Key points
- Margin and markup are related, but they are not the same calculation.
- Break-even needs fixed costs, variable costs and contribution per sale.
- Cash runway depends on actual cash burn, not accounting profit alone.
Margin and markup use different bases
Markup is usually measured against cost. Margin is measured against selling price. If an item costs GBP 60 and sells for GBP 100, the markup is 66.67 percent and the margin is 40 percent. Confusing the two can lead to prices that look profitable on paper but do not cover the intended share of costs.
Break-even is about contribution
Break-even looks at how many units or customers are needed to cover fixed costs. The key input is contribution per sale: selling price minus variable cost. Once fixed costs are covered, additional contribution can move the business into profit, but only if the variable cost and price assumptions are realistic.
Cash runway is a separate question
A business can be profitable in a model but still run out of cash if payments arrive late, stock must be bought upfront or growth costs more than expected. Cash runway estimates how long available cash lasts at the current burn rate. It should be reviewed whenever spending or revenue changes materially.
Use the calculators together
Start with unit economics: price, cost, margin and markup. Then estimate break-even volume. Finally, compare the plan with available cash and expected customer value. This sequence keeps pricing, sales targets and cash planning connected rather than treating them as separate spreadsheets.
Related calculators
Put the guide into practice
Open the calculators that match this topic and test the numbers with your own inputs.