Glossary · Reading the business
Markup
In short
The difference between a product's cost and its selling price, expressed as a percentage of cost. Buyer cares because it directly impacts gross profit and the business's overall profitability.
What it means in a deal
When evaluating a business, analyze its markup on key products or services. A consistent and healthy markup indicates strong pricing power and efficient operations. Be wary of businesses with low markups unless they have extremely high sales volume, as it leaves little room for error or increased costs.
Related terms
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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