Break-Even Calculator
How many units do you have to sell to stop losing money? Find out in seconds, then stress-test pricing and cost scenarios.
Your numbers
Costs that don't change with volume: rent, salaries, software, insurance — for the period you're analyzing.
What you charge per unit sold.
Cost that scales with each unit sold: materials, packaging, payment processing, per-unit shipping.
Break-even point
Units to break even
667
Total revenue at break-even: $33,333.33
Contribution margin / unit
$30.00
Price − Variable Cost
CM ratio
60.00%
% of price that covers fixed costs & profit
💡 What this means
Selling fewer than 667 units = a loss. Every unit beyond that adds $30.00 to your profit.
Break-even analysis in 90 seconds
Every business has two kinds of costs. Fixed costs (rent, salaries, software) stay the same whether you sell 10 units or 10,000. Variable costs (materials, packaging, payment fees) only happen per sale. Break-even analysis asks: how many units do I have to sell so the revenue covers both?
Break-Even Units = Fixed Costs ÷ (Price − Variable Cost) Break-Even Revenue = Break-Even Units × Price
The bottom of that formula — Price minus Variable Cost — is called the contribution margin. It's the amount every unit sold contributes toward paying off fixed costs (and, after break-even, to profit). The higher the contribution margin, the faster you reach break-even.
A worked example
You're launching a candle business. Fixed costs (rent + salary) come to $20,000/month. Each candle sells for $50 and costs $20 to make and ship.
- • Contribution margin: $50 − $20 = $30 per candle
- • Break-even units: $20,000 ÷ $30 = 667 candles/month
- • Break-even revenue: 667 × $50 = $33,350/month
Below 667 candles/month: losing money. Above: every additional candle adds $30 to profit. Now ask: can I realistically sell 667 candles a month? If the answer is no, the business doesn't work — change the price, the costs, or both.
When break-even analysis fails
Break-even assumes a few things that often aren't true in real businesses:
- Constant per-unit costs. In reality, variable cost drops as volume grows (bulk discounts, manufacturing scale).
- One product, one price. Most businesses sell a mix. For mixed-product analysis, use the weighted-average contribution margin.
- All capacity is fungible. If selling 1,000 units requires a second factory shift, your "fixed" costs jump at that volume — they're step-fixed, not truly fixed.
For a back-of-envelope feasibility check, the basic formula is fine. For a serious operating plan, layer in step costs and volume-based variable cost curves.
Frequently asked questions
What's the break-even point?▼
The number of units you have to sell so total revenue exactly equals total costs — no profit, no loss. One unit beyond that adds your contribution margin (price minus variable cost) to your profit.
What counts as a fixed cost?▼
Anything that doesn't change with the number of units sold over your analysis period. Typical fixed costs: rent, salaries, software subscriptions, insurance, debt payments, depreciation. Marketing is debatable — fixed if you commit to a campaign budget, variable if it scales per-acquisition.
What counts as a variable cost?▼
Anything that scales with each unit produced or sold: raw materials, manufacturing labor, packaging, payment processing fees (e.g., 2.9% + $0.30 from Stripe), per-unit shipping, sales commissions. If you sold zero units, you'd pay zero of this.
What's contribution margin?▼
Selling price minus variable cost per unit. It's the amount each sale contributes to covering fixed costs (and, once break-even is passed, to profit). High contribution margin = each sale moves the needle a lot.
How do I lower my break-even point?▼
Three levers: raise the price (most impactful), reduce variable cost per unit (e.g., negotiate supplier rates, redesign for efficiency), or cut fixed costs (move to a smaller space, drop unused software, defer hiring). Test scenarios in the calculator — small price changes often move break-even more than you'd expect.