Small business
numbers: the
complete guide
Three numbers every small business owner should track are their break-even point (how much you need to sell before covering costs), cash runway (how many months of cash you have left at current burn rate), and the difference between margin and markup, which are easy to confuse and can lead to under-pricing if mixed up.
Running the numbers properly is what separates a business that sees problems coming from one that gets surprised by them. This guide covers the core calculations every small business owner should understand, plus two tax topics that sit alongside them: Scottish income tax and accountant pricing.
Break-even: your most basic survival number
Break-even point tells you exactly how many sales you need before you start making money, using fixed costs divided by your contribution margin per sale. See our break-even analysis guide and free calculator.
Cash runway: how long you can survive
Separate from profit, cash runway tells you how many months you can operate at your current burn rate before running out of money, a profitable business can still run out of cash if customers pay slowly. See our cash runway guide.
Margin vs markup: the confusion that costs money
Margin and markup are calculated from the same two numbers but produce very different percentages, mixing them up in a pricing formula leads to systematic under-pricing. See our margin vs markup guide for the conversion formula.
Scottish income tax, if it applies to you
Scotland uses its own six-band income tax system, separate from the rest of the UK, which affects take-home pay calculations for Scottish taxpayers. See our Scottish income tax rates guide.
Choosing an accountant: fixed fee or hourly?
How your accountant charges changes the incentives at play, fixed fee and hourly billing create genuinely different relationships. See our fixed fee vs hourly guide and our complete list of sole trader allowable expenses while you're getting your numbers in order.
In this guide
Break-even analysis
The formula and how to calculate it.
Cash runway explained
How long can your business survive?
Margin vs markup
What's the difference, and how to convert between them.
Scottish income tax rates 2026/27
The six-band system, explained.
Fixed fee vs hourly accountant
Why it matters when choosing who does your books.
Allowable expenses for sole traders
The complete list of what you can claim.
Frequently asked questions
What is the break-even point formula?
Fixed costs divided by (selling price per unit minus variable cost per unit), which tells you how many units you need to sell before covering all your costs.
Why does cash runway matter for a profitable business?
Profit on paper and cash in the bank aren't the same thing, a profitable business with slow-paying customers can still run out of cash, so runway tracks actual survival time rather than accounting profit.
What's the difference between margin and markup?
Margin is profit as a percentage of selling price, markup is profit as a percentage of cost, the same profit amount produces two different percentages depending on which base you use.
Does Scotland have different income tax rates?
Yes, Scotland uses its own six-band income tax system for non-savings, non-dividend income, separate from the rest of the UK, though dividend tax stays the same UK-wide.
Get your business numbers properly tracked
Book a free consultation and we'll help you get on top of your break-even, runway and pricing.