Break-Even Calculator

Find out exactly how many units your business must sell to cover costs and become profitable.

Enter Your Numbers

Fixed Costs

Selling Price / Unit

Cost Per Unit

Your Results

Break-Even Units

—

units to sell

Contribution Margin

—

profit per unit sold

Revenue Needed

—

to break even

Understanding Break-Even Point

What is the Break-Even Point?

The break-even point is the number of units you must sell so that your total revenue exactly equals your total costs — you're not making a profit yet, but you're no longer losing money.

Break-Even Units = Fixed Costs ÷ (Selling Price − Cost per Unit)

What is Contribution Margin?

Contribution margin is how much each unit sale contributes toward covering your fixed costs. Once your total contribution equals your fixed costs, you've hit break-even — every sale after that is profit.

Contribution Margin = Selling Price − Cost per Unit

Why businesses calculate break-even

Validate your pricing. If break-even requires more units than your market can support, your price is too low or costs are too high — before you launch.
Set a minimum sales target. Your sales team needs a floor, not just a ceiling. Break-even gives every month a concrete survival number.
Evaluate new products or services. Before investing in inventory or marketing, know exactly what sales volume justifies the spend.
Negotiate with confidence. Banks and investors will ask. Knowing your break-even shows operational literacy and reduces perceived risk.
Make smarter cost cuts. Reducing fixed costs directly lowers break-even units — the calculator makes that tradeoff immediately visible.

Real Example

If your fixed costs are $5,000, your selling price is $50, and your cost per unit is $30 — your contribution margin is $20 per unit. You must sell 250 units to break even, requiring $12,500 in total revenue. Unit 251 is where profit begins.

Common Business Uses

🍽️

Restaurants

Calculate how many covers per night cover rent, staff, and food costs before a single dollar of profit is made.

💼

Agencies

Determine the minimum number of client retainers needed to cover salaries, software, and office overhead.

🔨

Contractors

Find the minimum billable days per month to cover tools, insurance, fuel, and administrative costs.

💻

Freelancers

Set a floor on monthly client hours to cover subscriptions, health insurance, and living expenses.

📦

Product Businesses

Know how many units must move before warehouse costs, manufacturing, and marketing spend are recovered.

🏗️

New Ventures

Before launching, validate that your projected sales volume is realistically above your break-even threshold.

Frequently Asked Questions

What is a break-even point?

The break-even point is the level of sales at which your total revenue equals your total costs — fixed and variable. At this exact point, you make zero profit and zero loss. Any sales beyond break-even generate profit; any sales below it produce a loss.

How do I calculate break-even?

Divide your total fixed costs by your contribution margin per unit (selling price minus cost per unit). For example: $10,000 fixed costs ÷ ($40 selling price − $15 cost per unit) = 400 units. You need to sell 400 units before a single dollar of profit is earned.

Why is knowing your break-even point important?

Without it, you're guessing. Break-even reveals whether your business model is viable at realistic sales volumes, helps you set minimum targets, guides pricing decisions, and gives lenders and investors confidence that you understand your financials. It's the most fundamental survival metric in business.

Can I reduce my break-even point?

Yes — three levers exist. First, lower your fixed costs (cheaper premises, fewer subscriptions, leaner staffing). Second, reduce your variable cost per unit through better supplier deals or more efficient production. Third, raise your selling price. Even a modest price increase can dramatically lower the number of units needed to break even.

What happens after I pass break-even?

Every unit sold beyond break-even contributes its full contribution margin directly to profit — your fixed costs are already covered. This is why scaling past break-even is so powerful: revenue grows linearly while fixed cost per unit shrinks. The goal is to build enough margin of safety above break-even to withstand slow months and unexpected costs.