Break-Even Point Calculator
Calculate your break-even point in seconds. Discover exactly how many sales you need to cover costs and start making profit. Perfect for startups, small businesses, and entrepreneurs.
Calculate Your Break-Even Point
Enter your business costs and pricing to instantly discover when your business becomes profitable
Start with realistic numbers for your industry, or select "Custom Values" to enter your own.
Rent, salaries, insurance, software subscriptions - costs that stay constant regardless of sales
Materials, shipping, payment processing - costs that increase with each sale
What you charge customers for each unit, product, or service
How to use this calculator
Follow these simple steps to calculate your business break-even point and understand your path to profitability.
What Is Break-Even Analysis?
Break-even analysis is a fundamental business planning tool that helps you determine exactly when your business will become profitable. It calculates the minimum number of units you need to sell to cover all your costs - both fixed and variable.
At the break-even point, your total revenue equals your total costs, meaning you're neither making a profit nor a loss. Every sale beyond this point contributes directly to your profit. Understanding your break-even point is crucial for pricing decisions, budgeting, loan applications, investor presentations, and strategic planning.
- Clear pricing strategy
- 90%
- Better financial planning
- 95%
- Informed business decisions
- 85%
Fixed vs Variable Costs: Complete Breakdown
Understanding the difference between fixed and variable costs is crucial for accurate break-even analysis. Here's how to categorize your business expenses correctly.
Fixed Costs
Expenses that remain constant regardless of how many units you sell. These costs occur whether you sell 0 units or 1000 units per month.
Common Fixed Costs:
- Rent or mortgage payments
- Full-time employee salaries
- Insurance premiums
- Software subscriptions
- Equipment leases
- Professional services (accounting, legal)
Variable Costs
Expenses that change in direct proportion to your sales volume. These costs increase with each unit you produce or sell.
Common Variable Costs:
- Raw materials and inventory
- Packaging and shipping costs
- Payment processing fees
- Sales commissions
- Direct labor costs
- Transaction-based fees
Common Categorization Mistakes
- • Treating part-time or freelance labor as fixed costs (they're usually variable)
- • Including one-time setup costs in monthly fixed costs
- • Forgetting to include payment processing fees in variable costs
- • Not accounting for seasonal variations in costs
Break-Even Analysis for Different Business Types
Every business model has unique considerations for break-even analysis.
Here's how to apply these calculations to your specific industry.
Service Businesses
For service-based businesses, your "unit" might be billable hours, projects, or service packages. Variable costs often include direct labor and materials.
Key Considerations:
- • Hourly rate calculations vs. project-based pricing
- • Time utilization rates (billable vs. non-billable hours)
- • Capacity constraints and scaling limitations
- • Client acquisition costs
Product Businesses
Manufacturing and retail businesses must consider inventory costs, storage, and production capacity in their break-even calculations.
Key Considerations:
- • Inventory holding costs and obsolescence risk
- • Production capacity and economies of scale
- • Seasonal demand variations
- • Supplier payment terms and cash flow
SaaS & Digital
Software and digital product businesses benefit from low marginal costs but must account for customer acquisition and churn rates.
Key Considerations:
- • Customer acquisition cost (CAC) vs. lifetime value (LTV)
- • Monthly recurring revenue (MRR) calculations
- • Churn rate impact on break-even timing
- • Scalability advantages with low variable costs
Strategic planning
Using break-even analysis for business decisions
Break-even analysis isn't just about finding your break-even point. It's a powerful tool for making strategic business decisions and planning your growth.
- Pricing strategy development.
- Test different pricing models and understand how price changes affect your profitability timeline and sales volume requirements.
- Product line profitability.
- Calculate separate break-even points for different products or services to identify which offerings contribute most to your bottom line.
- Market expansion planning.
- Before entering new markets, calculate how many additional sales you'll need to justify the extra fixed costs and market entry expenses.
Investment and loan applications
Investors and lenders want to see that you understand your financial fundamentals. Break-even analysis demonstrates:
Realistic sales projections based on break-even requirements
Understanding of your cost structure and profit margins
Risk assessment and scenario planning capabilities
Timeline for achieving profitability