Question 1

What is the difference between markup and margin?

Accepted Answer

Markup is calculated as (Price − Cost) ÷ Cost × 100. Margin is calculated as (Price − Cost) ÷ Price × 100. A 50% markup results in a 33.3% margin. Margin is based on selling price; markup is based on cost.

Question 2

What is a good profit margin for a small business?

Accepted Answer

Healthy profit margins vary by industry. Service businesses typically target 15–30%+ net margins. Retail businesses often work with 5–15% net margins due to higher COGS. Knowing your industry benchmark helps you price competitively while staying profitable.

Question 3

How do I price my services as a Canadian small business?

Accepted Answer

Start with your fully loaded cost (labour, overhead, materials), add your target margin, then sanity-check against market rates. Ensure the price covers taxes (HST where applicable), CPP/EI on self-employment income, and a buffer for slow months.

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