How To Calculate Recurring Margin in SharpSpring | Arithmix

Learn how to calculate recurring margin in SharpSpring with our step-by-step guide. Increase your profitability and gain a better understanding of your business's financial health. Start optimizing your revenue today.

Calculating recurring margin is an important aspect of any business that offers recurring services or products. It helps you understand the profitability of your business and make informed decisions about pricing and expenses. In this article, we will discuss what recurring margin is, when it is valuable to calculate it, and how to calculate it.

What Is Recurring Margin?

Recurring margin is the profit margin that a business earns from its recurring revenue. Recurring revenue is the revenue that a business generates from customers who subscribe to its services or products on a regular basis. Examples of businesses that generate recurring revenue include subscription-based businesses, software as a service (SaaS) companies, and membership-based businesses.

Calculating recurring margin is important because it helps you understand the profitability of your business. It takes into account the recurring revenue that your business generates and subtracts the recurring expenses that your business incurs. The result is the recurring margin, which is the profit that your business earns from its recurring revenue.

When Is It Valuable To Calculate Recurring Margin?

Calculating recurring margin is also valuable when you are considering offering new services or products. By calculating the recurring margin of your existing services or products, you can determine whether it is profitable to offer new services or products. This information can help you make informed decisions about the growth of your business.

How To Calculate Recurring Margin

To calculate recurring margin, you need to know your recurring revenue and your recurring expenses. Recurring revenue is the revenue that your business generates from customers who subscribe to your services or products on a regular basis. Recurring expenses are the expenses that your business incurs on a regular basis to provide those services or products.

To calculate recurring margin, subtract your recurring expenses from your recurring revenue. Then, divide the result by your recurring revenue and multiply by 100 to get the recurring margin percentage. For example, if your recurring revenue is \$10,000 and your recurring expenses are \$5,000, then your recurring margin is (\$10,000 - \$5,000) / \$10,000 x 100 = 50%.

Calculating recurring margin is an important aspect of understanding the profitability of your business. By knowing your recurring margin, you can make informed decisions about pricing and expenses, and identify areas where you can improve your profitability. So, if your business generates recurring revenue, make sure to calculate your recurring margin regularly.

How Do You Calculate Recurring Margin in SharpSpring

SharpSpring itself isn’t naturally geared towards letting you calculate complex metrics like Recurring Margin. As an alternative, teams typically use products like Arithmix to import data from SharpSpring and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like SharpSpring, combine it with data from other systems, and create calculations like Recurring Margin.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.