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Do software companies have good margins? (benn.substack.com)
2 points by herbertl 6 months ago | hide | past | favorite | 1 comment



This was a more interesting rabbit hole than I expected. In my own software businesses, my average profit margin ranged between 7 and 15%. I naturally assumed that I fell somewhere near the median.

But TFA disputes that and indicates that I have been wildly profitable. I looked up various business statistics and confirmed that this was the case. A representative report:

> Asia is the only region where software companies have profited in the last five years as of 2020, with an average profit margin of 2.6 percent. North American firms are the least profitable, with an average net profit margin of minus 19.6 percent.

https://www.statista.com/statistics/1136209/five-year-revenu...

I have to admit, I found this completely surprising and it blew my mind a little.




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