Break-Even Point Calculator
Run a quick break even analysis: enter monthly fixed costs, your price, and your variable cost per sale to see your contribution margin, break-even units, and the revenue you need each month. Free, instant, no signup.
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Find Your Break-Even Point
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What Is a Break-Even Point?
A break-even point is the sales volume at which total revenue equals total costs, fixed plus variable. At that level a business makes no profit and takes no loss. Expressed in units, it tells you how many sales you need each month; expressed in dollars, it tells you the revenue those sales must generate.
How Do You Calculate the Break-Even Point?
Divide monthly fixed costs by your contribution margin per unit, which is price minus variable cost per unit. The result is break-even units per month. Multiply break-even units by price to get break-even revenue. This calculator applies exactly those two formulas to the numbers you enter, nothing more.
Worked example using the calculator defaults: $12,000 in monthly fixed costs, a $25 price, and a $10 variable cost per sale. Contribution margin = $25 − $10 = $15 per sale, which is $15 ÷ $25 = 60% of price. Break-even units = $12,000 ÷ $15 = 800 sales per month. Break-even revenue = 800 × $25 = $20,000 per month. Sell 801 units and the 801st contributes $15 of profit before taxes.
What Is Contribution Margin?
Contribution margin is what remains from each sale after variable costs: the dollars available to cover fixed costs and, once those are covered, to become profit. At a $25 price and $10 variable cost, each sale contributes $15, a 60% margin. The higher the margin, the fewer sales you need to break even.
Worked example: a restaurant
Example figures for illustration only. A restaurant carries $27,000 in monthly fixed costs (rent, salaried staff, insurance, base utilities), runs a $30 average ticket, and spends $12 per cover on food, packaging, and card fees. Contribution margin: $30 − $12 = $18, a 60% margin. Break-even units: $27,000 ÷ $18 = 1,500 covers per month, about 50 covers per day across a 30-day month, or $45,000 in monthly revenue. A slow season that lands below that line is exactly the gap restaurant funding is built to bridge.
Worked example: a retail store
Example figures for illustration only. A boutique has $9,000 in monthly fixed costs, a $40 average sale, and $22 in variable cost per sale (cost of goods plus processing). Contribution margin: $40 − $22 = $18, a 45% margin. Break-even units: $9,000 ÷ $18 = 500 sales per month, or $20,000 in revenue. Stocking up ahead of a peak season without draining cash is where retail funding typically comes in.
When Funding Helps You Reach Break-Even Faster
A break-even analysis usually surfaces one of two problems: fixed costs too heavy for the season, or margins squeezed by input prices. Capital can fund the fix.
A business line of credit smooths the months that land below break-even, so one slow stretch doesn’t force a fire sale. A term loan can pay for equipment or bulk purchasing that lowers your variable cost per unit, which raises your contribution margin and drops the break-even line itself. And if the gap is simply timing, start with the basics in the working capital guide.
If you do borrow, be honest with the math: add the payment to your monthly fixed costs and re-run this calculator. You can estimate the payment itself with the business funding calculator, or browse all of our free business calculators for the rest of your numbers.
Break-Even Calculator FAQs
What is a break-even point?
Your break-even point is the sales level where total revenue equals total costs, so the business is neither making nor losing money. Below it, every month drains cash; above it, each additional sale adds profit. Knowing the number in both units and dollars tells you exactly how much you need to sell each month before the business starts paying you.
How do you calculate the break-even point?
Subtract your variable cost per unit from your price to get the contribution margin. Then divide monthly fixed costs by that margin: the result is how many units you must sell each month to break even. Multiply those units by your price to get break-even revenue. This calculator runs both formulas instantly as you type, no signup required.
What counts as a fixed cost versus a variable cost?
Fixed costs stay roughly the same regardless of sales: rent, insurance, salaried payroll, software, loan payments. Variable costs rise with each sale: ingredients, materials, packaging, card processing fees, hourly labor tied to volume. Some costs are mixed; assign the portion that scales with sales to variable and the rest to fixed for a cleaner estimate.
Can business funding lower my break-even point?
Funding itself adds a payment, which raises fixed costs while you repay. What it can do is buy changes that improve the math: equipment that cuts variable cost per unit, bulk inventory pricing, or marketing that lifts volume past break-even sooner. Price the payment into your fixed costs first, then compare funding structures side by side before you commit.
How often should I run a break-even analysis?
Any time a major input changes: a rent increase, a new hire, a supplier price change, or a price change of your own. Many owners re-run the numbers monthly alongside their bank statements. It also pairs well with tracking your working capital position, so you can see both your monthly target and your cash cushion together.
Is this break-even calculator accurate?
It applies the standard contribution-margin formula to the numbers you enter, so the arithmetic is exact, but the output is only as good as your inputs and it is for illustration only, not financial advice. Real businesses have mixed costs and seasonal swings, so treat the result as a planning benchmark and confirm big decisions with your accountant.
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