Break-Even Calculator
Find out how much you need to sell before you stop losing money. Enter your monthly fixed costs, your price, and what each sale costs you to see the break-even point in units and dollars. Add a profit target to see what it takes to reach it.
Rent, salaries, insurance, software, loan payments
Materials, packaging, card fees
Optional
How to calculate the break-even point
- Contribution per unit = price − variable cost per unit
- Break-even units = fixed costs ÷ contribution per unit
- Break-even revenue = break-even units × price
- Units for a profit target = (fixed costs + target profit) ÷ contribution per unit
Example. With $12,000 a month in fixed costs, a $25 price, and $10 of variable cost per sale, each sale contributes $15. You need 800 sales a month ($20,000 in revenue) to break even, and 1,000 sales to make $3,000 profit.
How price changes the break-even point
Same business, $12,000 a month in fixed costs and $10 of variable cost per sale, at different prices:
| Price | Contribution per sale | Break-even sales | Break-even revenue |
|---|---|---|---|
| $15 | $5 | 2,400 | $36,000 |
| $20 | $10 | 1,200 | $24,000 |
| $25 | $15 | 800 | $20,000 |
| $30 | $20 | 600 | $18,000 |
| $40 | $30 | 400 | $16,000 |
| $50 | $40 | 300 | $15,000 |
A small price increase can cut the sales you need sharply, because all of it goes to contribution.
Things to know
- Fixed costs stay the same whatever you sell: rent, salaries, insurance, software, and loan payments. Variable costs rise with each sale: materials, packaging, card fees, and commissions.
- If your price is at or below your variable cost, you can never break even. Every sale loses money before fixed costs.
- Use the break-even point to sanity-check a sales forecast or business plan. If you need more sales than you can realistically make, change the price or the costs.
- Taking on a loan raises your fixed costs by the monthly payment. Add it in to see how much more you need to sell to cover the debt.
Frequently asked questions
How do I calculate the break-even point?
Divide your fixed costs by the contribution each sale makes, which is the price minus the variable cost. With $12,000 in fixed costs and $15 of contribution per sale, the break-even point is 800 sales.
What is break-even revenue?
It is the sales in dollars you need to cover all your costs: the break-even units multiplied by the price. 800 sales at $25 is $20,000.
What counts as a fixed cost?
Costs that do not change with how much you sell in a month, such as rent, salaries, insurance, software subscriptions, and loan payments.
What if I sell services instead of products?
Use an hour, a job, or a client as the unit. The price is what you charge per unit, and the variable cost is what each one costs you to deliver, such as contractor pay or materials.
What is the contribution margin?
It is the share of each sale left to cover fixed costs after variable costs: $15 of a $25 sale is a 60% contribution margin. Break-even revenue is also fixed costs ÷ contribution margin: $12,000 ÷ 0.6 = $20,000.
Can I use this for a rental property?
For a rental, the question is usually whether the rent covers the mortgage, taxes, insurance, and upkeep. The DSCR calculator answers that more directly than a units-based break-even.
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Calculators give estimates from the numbers you enter. They are not tax, legal, or accounting advice.