Break-Even Point Calculator
Find out exactly how many units you need to sell — and how much revenue that represents — before your small business starts turning a profit.
*Estimates only. Not financial advice. Actual break-even depends on real cost behavior and demand.
⚖️ When Does Your Business Turn a Profit?
The core math every founder should know before pricing a product.
How it Works
Divides your fixed costs by the contribution margin (price minus variable cost) per unit to reveal exactly how many sales cover your overhead before any profit begins.
The Formula
Break-Even Units = Fixed Costs ÷ (Price Per Unit − Variable Cost Per Unit). Break-Even Revenue = Break-Even Units × Price Per Unit.
Pro Tip
If your break-even volume feels unreachable, look at both sides of the equation: trim fixed overhead or raise your contribution margin by increasing price or cutting per-unit costs — either move lowers the target.
Frequently Asked Questions
What is the break-even point? +
The break-even point is the number of units you must sell (or the revenue you must generate) for total revenue to exactly equal total costs. Below that point you're operating at a loss; above it, every additional unit contributes to profit.
What counts as a fixed cost versus a variable cost? +
Fixed costs stay the same regardless of sales volume, like rent, salaries, insurance, and software subscriptions. Variable costs scale with each unit sold, like raw materials, packaging, per-unit shipping, and payment processing fees.
What is contribution margin and why does it matter? +
Contribution margin is price per unit minus variable cost per unit — the amount each sale contributes toward covering fixed costs. A higher contribution margin means you need to sell fewer units to break even and profits grow faster once you clear that point.
How does raising my price affect my break-even point? +
Raising price per unit while holding variable cost constant increases your contribution margin, which lowers the number of units needed to break even. Even a modest price increase can meaningfully shrink your break-even volume, though it may also affect demand.
Can a business have a break-even point in revenue instead of units? +
Yes. Break-even revenue is especially useful for businesses selling multiple products at different prices. It's calculated as Fixed Costs divided by the Contribution Margin Ratio (contribution margin divided by price), giving a dollar target rather than a unit count.
Does break-even analysis account for taxes or debt payments? +
Standard break-even analysis focuses on operating costs and does not include income taxes or loan principal repayments by default. For a fuller financial picture, treat scheduled loan payments as an additional fixed cost when estimating your true break-even volume.