Break-Even Calculator

Find out exactly how many units you need to sell to cover all your costs and reach profitability. Our Break-Even Calculator helps you set clear sales targets, plan your pricing strategy, and make informed financial decisions for your business.

Currency

Total Fixed Costs

Variable Cost per Unit

Selling Price per Unit

Break-Even Point (Units)

Break-Even Revenue

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How to Calculate the Break-Even Point

Break-Even Point (Units) =

Fixed Costs

(Selling Price per Unit – Variable Cost per Unit)

Example: With $10,000 in fixed costs, a $50 selling price, and a $20 variable cost, you get:

$10,000 / ($50 - $20) = 334 units

You need to sell 334 units to cover all costs.

Why Break-Even Analysis is Crucial for Business

Strategic Pricing: It shows you how different price points will impact your path to profitability, helping you find the optimal price.
Set Realistic Sales Goals: Knowing your break-even point provides a clear, tangible sales target for your team to aim for.
Assess Viability: Before launching a new product or business, a break-even analysis can determine if the idea is financially feasible.
Manage Costs Effectively: The analysis highlights the impact of your fixed and variable costs, encouraging you to find efficiencies to lower your break-even point.

4 Ways to Lower Your Break-Even Point

Lower Your Fixed Costs: Negotiate rent, audit subscriptions, or find more affordable suppliers.
Reduce Variable Costs: Buy raw materials in bulk, optimize your production process, or find more efficient shipping methods.
Increase Your Selling Price: If the market allows, strategically increasing your price can drastically reduce the number of units you need to sell.
Improve Product Mix: Focus on selling more of your high-contribution-margin products.

Break-Even vs. Other Key Financial Metrics

Metric	What It Measures
Break-Even Point	The point of zero profit, where revenue equals costs.
Contribution Margin	The revenue per unit left over to cover fixed costs (Selling Price - Variable Costs).
Profit Margin	The percentage of revenue that has turned into profit.
Return on Investment (ROI)	The overall profitability of an investment.

Frequently Asked Questions

What is a break-even point?

The break-even point (BEP) is the point at which total costs and total revenue are equal, meaning there is no net loss or gain—you have 'broken even.' It is the minimum number of units you need to sell to cover all your costs before you start making a profit.

How does pricing affect the break-even point?

Pricing has a direct impact on your break-even point. Increasing your selling price per unit increases your contribution margin (the amount each sale contributes to covering fixed costs), which lowers the number of units you need to sell to break even. Conversely, lowering your price increases your break-even point.

Why is break-even analysis important for startups?

For startups, break-even analysis is crucial for validating a business idea's financial viability. It helps set realistic sales goals, create effective pricing strategies, and demonstrate to investors that you have a clear understanding of your cost structure and path to profitability.