Break-Even Calculator

The break-even point is the number of units you need to sell (or services to deliver) where your total revenue exactly equals your total costs. Below this point you're losing money; above it you're profitable. It's one of the most important numbers for any business or product launch.

Contribution margin is the amount each unit sold contributes toward covering your fixed costs after accounting for its variable cost. It's calculated as price per unit minus variable cost per unit. A higher contribution margin means you need fewer sales to break even. If your contribution margin is negative, you lose money on every sale regardless of volume.

Fixed costs stay the same regardless of how many units you sell: rent, software subscriptions, insurance, salaries. Variable costs change with each unit: materials, packaging, shipping, payment processing fees. Some costs are mixed — identify the portion that scales with volume. When in doubt, categorize costs as fixed for a more conservative break-even estimate.

Three ways: (1) Reduce fixed costs — negotiate rent, cut unnecessary subscriptions, or work from home. (2) Lower variable costs — find cheaper suppliers, reduce packaging, negotiate bulk discounts. (3) Raise prices — if the market supports it, even a small price increase significantly reduces break-even volume because it increases contribution margin.