Break-Even Calculator
Find how many units you need to sell or how much revenue you need to cover all costs.
Business Inputs
Break-Even Units
400
Break-Even Revenue
$16,000
Contribution Margin
$25
Current Profit
$2,500
Current Performance
Profit Targets
| Target Profit | Units Needed | Revenue Needed |
|---|---|---|
| $1,000/mo | 440 | $17,600 |
| $5,000/mo | 600 | $24,000 |
| $10,000/mo | 800 | $32,000 |
| $25,000/mo | 1,400 | $56,000 |
| $50,000/mo | 2,400 | $96,000 |
Note
This is a simplified break-even analysis. Real businesses have variable fixed costs, seasonal demand, and multiple product lines.
Understanding Break-Even Analysis
The break-even point is where total revenue equals total costs — you're not making a profit or a loss. Every unit sold beyond break-even contributes directly to profit at the contribution margin rate. This analysis helps with pricing decisions, startup planning, and evaluating new product launches.
The Break-Even Formula
| Metric | Formula |
|---|---|
| Contribution Margin | Selling Price − Variable Cost per Unit |
| Contribution Margin % | Contribution Margin ÷ Selling Price |
| Break-Even Units | Fixed Costs ÷ Contribution Margin |
| Break-Even Revenue | Fixed Costs ÷ Contribution Margin % |
Fixed vs Variable Costs
Fixed costs stay the same regardless of sales volume: rent, insurance, salaries, loan payments. Variable costs increase with each unit sold: materials, shipping, sales commissions, credit card fees. Some costs are semi-variable (utilities, which have a base cost plus usage-based charges). When in doubt, use the higher estimate.
SBA — Plan Your Business→Frequently Asked Questions
What's a good contribution margin?
It varies by industry. Software/SaaS companies often have 80-90% margins. Restaurants run 60-70%. Retail typically ranges 30-50%. Manufacturing can be as low as 20-40%. Higher margins mean you reach break-even with fewer sales.
How does break-even help with pricing?
If break-even units seem unrealistically high, your price may be too low or your costs too high. Try different price points to see how break-even changes. A 10% price increase can dramatically reduce the number of units needed to break even.
Also try: Profit Margin Calculator and Startup Cost Calculator.