Break-Even Calculator
Every business has a magic unit number: the sale where the rent stops being your money and becomes profit's. Break-even is fixed costs ÷ (price − variable cost) - the whole discipline of a business plan compressed into one line, and the first number any investor, lender or spouse asks for. This calculator runs it live, plus the two numbers that make it mean something: revenue required at break-even and the contribution margin each sale carries.
The note under the result is where strategy lives: because everything past break-even falls to profit at nearly 100% margin, small levers matter enormously - and a price increase almost always beats a volume chase. Your assumptions are remembered between visits, the result rides in the tab title, and the share link carries the scenario for partners to poke at.
How to use
- Enter monthly fixed costs - rent, salaries, subscriptions, everything that doesn't care about volume.
- Enter price per unit and the variable cost of delivering one unit.
- Read break-even units, then test: what happens to it if price rises $5?
Frequently asked questions
How is the break-even point calculated?
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). The denominator is the contribution margin: what each sale adds toward fixed costs after its own direct costs. $3,000 fixed, $49 price, $17 cost gives $32 margin and 94 units a month - unit #94 clears the slate; #95 is profit.
What counts as a fixed vs variable cost?
Fixed costs stay flat as volume changes: rent, salaries, software, insurance. Variable costs ride with each unit: materials, packaging, payment processing, shipping. The gray zone - your salary as founder, hourly labor - goes where it behaves more like the label says; be consistent rather than perfect.
Is a lower break-even point always better?
Lower is safer - fewer sales to survive a slow month - but the cheapest ways down (low price, minimal fixed spend) often cap the upside. The interesting move is usually the opposite direction: raising price raises margin, which cuts break-even while raising the ceiling. Run both scenarios above and compare.
Does break-even work for services or SaaS?
Yes, with honest inputs: a freelancer's variable cost per project might be just software fees and subcontractors; a SaaS has server cost per user and churn eating the 'units'. The formula is identical - what changes is how honestly you split fixed from variable, which this calculator makes you decide out loud.