Break-Even Calculator
Find out exactly how many units you need to sell before your business starts making profit. Enter your costs and price — get your break-even point instantly.
The break-even point is where total revenue equals total costs. Below it you are losing money, above it you are making profit. Every unit sold beyond break-even is pure contribution margin.
Understanding break-even analysis
Break-even analysis answers the most fundamental business question: how much do I need to sell to not lose money? It separates your costs into two categories and uses them to find the tipping point.
Fixed costs are expenses that stay the same regardless of how much you sell. Rent, salaries, insurance, software subscriptions — these are due whether you sell 1 unit or 1,000. They are the baseline your revenue must cover.
Variable costs increase with each unit you produce or sell. Raw materials, packaging, shipping, payment processing fees — these only exist when a sale happens. The difference between your selling price and variable cost per unit is called the contribution margin.
Each unit sold contributes its margin toward covering fixed costs. Once all fixed costs are covered, every additional sale is profit. That crossover point is your break-even. The lower your fixed costs or the higher your contribution margin, the faster you reach it.