Break-even Calculator

Break-even is the moment your business stops losing money — when total revenue equals total costs. Knowing this number is non-negotiable for any founder, freelancer, or product manager. Below break-even, every sale loses money. Above it, every sale is pure profit. This calculator finds the exact unit count and revenue you need.

Find the exact units and revenue you need to cover all costs — and what it takes to hit your profit target.

Currency:

Fixed Costs (per month)

Selling Price per Unit

Variable Cost per Unit

Target Profit (optional)

Break-even Analysis

Break-even Units–

Break-even Revenue–

Contribution per Unit–

Contribution Margin %–

Units to Hit Target Profit–

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Break-even Logic

Every product has two cost layers. Fixed costs (rent, salaries, software) don’t change with volume. Variable costs (raw materials, packaging, payment processor fees) scale with each unit sold.

Each unit you sell contributes (Price − Variable Cost) toward covering the fixed costs. Once enough units are sold to cover all fixed costs, you’re at break-even.

The Formula

Contribution per Unit = Price − Variable Cost
Break-even Units = Fixed Costs / Contribution per Unit
Break-even Revenue = Break-even Units × Price
Units for Target Profit = (Fixed Costs + Target Profit) / Contribution per Unit

Worked Example

Example: A SaaS app: Fixed costs $20,000/month (servers + salaries). Subscription price $50, variable cost per user $20 (support, payment fees). Contribution per user = $30. Break-even = 20,000 / 30 = 667 paying users. Below 667, you lose money. Want $10,000 monthly profit? Need (20,000 + 10,000) / 30 = 1,000 users.

Strategic Lessons

High contribution margin businesses scale faster. SaaS (90%+ CM) hits break-even quickly; restaurants (15–25% CM) need volume.
Cut fixed costs first if break-even feels far. Every $1,000 of fixed-cost reduction = $1,000 / CM units fewer needed.
Raising prices helps disproportionately. A 10% price increase often raises CM by 30–50% (because variable cost stays flat).
Watch the operating leverage. Once past break-even, profit grows much faster than revenue — but in a downturn, fixed costs become deadweight.

Frequently Asked Questions

What’s a ‘good’ break-even point?▾

Lower is always better, but realistic targets depend on industry. Software: 6–18 months from launch. Restaurants: 12–24 months. Manufacturing: 24–48 months. The longer the path to break-even, the more capital you need.

Should I include depreciation in fixed costs?▾

For accounting break-even (matches P&L), yes. For cash break-even (matches bank account), no — depreciation isn’t cash out. Run both — the gap is informative.

How do I handle multiple products?▾

Use a weighted contribution margin: (Σ Sales × Margin) / Σ Sales. Or compute break-even per product and allocate fixed costs by product mix.

What if my variable cost changes with volume?▾

Build the calculation in tiers — at 100 units VC is $20, at 500 units it’s $18 (volume discounts). Solve break-even within each tier and verify it’s within the right range.

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