Break-Even Calculator
Find your break-even point in seconds. Enter your fixed costs, price, and variable cost per unit to see exactly how many units you need to sell — free, no signup, no spreadsheet.
Contribution margin: $30/unit (60%)
How the break-even calculator works
Enter three numbers — your fixed costs per month, the price you charge per unit, and what it costs you to deliver one more unit — and the calculator instantly shows your break-even point: the number of units (and the revenue) you need to sell each month before you start making a profit. Add your estimated monthly sales and it also shows how close you are to that line right now.
The break-even formula, explained
Break-even analysis comes down to one idea: every unit you sell contributes a little money toward covering your fixed costs. That per-unit contribution is called the contribution margin — your price minus your variable cost per unit. Once enough units’ worth of contribution margin adds up to cover your fixed costs, you’ve hit your break-even point.
- Contribution margin = price per unit − variable cost per unit
- Break-even point (units) = fixed costs ÷ contribution margin
- Break-even point (revenue) = break-even units × price per unit
If your contribution margin is $30 and your fixed costs are $4,000/month, you need to sell 134 units a month just to cover costs — anything beyond that is profit.
Common break-even analysis mistakes
- Forgetting a variable cost. Payment processing fees, shipping, and packaging are variable costs too — leave them out and your break-even point looks lower than it really is.
- Using revenue instead of price per unit. Break-even analysis works per unit; mixing in blended or discounted revenue skews the contribution margin.
- Treating fixed costs as static forever. Rent, salaries, and software costs creep up — rerun the calculator whenever your fixed costs change.
- Ignoring the break-even point when pricing. A lower price can win more customers but also raises your break-even point — always check both.
- Assuming break-even means “safe.” Break-even means $0 profit, not a healthy business — you still need margin for taxes, reinvestment, and bad months.
Frequently asked questions
What is the break-even point?
The break-even point is the level of sales — in units or in revenue — where your total revenue exactly equals your total costs. Below it you’re operating at a loss; above it, every additional sale is profit.
How do you calculate the break-even point?
Divide your fixed costs by your contribution margin (price per unit minus variable cost per unit). That gives you the break-even point in units. Multiply that by your price per unit to get the break-even point in revenue.
What's the difference between break-even units and break-even revenue?
Break-even units is how many individual sales you need to make; break-even revenue is the dollar figure those sales add up to. They describe the same break-even point from two angles — units for production/sales targets, revenue for cash-flow planning.
What's a good contribution margin?
It depends on the business model, but a contribution margin below 20–30% usually means you’ll need very high sales volume to cover fixed costs. Software and subscription businesses often run 70–90% margins; physical products with shipping and materials costs are often lower.
Does break-even analysis include one-time startup costs?
No — this calculator's break-even point is based on recurring monthly fixed costs (rent, salaries, subscriptions), not one-time costs like equipment or initial inventory. Those one-time costs affect how long it takes to recoup your total investment, which is a separate calculation from monthly break-even.
Can the break-even point change over time?
Yes. Any change to your fixed costs, price, or variable cost per unit shifts your break-even point — a rent increase raises it, a cheaper supplier or a price increase lowers it. Rerun the numbers whenever a cost or price changes.
Why does break-even analysis matter for a new business?
It turns "how much do I need to sell?" into a specific, testable number instead of a guess. Before you set pricing, take on more fixed costs, or plan a launch, break-even analysis tells you the minimum sales volume required just to not lose money.
Related free tools
- Startup Idea Generator — no idea to run the numbers on yet? Generate one first.
- Competitor Finder — see who else’s pricing you’ll be competing against.
- TAM SAM SOM Calculator — size your total addressable market before you plan how many units you need to sell.
- Competitor Analysis Template — see how competitors price and position before you set your own break-even assumptions.
Break-even by business type
- Food Business Ideas — thin margins make break-even math essential.
- Local Business Ideas
NEXT STEP
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