Break-Even Calculator
Find the break-even point in units and revenue for your business.
The Break-Even Calculator determines exactly how many units you need to sell — or what total revenue you need to generate — to cover all your fixed and variable costs. At the break-even point, you make neither profit nor loss. Every unit sold beyond that point is pure profit. This is a critical tool for business planning: it tells you if a product idea is viable at your current price, how much you need to cut costs to become profitable, and how pricing changes affect your required sales volume. Essential for startups, new product launches, and ongoing business review.
Break-Even Calculator
Rent, salaries, insurance, etc.
Materials, per-unit labor, etc.
Formula
Examples
New Product Launch
$5,000 monthly fixed costs, $10 variable cost per unit, $25 selling price.
→ Break-even: 334 units/month, Break-even revenue: $8,350/month
Online Course Business
$2,000 monthly fixed costs (hosting, tools, ads). $0 variable cost per sale. $97 course price.
→ Break-even: 21 course sales/month ($2,037 revenue)
Food Truck / Café
$3,500 fixed costs/month, $4 variable cost per item, $11 average selling price.
→ Break-even: 500 items/month ($5,500 revenue)
Price Drop Analysis
Same product as Example 1. What if we drop the price to $20?
→ Break-even: 500 units/month (vs. 334 at $25 — 50% more units needed)
Tips
- ✓Calculate break-even before launching any product or service — it validates whether the economics work.
- ✓Include ALL overhead in fixed costs: your own salary, hidden subscriptions, and pro-rated annual expenses.
- ✓A lower break-even point gives you more margin for error and faster path to profitability.
- ✓Do a sensitivity analysis: recalculate break-even at +10% and -10% on price and costs to understand risk.
Frequently Asked Questions
What is the break-even point?
The break-even point is the level of sales at which total revenue exactly equals total costs — you make neither profit nor loss. Beyond this point, each additional unit sold generates profit equal to the contribution margin per unit.
What is the break-even formula?
Break-Even Units = Fixed Costs / (Selling Price − Variable Cost per Unit). The denominator (Selling Price − Variable Cost) is called the contribution margin per unit.
What counts as a fixed cost vs a variable cost?
Fixed costs stay constant regardless of production volume: rent, insurance, salaried staff, equipment depreciation, software subscriptions. Variable costs scale with production: raw materials, per-unit labor, shipping per item, transaction fees.
What is contribution margin?
Contribution Margin = Selling Price − Variable Cost per Unit. It is the amount each unit contributes toward covering fixed costs and, once break-even is reached, toward profit. A higher contribution margin means you need to sell fewer units to break even.
How does pricing affect the break-even point?
Higher selling prices increase the contribution margin and reduce the number of units needed to break even. Lower prices require selling more units. A 10% price increase often has a bigger impact on break-even than a 10% cost reduction.
What is the break-even point in revenue (dollars)?
Break-Even Revenue = Break-Even Units × Selling Price. Alternatively: Break-Even Revenue = Fixed Costs / Gross Margin %. This tells you the total sales dollars needed to cover all costs.
What if my break-even point is unreachable?
If your break-even calculation shows you need to sell more units than the market can support, you have three levers: raise prices (if the market allows), reduce fixed costs, or reduce variable costs per unit. Sometimes all three are needed.
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