Break-even
Work out how many units you need to sell, or how much revenue you need, to cover your fixed and variable costs.
Break-even
Work out how many units you need to sell, or how much revenue you need, to cover your fixed and variable costs.
This calculator shows you how many units you need to sell — or how much money you need to bring in — before you start making a profit. Before that point you’re just covering your costs; after it, every extra sale is profit.
It can help you answer questions like:
- Is my price high enough to make this worth doing?
- If my rent or costs go up, how many more sales do I need to stay afloat?
- Is the sales target I’ve set actually realistic?
What you’ll need to enter:
- Fixed costs — the bills that stay the same no matter how much you sell, like rent, wages, insurance and software. (Example: $10,000.)
- Selling price per unit — what you charge for one item or service. (Example: $50.)
- Variable cost per unit — what it costs you to make or deliver one more item, like materials or packaging. (Example: $20.)
How it works
We take your fixed costs and divide them by how much profit you make on each unit (price minus variable cost). That tells you how many units it takes to cover everything.
What the result tells you
With the example numbers above, you’d need to sell about 334 units (around $16,700 in sales) before you start making a profit. Sell more than that and the extra is yours to keep.
A few ways to use this calculator to make better decisions:
- Try different prices. Raise the selling price slightly and watch the number of units you need to sell drop. Example: going from $50 to $55 per unit means fewer sales needed to break even.
- Cut your fixed costs. A smaller office, working from home, or outsourcing admin work can all lower your fixed costs. Example: dropping rent from $2,000 to $1,500 a month saves $6,000 a year, lowering your break-even point.
- Shop around on materials. A cheaper supplier or a bulk discount lowers your variable cost per unit, which means more profit on every sale. Example: saving 50 cents per unit on 1,000 units is $500 back in your pocket.
- Check your sales target is realistic. If the calculator says you need to sell 1,000 units a month, do you actually have the customers and capacity for that?
In short: this isn’t just a number — it’s a quick way to test “what if” scenarios before you commit to a price, a new cost, or a sales target.
Figures and results from these calculators are a general guide only and are not financial or professional advice. Consider getting professional advice, such as from a bookkeeper or accountant, before making decisions based on these results.