📊 Break Even Calculator
Calculate when your business starts making profit
Cost and Pricing Information
💡 What is Break-Even Point?
Break-even point is where total revenue equals total costs - no profit, no loss. After this point, the business starts making profit.
Key Terms:
- Fixed Costs: Costs that don't change with production volume (rent, salaries)
- Variable Costs: Costs that change with production volume (raw materials, packaging)
- Contribution Margin: Difference between selling price and variable cost per unit
Tips:
- Calculate break-even before starting any business
- Review costs and prices regularly
- Try to minimize fixed costs initially
- Increasing contribution margin reduces break-even point
How the Break-Even Calculator Works
The break-even point is the level of sales at which your total revenue exactly covers your total costs, so you make neither a profit nor a loss. This calculator works it out from three inputs: your fixed costs, the selling price per unit, and the variable cost per unit. From these it shows how many units you must sell, and the sales value you must reach, before every additional sale becomes profit.
The key figure behind the result is the contribution margin: the selling price minus the variable cost of each unit. Dividing your fixed costs by this margin gives the break-even quantity. The tool calculates this for you instantly so you can test different prices and cost assumptions.
Why It Matters for Planning
Knowing your break-even point is essential when launching a product, setting prices, or writing a feasibility study for a new business. It tells you the minimum performance needed to survive and helps you judge whether a target is realistic.
Use it to compare scenarios: lowering variable costs or raising the price both reduce the units needed to break even. Treat the output as a planning estimate, and always confirm your real fixed and variable cost figures from your own accounts before making financial decisions.