Free tool
EBITDA calculator: the Power of 1%
Move sales, margin and overheads by one percent each. Watch what happens to EBITDA.
Most leaders look for the one big lever. The profit is usually in several small ones moving at once, because they compound. This calculator shows the effect on your own numbers in about thirty seconds.
Your numbers
Your EBITDA today: £2.50m (10.0% of revenue)
Now move three things by one percent
That is three levers. The full model runs seven, and they compound, which is a materially different number.
The full seven-driver model
The teaser moves three levers. The full model runs all seven EBITDA drivers on your own numbers and shows what one percent on each is worth, which is usually the surprising part. On most businesses the seven find about double what the three show you.
How the calculation works
EBITDA is earnings before interest, tax, depreciation and amortisation: what the trading business earns before the financing and accounting layers sit on top. It is the number buyers, boards and lenders look at first.
A one percent move on revenue does not add one percent to EBITDA. It adds one percent of revenue multiplied by your gross margin. On a 43% margin, £1 of extra revenue adds 43p of gross profit and, with overheads unchanged, 43p of EBITDA. Cost levers behave differently: a pound taken out of overheads drops straight through, all of it.
That asymmetry is why working several levers together beats hunting for one big one, and why overhead efficiency is usually the most underrated driver on the list.
What is a good EBITDA margin?
It depends more on your sector than on your performance. UK professional services businesses commonly run 10% to 20%. Below 10% there is usually either a pricing problem or an overhead problem, and both are fixable. Above 20% the question is normally whether growth is being under-invested in.
The more useful question is not what a good margin looks like in general, but which of your seven drivers has the most room in it right now. That is what the full model answers.
Where this comes from
The Power of 1% model is the spine of the ROI for AI Bootcamp, an eight-week programme for MDs and directors of £5M to £500M businesses. In the bootcamp you build your own version of this model on your real numbers, then work through twelve AI workflows, each tied to one of the seven drivers.