The small business profitability simulator projects month-by-month financials from your startup investment through profitability and investment payback. Enter your startup costs, revenue, growth rate, and cost structure to see exactly when your business breaks even, when it repays your initial investment, and what year-5 profit margins look like.
Business Financial Parameters
Rent, salaries, insurance, utilities
0 = no employees
Revenue Breakdown & Cumulative P&L
Month-by-Month P&L
| Month | Revenue | Profit |
|---|
How to Use the Small Business Profitability Simulator
Starting a small business requires upfront capital before revenue arrives, then a period of losses while the business builds scale. The small business profitability simulator models this entire arc — from initial investment through monthly break-even, investment payback, and sustainable profit margins — month by month for up to 10 years.
Step 1: Enter Startup Costs and Starting Revenue
Startup costs are your initial capital outlay: equipment, inventory, licenses, website, branding, and initial operating capital. Starting monthly revenue is your realistic month-1 sales projection (often $0 for pre-launch businesses). The simulator separately tracks when monthly operations break even vs when the total startup investment is repaid.
Step 2: Set COGS and Overhead Accurately
COGS (Cost of Goods Sold) scales with revenue — it's what you pay to deliver each sale. For product businesses, this includes materials, manufacturing, and shipping. For service businesses, it's direct labor. Fixed overhead (rent, salaries, insurance) stays flat until you hire additional staff. Use industry benchmarks: retail typically runs 50-60% COGS, while SaaS or consulting runs 15-30%.
Step 3: Model Employee Growth
The employee growth plan adds headcount at regular intervals — for example, "add 1 employee every 18 months at $55,000/year." This captures the real cost step-ups that happen as businesses scale. Without this, projections can be overly optimistic in years 3-5 when founders typically need to hire. Each new employee adds their monthly salary to the overhead line.
Step 4: Add Business Loan Details
If you're financing startup costs with an SBA loan or business line of credit, enter the principal, annual interest rate, and term. The simulator calculates the exact monthly payment using standard amortization and deducts it from monthly cash flow. This shows the true cost of debt financing and its effect on profitability timeline.
Reading the Key Milestones
"Monthly break-even" is when monthly revenue covers all monthly costs — your first cash-flow positive month. "Investment payback" is when cumulative profits repay your entire startup investment — the real measure of business success. A business that breaks even monthly in month 8 might not repay a $100,000 investment until month 36. Both milestones matter, and this tool shows both.
FAQ
Is this small business profitability simulator free?
Yes, completely free with no signup required. All calculations run in your browser — your business data is never sent to any server.
What does 'monthly break-even' mean in this tool?
Monthly break-even is the month when monthly revenue first exceeds all monthly costs (COGS + overhead + marketing + loan payments). Before this month, the business loses money every month. After it, the business generates a monthly operating profit.
What does 'investment payback' mean?
Investment payback is when cumulative profits equal your initial startup costs. If you invested $50,000 to start, the payback month is when the running total of all monthly profits adds up to $50,000. This is different from monthly break-even — a business can be monthly profitable before the startup investment is recovered.
How should I estimate my COGS percentage?
COGS (Cost of Goods Sold) varies widely: retail/e-commerce typically 50-70%, restaurants 28-35%, SaaS software 15-25%, service businesses 20-40%. If you're unsure, use your industry's gross margin benchmark from IBISWorld or similar sources and subtract from 100% to get COGS %.
How does the employee growth plan work?
You specify 'add 1 employee every N months' and their annual salary. The simulator adds one employee headcount at the specified interval, increasing fixed overhead by their monthly salary. This models the realistic cost step-ups that happen as a business scales beyond the founder.
What is a realistic revenue growth rate for a small business?
Early-stage businesses (year 1-3) with active marketing often grow 5-15% monthly. Mature small businesses (year 3+) typically grow 10-30% annually (0.8-2.3% monthly). Service businesses often grow slower than product businesses. Use 5% monthly for a conservative model, 10% for optimistic early-stage growth.
Can I export the financial projections?
Yes, click Download CSV to get the full month-by-month table with revenue, COGS, overhead, marketing, loan payments, monthly profit, and cumulative P&L.