Understand the result
What is a break-even point?
Your break-even point is the sales level where total revenue equals total costs. At this point, the business has covered its fixed and variable expenses but has not yet generated a profit.
Knowing this number gives an owner a measurable revenue floor. It can support pricing decisions, expense planning, sales targets, hiring decisions, and cash-flow conversations.
Break-even formula
Break-even units = Fixed costs ÷ (Selling price per unit − Variable cost per unit)
The amount inside the parentheses is the contribution margin. Each unit sold contributes that amount toward fixed costs and, after break-even, toward profit.
How to use the calculator
- Add recurring fixed costs such as rent, salaried payroll, insurance, subscriptions, and base utilities.
- Enter the average selling price for one product, service, project, or billable unit.
- Enter the costs that rise directly with each unit sold.
- Add expected unit volume and an optional target profit to compare your plan with break-even.
Example
If monthly fixed costs are $10,000, the selling price is $100, and variable cost is $40, each unit contributes $60. The business must sell 166.67 units—rounded up to 167 whole units—to cover its costs.