Clear Break-Even Calculator
Find exactly how many units you need to sell before your business starts making money — the first number every new venture should know.
| Break-even revenue | $0 |
| Contribution margin per unit | $0 |
| Fixed costs per month | $0 |
How it works
Each sale contributes price − variable cost (the contribution margin) toward fixed costs. Break-even units = fixed costs ÷ contribution margin; break-even revenue is units × price. If the price doesn't exceed the variable cost, no volume can ever cover fixed costs.
Formula & worked example
Formula: Contribution margin = price per unit − variable cost per unit. Break-even units = fixed costs ÷ contribution margin, rounded up; break-even revenue = break-even units × price.
Worked example: With $12,000 a month of fixed costs, a $50 selling price and a $30 variable cost, the margin is $20 a unit — so break-even is 600 units a month, or $30,000 of revenue.
When to use this
- You are pricing a new product and need the monthly sales target that keeps the business alive, before you set the marketing budget.
- A market stall, coffee cart or small shop has rent and wages to cover and a product margin to cover them with.
- You sell a course, subscription or service and want to know how many paying customers equal survival.
- A discount is on the table and you need to check the business still breaks even at the lower price.
How to use it, step by step
- Total your fixed costs for one month — everything you owe even if you sell nothing.
- Enter the real selling price per unit, after the discounts you actually give.
- Enter the full variable cost per unit, including packaging, shipping and per-sale platform or card fees.
- Read the break-even units and the revenue they represent.
- Re-run with a cheaper supplier or a higher price to see which lever moves the target more.
What the inputs mean
| Input | What it is | Typical values |
|---|---|---|
| Fixed costs per month | Costs owed regardless of sales volume | Rent, base wages, insurance, software, loan payments |
| Price per unit | What a customer actually pays per sale | Use the after-discount price if you discount often |
| Variable cost per unit | Cost that exists only because a sale happened | Materials, packaging, shipping, card and platform fees |
Another worked example
With $9,600 a month of fixed costs, a $75 selling price and $35 of variable cost per unit, each sale contributes $40.00 toward the fixed costs. Break-even is 240 units a month, which is $18,000.00 of revenue — and the 241st unit is the first one whose $40.00 margin is profit rather than rent money.
Frequently asked questions
Why does break-even matter?
It turns a vague goal ("sell more") into a concrete monthly target. Every unit past break-even is pure contribution toward profit, so it also tells you how fast profits scale.
How can I lower my break-even point?
Three levers: cut fixed costs, raise prices, or reduce variable costs. Raising the contribution margin is usually the most powerful move.
What counts as fixed vs variable?
Fixed: rent, base salaries, insurance, software subscriptions. Variable: raw materials, packaging, shipping, payment processing fees, sales commissions.
Should I include my own pay in fixed costs?
If the business has to support you, yes — put the minimum you must draw each month into fixed costs, because a break-even that assumes you work for free is a hobby budget, not a business target. Many owners run the calculation twice: once to cover the business alone, and once to cover the business plus a real wage, and treat the second number as the true target.
How does break-even work when I sell several products?
Use a weighted average contribution margin: work out each product's margin, average them weighted by how much of your sales each product represents, and divide fixed costs by that blended margin. If the sales mix shifts toward your low-margin products, the break-even rises even though no price or cost changed — which is why the mix matters as much as the margins.
Is break-even the same as covering my cash outgoings?
Not quite. This is an accounting break-even: it covers the fixed and variable costs you enter. Debt payments, tax bills and replacing worn equipment are real cash demands that may not appear in a cost list, so if any of those apply, add them to fixed costs and the figure becomes a cash break-even — the sales level at which the bank account also holds steady.
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