Break-even calculator
Units to sell before a product makes money.
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How it's calculated
Each sale brings in the price and costs you the variable cost; the difference, the contribution margin, is what is left to pay the fixed costs. Divide the fixed costs by that margin and you have the number of sales that just covers them: the break-even point. Add a target profit to the fixed costs to see how many sales reach it. Multiply the units by the price for break-even revenue.
What counts as a fixed cost?
Anything you pay regardless of sales: rent, salaries, insurance, loan payments, software subscriptions, your own base pay. Costs that rise with each sale, like materials, shipping, card fees and sales commission, are variable and belong in the per-unit figure.
How do I lower my break-even point?
Three levers: raise the price, cut the variable cost per unit, or cut fixed costs. Raising the price is usually the strongest, since every dollar goes straight to the contribution margin. A $5 price rise on a $30 margin cuts the units needed by a sixth.
Can I use this for a service business?
Yes. Make a unit one billable hour, one client or one project: the price is what you charge for it and the variable cost is what delivering it costs you, such as subcontractors or travel. The result is the hours, clients or projects a month you need.
Results are estimates for informational purposes only and are not financial, medical or legal advice.