Break-Even Calculator

What is a Break-Even?

The break-even point is the level of sales at which total revenue equals total costs — the point where you are neither making a profit nor incurring a loss. Every unit sold beyond the break-even point generates pure profit equal to the contribution margin (selling price minus variable cost). Understanding break-even is fundamental for pricing decisions, production planning, and evaluating business viability. It answers the most critical business question: how much do I need to sell just to cover my costs?

How to Use This Calculator

Enter your total fixed costs per month — these are costs that do not change with volume, such as rent, salaries, utilities, and loan payments. Enter the variable cost per unit — costs that increase with each unit produced or sold, like materials, packaging, and direct labor. Enter your selling price per unit. Click Calculate to see your break-even units per month, break-even revenue, contribution margin per unit, and contribution margin ratio.

💡 Pro Tips

• ✓Lower fixed costs reduce your break-even point — consider shared offices, outsourcing, or asset leasing.
• ✓Increasing your selling price has a dramatic effect on break-even — even a 10% price increase can reduce break-even units by 20%+.
• ✓The contribution margin ratio tells you how much of every sale goes toward covering fixed costs — higher is better.
• ✓New businesses should aim to reach break-even within 6–12 months of launch.
• ✓Calculate break-even for each product line separately if you have multiple products with different margins.

Who Uses This Calculator?

Entrepreneurs evaluating a new business idea before investing. Managers justifying a new product launch to investors. Restaurant and retail owners setting menu prices and sales targets. Freelancers calculating minimum billable hours needed to cover expenses. Investors evaluating the risk and timeline to profitability of a business.

Frequently Asked Questions