How Do We Calculate These Figures?

Every band in our hardware-sector articles has a calculation behind it. This page explains how that calculation is built, what is included and excluded, and what to watch for when reading the numbers. 📐

Short answer: we read three sources together, publish a range rather than a single figure, and update every band on a regular rhythm.

Below: our sources, the four families of figures, why a band is a range, what we leave out and how often we refresh.

Where do the figures come from?

Three sources, read together.

1. Field records

Anonymised cost tables, sales breakdowns and stock turnover data from businesses we advise and speak with. No name, brand or location is ever used.

2. Open price and tariff data

Suppliers’ published list prices, rent indices, wage and social security items, energy tariffs. These are verifiable and publicly available.

3. Independent sector reports

Research published by trade bodies, chambers of commerce and sector associations. When they conflict with our field data we state both rather than forcing a single conclusion.

What do the four families of figures mean?

Four separate things that shouldn’t be confused.

Profit margin

The difference between selling price and buying cost as a share of sales. Unless stated otherwise it is the gross margin; operating costs have not been deducted.

Capital

The total money needed to open and survive the early months: stock, fixtures, deposit, licences and working runway included.

Costs

The monthly running cost. The sum of fixed (rent, wages), variable (fuel, energy) and invisible items (stock opportunity cost, wastage, idle capacity).

Earnings

The monthly net remaining after all costs; it is before tax and the owner’s own labour is not shown as a separate line.

Why a range rather than one figure?

Because a single figure misleads.

Same branch, different outcome

Two ironmongers of the same size in the same district can differ in earnings by a factor of two. Location, product mix, trade network and whether the owner works the floor produce that gap.

What do the ends of the band mean?

The lower end represents a newly established or narrowly run business; the upper end one that has settled and made the right decisions. It’s a range, not an average.

What do we leave out?

We write the boundaries to stay transparent.

Excluded items

Tax burden (which varies by business structure), loan interest and debt repayment, the founder’s own salary, extraordinary costs and one-off investments are not included in the bands.

Regional variation

The figures are built for the country as a whole. Metropolitan centres can exceed the upper end and small settlements fall below the lower; rent and wages explain most of that gap.

How often do we update?

More often where volatility is higher.

The update rhythm

We review capital and cost bands quarterly and margin and earnings bands every six months. When commodity prices move sharply we update the affected branches without waiting.

If you find an error

If a real figure from the field conflicts with our bands, write to us; we’ll correct it. This page develops through that feedback too.

Are these figures a guarantee?

No, and that matters.

What we promise and what we don’t

The bands we publish are a direction, not an earnings commitment. None of our articles says “you will earn this much”; they say “under these conditions, results are seen in this range”. You need to build your own business’s numbers with your own data, and we help you build that calculation.

📝 Why We Wrote This Page

The thing we met most often in sector writing was figures with no visible source: “an ironmonger earns this much a month” was stated without saying what was included, at what scale or under which conditions. We decided that when we publish a band we publish the calculation too. Knowing how a figure was built serves you more than the figure itself. A number without evidence is a claim, not information.

📖 Quick Glossary

Gross margin: the gap between selling price and buying cost as a share of sales. Break-even point: the revenue level where profit and loss cancel out. Working runway: money set aside to cover costs until income settles. Turnover speed: how many times capital converts to sales within a year.

⚡ Quick Summary

Three sources: field records, open tariffs, independent reports. 📊 Four families: margin (gross), capital (opening plus runway), costs (fixed, variable and invisible), earnings (monthly net, before tax). A band is given, never a single figure. Tax, loans and founder’s salary are excluded. This is not an earnings guarantee.

🎯 Next Step

Let’s build your own business’s numbers from your own data: quote form · free digital audit. Bands for all 17 branches on the hardware sector page. 🤝

Frequently Asked Questions

What date do the figures refer to?

Each article shows its publication and update date on the page; bands are built for the conditions at that date. Because commodity and rent movements are fast, we suggest checking the current date.

What if my business falls outside the band?

A band is a range, not an average; being above it shows good management, being below doesn’t necessarily mean a mistake. Finding where the difference comes from is more valuable than the figure itself.

What happens if I share my data?

Shared data is used only in anonymous, aggregated form; business name, location and personal details appear nowhere. You can also ask for your data not to be used at all.

Source: Eurostat — Business Statistics