About the Break-Even Calculator
The break-even point is the sales volume at which a business stops losing money and starts making it. It falls straight out of three numbers: fixed costs, price per unit, and variable cost per unit. Knowing it tells you whether a price rise or a cost cut moves the needle faster.
How to use the Break-Even Calculator
- Enter total fixed costs for the period — rent, salaries, software, insurance.
- Enter the selling price of one unit.
- Enter the variable cost of producing one unit — materials, shipping, payment fees.
- Read the break-even units and revenue, then judge whether that volume is realistic.
The formula behind it
Contribution margin per unit = price − variable cost. Break-even units = fixed costs ÷ contribution margin. Break-even revenue = break-even units × price.
Frequently asked questions
What counts as a fixed cost?
Anything that does not change with volume in the period: rent, permanent salaries, insurance, software subscriptions, loan payments. Costs that scale with each sale are variable.
Why does my break-even point look impossible?
Usually because the contribution margin is tiny. If price and variable cost are close, each sale contributes almost nothing to fixed costs, and even a small price increase can transform the result.
What if price is below variable cost?
There is no break-even point. Every additional unit sold increases the loss, so the price or the cost structure has to change first.
Should I include my own salary?
Yes, if you intend to be paid. Leaving the founder salary out of fixed costs is the most common reason a business "breaks even" on paper while running out of cash.