Discount impact calculator
Knock a percentage off price — see exactly how much extra volume it takes to stand still on total profit.
Your margin & discount
Revenue left after materials and direct costs.
Knocked off the price to win the job.
Extra volume needed to stand still
— you'd need 33% more volume to stand still on profit.
Break-even maths, not a recommendation. Assumes fixed costs don't change with volume — extra jobs that need extra overhead change the sum.
Knocking 10% off a quote to win the job feels like it costs 10% of the sale. It doesn't — it comes straight off the profit margin, which is usually a much smaller slice of the price than the whole thing, so the same discount eats a far bigger share of what's actually left over once materials and costs are covered.
Why discount doesn't come off the top
If a job is priced at £1,000 with a 40% gross margin, £400 of that is profit and £600 covers materials and direct costs. A 10% discount takes £100 off the price — but that £100 comes entirely out of the £400 profit, not spread proportionally across the whole job. Profit drops from £400 to £300, a 25% cut in profit from a 10% cut in price. To land the same total profit at the discounted price, more jobs — more volume — have to be sold to make up the difference.
A worked example
At a 40% margin, a 10% discount needs roughly 33% more volume just to stand still on total profit — ten jobs a month become thirteen-and-a-third. At a thinner 15% margin, that same 10% discount needs a 200% volume increase — three times the jobs — to break even, because there's so much less margin for the discount to eat into. And if the margin is 10% or less, a 10% discount wipes out profit entirely or pushes the job into a loss, and no amount of extra volume fixes that.
What this isn't
This assumes fixed costs don't change with volume, which holds roughly true for materials-driven trade work but breaks down if extra volume means new overheads — another van, another hire. It's also a break-even calculation, not a recommendation: winning more work at a discount can still be the right call for cash flow or keeping a team busy, even when it takes more volume to match the profit that wasn't discounted. It also treats one discount rate as applying evenly across every job, when in practice a discount agreed on one big contract might not be the same figure offered to a one-off domestic customer — run the numbers separately for each if the discount policy varies by job type.
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