Break-even Calculator
Find how many units you need to sell to cover your costs.
Calculate the break-even point — in units and revenue — from your fixed costs, price per unit, and variable cost per unit.
The break-even formula
Break-even units = fixed costs ÷ (price per unit − variable cost per unit)
The part in brackets is the contribution margin: what each sale leaves over, after its own costs, to pay down your fixed costs. Once enough sales have covered the fixed costs, every further sale is profit. Break-even revenue is simply break-even units × price.
Examples
| Business | Fixed costs / month | Price | Variable cost | Break-even |
|---|---|---|---|---|
| Coffee cart | $3,000 | $4.50 | $1.50 | 1,000 cups ($4,500) |
| Etsy shop | $800 | $25 | $10 | 54 orders |
| Bakery | $6,500 | $3.25 | $1.10 | 3,024 items |
| Software subscription | $12,000 | $49 | $4 | 267 subscribers |
The calculator rounds units up, because you can't sell part of a cup or an order.
Three ways to break even sooner
- Raise the price. Moving the coffee from $4.50 to $5.00 lifts the margin per cup from $3.00 to $3.50 and cuts break-even from 1,000 to 858 cups.
- Lower variable costs. Cheaper supplies, packaging or shipping raise the margin on every sale.
- Cut fixed costs. Trimming the coffee cart's monthly costs to $2,500 brings break-even down to 834 cups.
Break-even analysis assumes every unit sells at the same price and costs the same to make. Discounts, bulk pricing and seasonal sales change the real picture, so rerun the numbers when your prices or costs change.
Frequently asked questions
What is the break-even point?
The point where total revenue equals total costs — beyond it, each additional unit sold is profit. It's calculated as fixed costs ÷ (price per unit − variable cost per unit).
What counts as a fixed cost vs. a variable cost?
Fixed costs stay the same regardless of how much you sell (rent, salaries, insurance). Variable costs scale with each unit produced or sold (materials, packaging, per-unit shipping).
What is the contribution margin?
It's the price per unit minus the variable cost per unit — the amount each sale contributes toward fixed costs and then profit. A $25 product that costs $10 to make and ship has a $15 contribution margin, or 60% of the price.
Should I include my own salary in fixed costs?
If you want the business to pay you, yes. Adding the monthly pay you need as a fixed cost shows how many sales it takes to cover your costs and your income, not just to avoid a loss.
How do I find break-even for a month or a year?
Use fixed costs for the same period. Monthly rent, insurance and software give a monthly break-even; annual totals give the yearly number of units you need to sell.