Break-Even Calculator

Calculate break-even point in units and revenue. Understand when your business becomes profitable.

Contribution Margin
$contributionMargin
Revenue per unit after variable costs
Break-Even Units
breakEvenUnits
Units to sell to break even
Break-Even Revenue
$breakEvenRevenue
Revenue needed to break even
Contribution Margin %
contributionMarginRatio%
Percentage of each sale after variable costs
💡 Break-Even Insights
• Break-even is when total revenue equals total costs
• Contribution margin = Price - Variable costs per unit
• Break-even units = Fixed costs / Contribution margin
• Lower fixed costs reduce break-even point
• Higher prices or lower variable costs improve margins

Break-Even Analysis

Break-even analysis determines when your business becomes profitable.

Formula

Break-Even Units = Fixed Costs / (Price - Variable Cost)

Understanding the Calculation

Fixed Costs: Expenses that don't change with production volume (rent, salaries, insurance).

Variable Costs: Expenses that increase with each unit produced (materials, shipping, commissions).

Contribution Margin: Amount each sale contributes to covering fixed costs and profit.

Example

SaaS company with $50k monthly fixed costs, $20 variable cost per customer, $50 monthly price:

  • Contribution margin: $50 - $20 = $30
  • Break-even customers: $50,000 / $30 = 1,667 customers
  • Break-even revenue: 1,667 × $50 = $83,333/month

Frequently Asked Questions

What is break-even analysis?

Break-even analysis calculates when total revenue equals total costs (profit = $0). Formula: Break-even units = Fixed costs / (Price - Variable cost per unit). Example: $50k fixed costs, $50 price, $20 variable cost = 1,667 units to break even. Below break-even you lose money, above it you profit.

How do I lower my break-even point?

Four strategies: 1) Reduce fixed costs (renegotiate rent, automate operations), 2) Lower variable costs (better suppliers, economies of scale), 3) Increase prices (value-based pricing, premium positioning), 4) Improve contribution margin (higher prices and lower variable costs). Focus on contribution margin first.

What is contribution margin?

Contribution margin is revenue remaining after variable costs, used to cover fixed costs and generate profit. Formula: Price - Variable cost per unit. Example: $50 price - $20 variable cost = $30 contribution margin. Each unit sold contributes $30 toward fixed costs and profit. CM ratio = (CM / Price) × 100.

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