Break-even calculator

How many you need to sell each month to cover your costs, and to hit a profit target.

Break-even is the point where your sales cover every cost and you stop losing money. Know that number and you know whether a price, a product or a whole business idea can work.

Why use it

Test a business idea on paper before you spend money on it.
See how a price change or a cheaper supplier moves the number of sales you need.
Turn a profit goal into a sales target you can actually track each week.

How it works

Enter your fixed costs for a month: rent, salaries, subscriptions, loan repayments.
Enter your selling price per unit and what each unit costs you to make or buy.
Add a monthly profit target if you have one.
Read the break-even units and revenue, and the units you need to reach your target.

Good to know

The magic number is the contribution: price minus variable cost. Sell at 2,500 with a cost of 1,000 and each sale contributes 1,500 towards your fixed costs.
With fixed costs of 300,000 a month and a contribution of 1,500, you break even at 200 units. Add a 150,000 profit target and you need 300.
Raising your price a little often moves break-even more than cutting costs does, because all of the increase goes straight to contribution.

Questions

How is break-even worked out?

Divide your fixed costs by the contribution per unit, which is the selling price minus the variable cost. Multiply the result by the price to get break-even revenue.

What counts as a fixed cost and what is variable?

Fixed costs stay the same however much you sell, like rent and salaries. Variable costs rise with each sale, like materials and delivery. Some costs are a bit of both; split them as best you can.

I sell many different products. Can I still use this?

Yes, as an estimate. Use your average selling price and average cost per unit, or run it once for each main product to see which ones carry the business.

Is my information saved?

Only on your own device, so your figures are there next time. Nothing you type is sent to us.

Please note

Provided free, as is, for general use. It is not financial, accounting, tax or investment advice. Results are estimates that depend entirely on the figures you enter, and real costs, prices and sales vary. Do not rely on this alone to borrow, invest or make major decisions; check your figures with an accountant or qualified adviser.