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Free Break-Even
Calculator
Find out exactly how many units you need to sell to cover your costs. See your break-even point, timeline, and a visual chart instantly.
Why Use This Calculator
Understand when your business turns profitable
Know your minimum sales target
See exactly how many units you need to sell to cover all costs — so you can set realistic revenue goals from day one.
Evaluate pricing decisions
Test different price points and cost structures to see how they affect your break-even timeline before committing.
Plan with confidence
Understand when your business becomes profitable and use that insight to plan inventory, hiring, and marketing spend.
What is Break-Even Analysis?
Break-even analysis is a financial calculation that tells you how many units you need to sell — or how much revenue you need to earn — to cover all of your business costs. At the break-even point, your total revenue exactly equals your total costs: you’re not making a profit, but you’re not losing money either.
Every unit sold beyond the break-even point generates profit, while every unit below it represents a loss. Understanding this threshold is essential for pricing decisions, cost planning, and evaluating whether a new product or business idea is financially viable.
Break-even analysis is one of the most widely used tools in business planning. Startups use it to validate ideas, established businesses use it to evaluate new product lines, and investors use it to assess risk.
Break-Even Point Formula
Break-Even Point (units)
Fixed Costs ÷ (Selling Price − Variable Cost per Unit)
Break-Even Revenue
Break-Even Units × Selling Price per Unit
Contribution Margin
Selling Price per Unit − Variable Cost per Unit
Time to Break Even
Break-Even Units ÷ Monthly Sales Volume
For example, if your fixed costs are $10,000/month, your variable cost is $20 per unit, and you sell each unit for $50, your contribution margin is $30. You’d need to sell 334 units ($16,700 in revenue) to break even. At 100 units per month, that’s about 3.3 months.
Fixed Costs vs. Variable Costs
Understanding the difference between fixed and variable costs is the foundation of break-even analysis.
Fixed Costs
Stay the same regardless of how many units you sell:
- •Rent and lease payments
- •Salaries and wages
- •Insurance premiums
- •Loan repayments
- •Software subscriptions
Variable Costs
Change with each unit produced or sold:
- •Raw materials
- •Shipping and packaging
- •Sales commissions
- •Payment processing fees
- •Direct labor (per unit)
The key insight: higher fixed costs mean you need more volume to break even, while higher variable costs reduce your contribution margin and also push the break-even point higher. Lowering either type of cost brings you closer to profitability.
How to Use Break-Even Analysis
Break-even analysis is more than a one-time calculation. Here are practical ways to apply it in your business:
Pricing decisions: Test different price points to see how they affect your break-even volume. A small price increase can significantly reduce the number of units you need to sell.
New product evaluation: Before launching a new product, estimate your fixed and variable costs to see if the break-even point is achievable given your expected sales volume.
Cost reduction planning: Identify which costs have the biggest impact on your break-even point. Reducing variable costs lowers your break-even for every unit, while cutting fixed costs reduces the overall threshold.
Investor conversations: A clear break-even analysis shows investors you understand your unit economics and have a realistic path to profitability.
Frequently Asked Questions
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