Break-Even Calculator
Calculate your break-even point to understand how many units you need to sell or revenue you need to generate to cover all costs. Essential for pricing and business planning.
Rent, salaries, insurance, etc.
Materials, shipping, commissions, etc.
Optional: calculate units for target profit
What is the break-even point?
The break-even point is where total revenue equals total costs - you're not making a profit or a loss. It tells you the minimum sales volume or revenue needed to cover all your costs. Beyond this point, you start making profit.
How do I calculate break-even point?
Break-even in units = Fixed Costs ÷ (Selling Price - Variable Cost per Unit). Break-even revenue = Fixed Costs ÷ Contribution Margin Ratio. The contribution margin is the selling price minus variable costs.
What are fixed costs?
Fixed costs remain constant regardless of sales volume. Examples include rent, salaries, insurance, loan payments, and subscriptions. These costs must be paid even if you sell nothing.
What are variable costs?
Variable costs change in proportion to sales volume. Examples include raw materials, packaging, shipping, sales commissions, and payment processing fees. They increase as you sell more.
Why is break-even analysis important?
Break-even analysis helps with pricing decisions, cost control, sales targets, and business planning. It shows the risk level of your business model and helps determine if a venture is viable before committing resources.
Break-Even Units
Fixed Costs ÷ (Price - Variable Cost)
Break-Even Revenue
Fixed Costs ÷ Contribution Margin %
Contribution Margin
Selling Price - Variable Cost
Business Planning
Use break-even analysis before launching products or making pricing changes.