What does the calculator actually measure?
Contribution is revenue minus variable costs. It must still cover rent, subscriptions, other fixed costs and profit. It is not take-home pay or net profit. All monetary inputs and the discounted unit price are rounded to two decimals; totals multiply that rounded unit price.
- Contribution per unit = selling price − variable cost.
- Required units = original total contribution ÷ contribution per discounted unit, rounded up.
- Break-even discount = (original price − variable cost) ÷ original price × 100%. This is a theoretical boundary before cent rounding, not a safe commercial discount.
Three alternatives to an open-ended discount
- Reduce the scope: fewer revisions, a smaller deliverable or a longer lead time.
- Trade a lower unit price for a confirmed quantity, then check capacity and variable costs again.
- Offer clearly priced options so the customer can choose a smaller package.
Questions about discounts
Does a 10% discount always halve profit?
No. It halves contribution only when the original contribution is 20% of the selling price. The effect depends on your own costs, and fixed costs still have to be paid.
What if larger orders lower my unit cost?
Run a second scenario with the new variable cost. The volume calculation assumes that the cost entered stays the same for every unit; it does not predict bulk savings or extra staffing.
Can I use this for an hourly service?
Yes. Use your hourly selling price, variable cost per billable hour and expected billable hours. Capacity matters: needing twice as many hours may be impossible even if the arithmetic works.