Grounds ToolkitEstimating and Pricing
What Happens to Revenue and Margin at a Given Price Increase?
Enter current price, current cost, and a proposed increase percentage. This shows the new price, revenue gain, and margin change at fixed cost.
How this is calculated
Current margin comes from current price and cost (see Gross Margin and Markup). New price is current price times one plus the increase percentage. New margin recalculates the same way against the new price, cost held fixed.
Worked example
A $150 job costing $100 has a 33.3% margin. A 10% price increase raises price to $165, $15 more per job, and margin rises to 39.4%, a gain of 6.1 percentage points, all from cost staying the same while price rose.
Guide: The Pricing for Recurring Work Guide, what happens to margin if the price never moves at all.
Frequently asked questions
Does this tell me if customers will accept the increase?
No, this is pure math on revenue and margin, not a prediction about customer behavior. Whether a specific increase is acceptable to your customers is a judgment call this calculator does not make.
Why does margin rise even at a small price increase?
Margin is measured against price, so when cost stays fixed and price rises, the same dollar profit becomes a larger share of a bigger number, and the extra revenue on top is pure additional profit.
Does this assume cost stays exactly the same?
Yes, this isolates the effect of price alone. If cost is also changing, see Annual Price Increase Planner, which works from both cost changes and price together.
Can I use this for a decrease instead of an increase?
Yes, enter a negative percentage to see the revenue and margin impact of a price decrease the same way.