Where Does Your Revenue Go? — See Every Pound Visualised
Most business owners know their revenue. Far fewer can say exactly where it goes. This interactive waterfall chart lets you enter your real numbers and watch revenue cascade through each cost category to reveal what is left as profit. The visual makes patterns obvious that spreadsheets hide.
How to use
Enter your annual revenue at the top, then fill in each cost category with your actual figures. The waterfall chart updates instantly, showing how revenue flows through costs to profit. The percentage labels show how much of each pound goes to each category. Adjust any number and see the effect immediately.
Understanding Your Revenue Waterfall
The waterfall chart shows your revenue at the left and your profit at the right, with each cost category eating into revenue along the way. The taller the cost block relative to the revenue bar, the more of your income it consumes. Healthy businesses typically retain 10-20% of revenue as net profit, though this varies significantly by industry.
Frequently Asked Questions
What is a good profit margin for a small business?
Net profit margins vary significantly by industry. Professional services typically achieve 15-25%, retail 2-10%, construction 5-15%, and hospitality 3-10%. The important thing is knowing your margin and tracking it over time. A declining margin is a warning sign regardless of the starting point.
What is the difference between gross margin and net margin?
Gross margin is revenue minus cost of sales (materials, direct labour). Net margin is revenue minus all costs including overheads, admin, marketing, and finance. Gross margin shows whether your pricing covers production costs. Net margin shows whether the business is actually profitable after everything is paid.
How can I improve my profit margin?
There are only two levers: increase revenue or reduce costs. On the revenue side, consider raising prices, upselling, or focusing on higher-margin products. On the cost side, review your largest categories first since small percentage savings on big numbers have the most impact. Most businesses have more room to cut costs than they realise.
Why is my profit margin lower than I expected?
The most common reasons are: underpricing (not accounting for all costs when setting prices), cost creep (small increases across many categories that add up), and revenue mix (selling more low-margin products without realising it). This waterfall tool helps you see exactly which categories are consuming the most.
Should I include my own salary in costs?
Yes. If you are a sole trader, include a reasonable salary for yourself in the wages category. If you are a limited company director, include your actual salary and dividends. Without this, your profit figure is misleading because it includes money you need to live on.
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