Target Profit Calculator

Units and revenue needed to hit a profit goal.

Calculate the sales volume and revenue required to reach a target profit, treating the goal as a cost to be covered.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Currency

Fixed costs

Target profit

Price per unit

Variable cost per unit

Tax rate (if target is after tax)

Units needed

375

$15,000 of revenue

Pre-tax profit required$2,000

Contribution per unit$16.00

Break-even units alone250

Extra units for the target125

How the Target Profit Calculator works

Target profit analysis is break-even with the goal added to fixed costs. Treating the profit you want as a cost you must cover turns a vague ambition into a specific number of units, which is far easier to plan against.

Also known as: sales needed for target profit · profit goal calculator · units to hit profit target

The calculation itself

Units needed for a target profit is (fixed costs + target profit) ÷ contribution per unit. In revenue terms it is (fixed costs + target profit) ÷ contribution margin ratio.

The target profit sits alongside fixed costs in the numerator because both have to be covered by contribution before the goal is met. Treating profit as something left over rather than as a cost to be covered is the difference between a business that hits its targets and one that hopes to.

The same thing with real figures

Fixed costs $38,000, target profit $15,000, contribution per unit $15.48. Units required: (38,000 + 15,000) ÷ 15.48 = 3,424 units, against a break-even of 2,455.

So the profit target requires 969 units beyond break-even, a 39% increase on the break-even volume for a profit that is 39% of fixed costs. The proportionality is exact and it makes the target concrete: not a hope, but 969 specific additional sales.

If the target is pre-tax and you want $15,000 after tax at a 20% rate, the numerator becomes 38,000 + 18,750 and the requirement rises to 3,666 units.

The catch

It assumes contribution per unit holds at the higher volume. Reaching it may require discounting, paying more for advertising as the cheapest audience is exhausted, or adding a shift, all of which lower contribution and raise the requirement above what the calculation shows.

Tax is also frequently omitted. A target stated as take-home profit needs grossing up before it enters the numerator, and a business planning against the after-tax figure will finish the year short by the tax.

Applying it

Convert it into a monthly and weekly run rate. Three thousand four hundred units a year is 285 a month or 66 a week, and a weekly number is something the business can actually steer by.

Then test whether the volume is plausible before committing to the target. If the required increase is 39% and the business has never grown faster than 15%, the target is a wish. Better to discover that in January than in October.

Adjusting the levers rather than the volume

When the required volume is implausible, the other terms are available. Raising the price lifts contribution per unit, which lowers the requirement more than proportionally: an 8% price rise on the example takes contribution from $15.48 to $19.08 and drops the requirement from 3,424 units to 2,778.

Cutting fixed costs works directly: $5,000 less in the numerator removes 323 units from the target. Cutting variable cost works through contribution, so a $2 reduction removes 391 units.

In most businesses the price lever is the largest and the least used, because it feels riskier than it usually is. A useful discipline is to run the calculation at the current price and at a modestly higher one, and see how much volume risk the price rise removes. Frequently the higher price is the less risky plan.

It is worth running the calculation against a pessimistic contribution figure as well as the current one. If the required volume only works at today's contribution and fails at contribution five percent lower, the target is fragile, and contribution five percent lower is a routine outcome of a supplier price rise or a slightly worse advertising quarter.

A target that survives that stress test is a plan. One that does not is a forecast with a single point of failure, and knowing which you have before the year starts is worth the extra five minutes.

Where to go next

The Target Profit question rarely arrives on its own. These are the ones that usually come with it:

Break-Even Point Calculator — Units needed to cover every fixed cost.
Profit Goal Calculator — Tax comes off the profit.
Desired Margin Price Calculator — The price that delivers the margin you want.
Etsy Fee Calculator — Every Etsy fee on one sale, itemised.

Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.

Frequently asked questions

How do I calculate sales needed for a target profit?

(Fixed costs + target profit) ÷ contribution margin per unit. With £4,000 of fixed costs, a £2,000 profit goal and £16 contribution, you need 375 units.

How do I handle tax in a profit target?

If the target is after tax, gross it up first: required pre-tax profit = target ÷ (1 − tax rate). A £2,000 after-tax goal at 25% tax needs £2,667 pre-tax.

What if the required volume is unrealistic?

Then the target cannot be reached by selling more, and one of the inputs has to change: raise price, cut variable cost, or reduce fixed costs. Discovering this in a calculator is considerably cheaper than discovering it in a quarter.

Is it better to raise price or sell more?

Usually price, because it flows entirely into contribution while volume brings proportional variable costs with it. A 10% price rise on a 40% margin adds far more profit than a 10% volume rise, and requires no extra work.