Break-Even Calculator

How many sales until your business stops losing money? Enter your costs and price to find out — plus what it takes to hit a profit target.

The break-even formula

Break-even units = Fixed costs ÷ (Price − Variable cost per unit). The denominator is your contribution margin — what each sale contributes toward fixed costs after paying for itself. Until cumulative contribution covers fixed costs you're operating at a loss; after that, each sale's contribution margin is profit.

Fixed vs. variable — get the split right

Fixed: rent, salaries, insurance, software subscriptions, loan payments — costs that don't change whether you sell 10 units or 1,000.
Variable: materials, payment processing (~2–3% of price), packaging, outbound shipping, sales commission — costs incurred per sale.
Semi-variable costs (utilities, part-time labor) can be split, or conservatively treated as fixed.

Using break-even for decisions

Break-even analysis answers the questions that matter before spending money: Can this price point ever work at realistic volume? Does hiring (raising fixed costs) require an achievable sales bump? Would a 10% price rise (huge margin gain) lose more than the small number of customers it can afford to lose? Change one input above and watch the required units shift.

Frequently asked questions

What if my price is below my variable cost?

Then every sale loses money and no volume can save you — the calculator will warn you. Either raise the price, cut per-unit costs, or discontinue the product.

How do I use this for a service business?

Treat one billable hour (or one project) as the "unit". Price = your hourly rate; variable cost = direct costs per hour (subcontractors, materials); fixed costs = everything else. Break-even shows the billable hours per month you need.

Is a lower break-even always better?

Generally yes — it means less risk. But cutting fixed costs (e.g., skipping marketing) can also cap your sales. Aim for a break-even comfortably below your realistic monthly volume, not the theoretical minimum.