% more units, the promotion loses $6,250 of margin against not running it.
What the promotion costs against what the uplift earns
The formula. The discount alone needs the discount divided by margin less the discount: at a 40% margin, a 20% discount needs twice the units. The dip adds the margin on the units lost afterwards, and fixed costs less supplier funding add their share.
Goes with the pricing check.
Calculator
How small can an order be before it loses money?
The smallest order whose margin pays for its own processing, picking and delivery. Nothing you enter leaves this page.
An order must be worth $357 to pay for itself.
$107 an order ÷ 30% margin. A $250 order earns $75 of margin and loses $32 once it is processed, picked and delivered.
Order costs take 43% of that order's value.
Calculator
What is one point less churn worth?
The margin kept when one point fewer customers stop buying each year, this year and over the years after, as the customers kept stay on. Nothing you enter leaves this page.
A customer who stops buying counts, whether or not they ever told you. Count those whose orders stopped in the last twelve months.
One point less churn is worth $25k of margin next year and $274k over 5 years.
Discounted at 10%, that is $198k. Churn takes $300k of margin a year now, and replacing those customers costs $150k.
A customer stays 8.3 years on average now, 9.1 with a point less churn. You would also need $12k a year less to win replacements; that is a separate saving, not more margin.
The formula. A customer's margin is revenue times gross margin. With churn c, a book of customers keeps (1 − c) of itself each year. One point less churn keeps the difference between the two, year after year, each earning its margin. A customer stays 1 ÷ c years on average.
Goes with the sales check, and with Customers on the map, which has a waitlist.
Strategy, people and change
Calculator
Where does the current course land you in five years?
The momentum case: what happens to profit if nothing changes. Most strategy urgency starts with this one chart.
Take the trend from the last three years' actuals. Leave the budget out of it.
EBIT by year, $m
On current course, profit is 35% lower in five years.
Drift is quiet. Nobody announces it. The momentum case is how you make it loud.
Calculator
How many reps does your call plan need?
The number of salespeople your accounts need, beside the number you have. From how often each tier should be called, and how many calls one rep can make in a year. Nothing you enter leaves this page.
Your call plan needs 8 reps.
5,760 calls a year ÷ 800 calls per rep = 7.2 reps. That is 2 more than the 6 you have.
The team you have can make 83% of the calls the plan asks for.
Reps you have against reps the workload needs
Calculator
How many layers sit between you and your customers?
The layers from the top to the front line, and the span at each, from a headcount per layer. It flags any layer where managers manage fewer than two people. Nothing you enter leaves this page.
Top of the business first. The last layer is the people who deal with customers.
- Layer 1span 6
- Layer 2span 4
- Layer 3span 2.5
- Layer 4span 5
- Layer 5customer-facing
5 layers from the top to the customer, a median span of 4.5.
The span is the people in the layer below divided by the people in the layer above.
Calculator
What does your bonus plan pay at 99% of target?
The payout line of a bonus or commission plan from 80% to 130% of target, with its steps marked, and what the plan costs. Nothing you enter leaves this page.
Payout, % of target bonus, at each % of target
At 100% of target the plan pays $200k a year.
It takes $667k of sales at 30% margin to pay for it. The margin on the sales above the threshold is $600k. The cost assumes everyone finishes at the same level.
- A rep at 89% of target earns nothing. At 90% they earn 50% of their target bonus.
- Between 90% and 100%, each point of target is worth 5 points of bonus.
- Past 120% of target, more sales earn nothing more.
The formula. Nothing is paid below the threshold. From the threshold the payout runs in a straight line to the target payout at 100%, then on to the cap, and stays flat above it. The plan's cost is headcount times target bonus times the payout. The sales that pay for it are that cost divided by your gross margin.
Goes with the KPIs and incentives check.
Calculator
What does a week of delay cost your programme?
The annual value the programme is meant to deliver, divided by fifty-two: what every week of slipped start, deferred decision or late appointment forgoes. Nothing you enter leaves this page.
Every week late costs about $385k.
8 weeks late is $3.1m of benefit that does not come back.
What the delay costs against the yearly benefit
Calculator
Does the business case still pay back after a haircut?
Payback, NPV and IRR of a change, as written and after counting less of each benefit, with revenue benefits cut harder than cost savings. Nothing you enter leaves this page.
| Measure | As written | After your cut |
|---|---|---|
| Net benefit a year | $410k | $310k |
| Payback | 2 years | 2.6 years |
| NPV at 10% | $754k | $375k |
| IRR | 43% | 27% |
After your cut, it pays back in 2.6 years, against 2 as written.
Payback is undiscounted. NPV counts each year's benefit at the end of the year. Pair it with the cost of a week's delay above: a late start moves every year along.
Net benefit a year, as written and after your cut
The formula. Net benefit a year is cost savings and extra margin from revenue, each times the share you count, less running costs. Payback is the upfront cost divided by that. NPV discounts each year's benefit at your rate, less the upfront cost. IRR is the rate at which NPV is zero.
Goes with the transformation check.
Cash and capacity
Calculator
What is one day of working capital worth?
Unbilled days plus debtor days plus stock days less creditor days, and the cash each day ties up. Nothing you enter leaves this page.
Take the days from the average through the year. The month-end figure flatters. A service business that bills after the work is done adds its unbilled days.
Your cash conversion cycle is 80 days.
Debtors $6m + stock $4.3m − creditors $2.5m = $7.8m of cash tied up.
One day off debtor days releases $110k. One day off stock days releases $71k. At 10% a year, the cash tied up costs $781k a year.
Calculator
What does an early-payment discount really cost?
The annual rate a discount for paying early is worth, set against the cost of funds, for the customer who takes it and the business that offers it. Nothing you enter leaves this page.
The discount is worth 24.2% a year to the customer who takes it.
A buyer paying 9% for its money gains by paying early. A seller paying 9% gives away more than the cash is worth to it.
At 9% a year, paying 23 days early is worth 0.56%. Compounded, the discount's rate is 27.1% a year.
The discount's yearly cost against your cost of funds
The formula. The discount divided by the price left after it, times 365, divided by the days between the discount date and the due date. A buyer gains by taking it when that rate is above its cost of funds. A seller gains by offering it only when the rate is below its own.
Goes with the pricing check, and with Finance on the map, which has a waitlist.
See how fast large businesses pay small suppliers, by industry.
Calculator
What does your idle capacity cost?
How much of the plant you use, the fixed cost each unit carries, the fixed cost of the idle part, and what one more point of utilisation earns. Nothing you enter leaves this page.
Nameplate and practical capacity give different answers. Say which you used: practical capacity allows for changeovers, maintenance and a normal shift pattern.
The plant runs at 72%. Its idle capacity carries $1.7m of fixed cost a year.
Fixed cost is $167 a unit at this volume and would be $120 at full capacity. The plant covers its fixed cost at 25,000 units, 50% of capacity.
One more point of utilisation, sold at this price, earns $120k a year. Volume sold near its variable cost fills the plant without earning much of that.
The formula. Utilisation is units made divided by capacity. Fixed cost a unit is fixed cost divided by units made. The idle part carries fixed cost times the share of capacity unused. One more point of utilisation earns a hundredth of capacity times price less variable cost.
Goes with Operations on the map, which has a waitlist.
Figures are estimates, not advice. The full checks are on the map.