Deal Profitability Calculator
Evaluates the true profitability of individual deals by accounting for all costs: COGS, sales costs, delivery, and overhead allocation. Prevents reps from closing high-revenue but low-margin or loss-making deals.
Sales - Deal Profitability Calculator.xlsx
Excel (.xlsx) — No macros — Works in Excel, Google Sheets, LibreOffice
What This Spreadsheet Solves
- Reps closing large deals that turn out to be unprofitable after costs
- No deal-level visibility into margins before signing the contract
- Difficulty factoring in custom delivery, discounts, and non-standard terms
- Lack of a minimum margin threshold to guide deal negotiation
- Revenue recognition that masks per-deal profitability problems
Who This Is For
- Sales reps evaluating deal terms before proposing
- Sales managers approving discounts and custom terms
- Finance teams reviewing deal profitability post-close
- Account executives negotiating enterprise contracts
Inputs
- $Deal Revenue
- $COGS / Direct Cost
- $Sales Cost (commission + time)
- $Delivery / Fulfillment Cost
- %Discount Given
- #Contract Length (months)
Outputs
- Net Deal Revenue (after discount)
- Total Deal Cost
- Deal Gross Margin
- Deal Gross Margin %
- Deal Net Profit
- Profit per Month
How Calculations Work
Net revenue is deal revenue minus the discount. Total cost sums COGS, sales cost, and delivery cost. Gross margin is net revenue minus total cost. Margin percentage is gross margin divided by net revenue. Profit per month divides gross margin by contract length to normalize deals of different durations. A minimum margin threshold from CONFIG flags deals that fall below acceptable profitability.
Example Use Case
Scenario: Enterprise deal: $120K annual contract, $45K COGS, $15K sales cost, $10K delivery, 10% discount, 12-month contract.
Result: Net revenue: $108K. Total cost: $70K. Gross margin: $38K (35.2%). Profit per month: $3.2K. Above the 25% minimum threshold configured for enterprise deals.
What You Get — 5 Sheets
Technical Details
Frequently Asked Questions
What costs should I include in sales cost?
Commission paid on the deal plus the fully loaded cost of rep time spent. For a rough estimate, use commission plus (hours spent x hourly cost of the rep).
How do I handle multi-year contracts?
Enter total contract value and total contract length. The model normalizes to profit per month for comparison across different durations.
What is a reasonable minimum margin threshold?
It depends on your business. SaaS companies often target 70%+ gross margin. Services businesses target 30-50%. Set a threshold that covers your overhead and desired profit.
Should I include overhead allocation per deal?
Optional. If you want true net margin, allocate a share of overhead per deal in CONFIG. Otherwise, the model shows gross deal margin which is still useful for comparing deals.
Can I use this before proposing terms to the customer?
Yes. Enter the proposed terms and review the margin. Adjust pricing or scope before sending the proposal.
Download Deal Profitability Calculator
Ready to use immediately. Enter your data in the INPUT sheet, see results in OUTPUT.