Break-Even Calculator
Units and revenue to break even from fixed costs, price and variable cost, contribution margin, margin of safety at your expected volume, units for a target profit and price/cost sensitivity.
| Contribution margin per unit | — |
|---|---|
| Contribution margin ratio | — |
| Break-even revenue | — |
| Per day / per week | — |
| At your expected volume | — |
| Margin of safety | — |
| Units for the target profit | — |
| Sensitivity | — |
Profit at different volumes
In short
Break-even units = fixed costs ÷ (price − variable cost per unit); break-even revenue = fixed costs ÷ contribution-margin ratio. With 12,000 of monthly fixed costs, a 45 price and 18 variable cost, the contribution margin is 27 (60%) and break-even is 445 units or about 20,000 of revenue; margin of safety = (expected sales − break-even) ÷ expected sales.
Who this is for: Founders, shop owners and product managers pricing a product or checking a business plan.
Break-even analysis
- Break-even units = fixed costs ÷ (price − variable cost per unit). The denominator is the contribution margin — what each sale contributes to fixed costs once its own direct costs are paid.
- Break-even revenue = fixed costs ÷ contribution margin ratio — the version to use for services or mixed products where "units" are fuzzy (treat an average order as the unit).
- Margin of safety = (expected sales − break-even) ÷ expected sales: how far sales can fall before losses start.
- The sensitivity line shows the three levers: price is usually the most powerful, variable cost next, fixed cost last — a 10% price rise lowers break-even more than a 10% cut in overheads.
- Fixed costs are those that do not change with volume this month (rent, salaries, subscriptions, loan payments); variable costs scale with each unit (materials, shipping, payment-processing fees, marketplace commission, sales commission). Semi-variable costs go in whichever bucket dominates.
Assumptions
- Contribution margin = price − variable cost; break-even units = fixed costs ÷ margin, rounded up; revenue = units × price.
- Margin of safety = (expected − break-even) ÷ expected; target-profit units = (fixed + target) ÷ margin.
- Sensitivity recalculates break-even for +10% price, −10% variable cost and −10% fixed cost.
Worked example
Contribution margin 27 (60%). Break-even 445 units — about 20,000 of revenue, 15 units a day. At 600 units profit is 4,200 with a 25.9% margin of safety. The 5,000 target needs 630 units. Raising the price 10% to 49.50 cuts break-even to 381 units; trimming variable cost 10% only to 417.
Frequently asked questions
What is the break-even formula?
Fixed costs ÷ (selling price − variable cost per unit) = units; fixed costs ÷ contribution-margin ratio = revenue.
How do I break even on a service business?
Use an average job or hour as the unit: price per job, direct cost per job (subcontractors, materials, travel), and monthly overheads as fixed costs.
Does break-even include my own salary?
Only if you put it in fixed costs — which you should; a business that breaks even without paying the owner is losing money.
Is this the same as payback period?
No — payback is how long it takes to recover an investment; break-even is the volume at which ongoing operations stop losing money. The ROI calculator covers the first.
What is contribution margin?
Price minus variable cost per unit — the amount each sale contributes to covering fixed costs and then profit.
How many units do I need to sell to make a profit?
Fixed costs plus the profit you want, divided by the contribution margin per unit.
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