Enter your fixed costs, variable cost per unit, and price per unit to find your break-even point — the exact number of units you must sell to cover all expenses. The Break-Even Calculator also shows your break-even revenue and a cost vs. revenue breakdown so you can price smarter and plan with confidence.
Break-Even Point (Units)
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Break-Even Revenue
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Contribution Margin Per Unit
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Contribution Margin Ratio
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Projected Profit / Loss
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A break-even analysis determines the point at which your total revenues equal your total costs — meaning you're neither making a profit nor a loss. It helps business owners understand the minimum sales needed to cover all expenses and is a key tool for pricing, budgeting, and financial planning.
Fixed costs are expenses that remain constant regardless of how many units you produce or sell. Examples include rent, salaries, insurance premiums, and loan repayments. These costs must be covered even if your business sells nothing in a given period.
Variable costs change in direct proportion to your production or sales volume. For each additional unit you produce, variable costs increase by the same amount. Common examples include raw materials, packaging, shipping costs, and sales commissions.
The break-even point in units is calculated by dividing your total fixed costs by the contribution margin per unit (selling price minus variable cost per unit). For example, if fixed costs are $10,000 and the contribution margin is $25 per unit, you need to sell 400 units to break even.
The contribution margin is the amount each unit sale contributes toward covering fixed costs and generating profit, calculated as selling price minus variable cost per unit. A higher contribution margin means you reach your break-even point faster with fewer sales.
Knowing your break-even point helps you set realistic sales targets, evaluate pricing strategies, assess the impact of cost changes, and make informed decisions about launching new products or expanding operations. It's essential for financial forecasting and securing business loans or investment.
If your selling price is equal to or lower than your variable cost per unit, you have a negative or zero contribution margin, which means you can never break even regardless of sales volume. In this case, every unit sold increases your loss, and you must either raise prices or reduce variable costs.
Yes. While the calculator uses 'units,' you can adapt it for service businesses by treating each client engagement, project, or billable hour as a 'unit.' Set your price per service delivery and estimate the variable cost (time, tools, subcontractors) per engagement alongside your fixed overhead costs.