Why use this calculator
Break-even analysis tells you exactly when your business starts making a profit. It's essential for pricing, budgeting, and assessing business viability.
How to use it
Enter your total fixed costs (rent, salaries, etc.), the selling price per unit, and the variable cost to produce/acquire each unit.
The formula
Break-Even Units = Fixed Costs / (Price Per Unit - Variable Cost Per Unit). Contribution Margin = Price - Variable Cost.
Worked examples
$10,000 fixed costs, $50 price, $20 variable cost
334 units to break even, $16,700 in revenue
When people use it
- New product launch planning
- Pricing strategy
- Business plan development
- Startup viability assessment
Tips
- Lower fixed costs or increase margins to break even faster
- Consider multiple break-even scenarios (best/worst/expected case)
- Include ALL fixed costs — don't forget insurance, subscriptions, depreciation
Questions people ask
- What are fixed vs variable costs?
- Fixed costs stay the same regardless of sales (rent, salaries, insurance). Variable costs change with production volume (materials, shipping, commissions).