Break-Even Calculator
Use this free break-even calculator to find the exact number of units you need to sell each month before your business starts turning a profit. Enter your fixed costs, price, and variable cost per unit to see your break-even point and revenue target instantly.
Your numbers
Fixed costs are expenses that stay the same each month (rent, salaries, software). Variable costs change with each unit you sell (materials, shipping, payment fees).
Your break-even point
Contribution margin / unit
$25
Contribution margin ratio
62.5%
Break-even units / month
200
units to cover all costs
Break-even revenue / month
$8,000
Revenue vs. total cost
The point where the two lines cross is your break-even — every unit after it turns a profit.
How this calculator works
Your break-even point is the sales volume where total revenue covers your total costs — the moment your business stops losing money and starts making it. Knowing it tells you exactly how much you have to sell to keep the lights on, which is one of the first questions any lender, investor, or co-founder will ask.
The math rests on contribution margin: the selling price of one unit minus the variable cost of producing that unit. That margin is what each sale “contributes” toward your fixed costs. Divide your monthly fixed costs by the contribution margin per unit and you get the number of units you must sell to break even:
Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit)
For example, if your fixed costs are $5,000 a month, you sell each unit for $40, and each unit costs $15 in materials and fees, your contribution margin is $25. Dividing $5,000 by $25 gives a break-even point of 200 units per month, or $8,000 in revenue. Sell more than that and every additional unit adds $25 of profit; sell less and you operate at a loss.
To use the tool, enter your three numbers above. The results card shows your contribution margin per unit, your contribution margin ratio, and your monthly break-even point in both units and revenue. The chart plots revenue against total cost as sales grow — the point where the two lines cross is your break-even. If your selling price is lower than your variable cost, there is no break-even point, and the calculator will tell you so.
Break-even is one piece of a complete financial picture. For projections, cash flow, and industry benchmarks, see the business plan financials hub. You can also estimate what it costs to launch with the startup cost calculator or model your first few years with the financial projection calculator.
Frequently asked questions
What is a break-even point?
Your break-even point is the sales volume at which total revenue exactly equals total costs — you make neither a profit nor a loss. Below it you lose money; above it, every additional sale contributes profit. It is usually expressed as a number of units per month and a matching revenue target.
How do you calculate break-even?
Divide your fixed costs by the contribution margin per unit (selling price minus variable cost per unit). For example, if your fixed costs are $5,000 a month, you sell each unit for $40, and each unit costs $15 to make, your contribution margin is $25, so you break even at 200 units ($5,000 ÷ $25). At a $40 price that is $8,000 in monthly revenue.
What is contribution margin?
Contribution margin is the money left from each sale after covering that unit’s variable costs — the selling price minus the variable cost per unit. It is the amount each sale "contributes" toward paying your fixed costs and, once those are covered, toward profit. The contribution margin ratio expresses that figure as a percentage of the selling price.
How can I lower my break-even point?
You can reach break-even sooner by raising your price, reducing your variable cost per unit (cheaper materials, better supplier terms, lower payment fees), or cutting fixed costs such as rent and subscriptions. Each change widens your contribution margin or shrinks the costs you need to cover, so fewer units are required.
Why does break-even matter for a business plan or loan?
Lenders and investors want to see that you understand the volume of sales needed to become sustainable. A clear break-even analysis shows when your business will cover its costs and start generating profit, which is a core part of the financials section of any bank-ready or SBA business plan.
Turn these numbers into a plan
Your break-even point is the start. Optimus Business Plans builds your full, funding-ready financials and business plan around it.
Create your business plan