“Break-even” sounds technical, but it’s really just one simple question: how much do you need to sell before you stop losing money and start making it?
The idea in plain terms
Every business has costs that stay roughly the same no matter what (rent, insurance, wages) and costs that go up with each sale (materials, packaging, delivery). Break-even is the point where your total sales cover both — everything you sell after that is profit.
A simple way to think about it
- Add up your regular monthly costs — the ones you pay whether you sell one thing or a hundred.
- Work out how much profit you make on each individual sale, after the cost of making or buying it.
- Divide the first number by the second — that’s roughly how many sales you need each month just to cover your costs.
Why it’s worth knowing
Once you know your break-even number, you can see straight away whether a quiet month is a real problem or just normal ups and downs — and what a realistic sales target actually looks like. It’s one of the simplest numbers in your business, and one of the most useful. We can help you work it out properly for your own numbers.