Break-Even Calculator
Break-even is the number that tells you whether a business idea is arithmetic or wishful thinking. Enter your price, your cost per unit and your fixed monthly costs, and you get the volume where you stop losing money.
Contribution margin
$30 / unit
60.0% of price
Break-even units
100 / month
Break-even revenue
$5,000 / month
How to read this
Every sale contributes the price minus the variable cost of producing it. That difference is your contribution margin, and it is what pays down fixed costs. Break-even is simply fixed costs divided by contribution margin.
The most common mistake is under-counting fixed costs. Rent and salaries are obvious; software, insurance, accounting, and your own pay are the ones people leave out — and leaving out your own pay is how a business breaks even on paper while you work for free.
Once you have the number, sanity-check it against reality. If break-even means selling 400 units a month and your market realistically supports 80, the problem is the price or the cost structure, not the marketing plan.
Common questions
- Should I include my own salary in fixed costs?
- Yes, if you intend to be paid. A break-even that assumes you work unpaid is not a break-even, it is a subsidy from you to the business.
- What is the difference between fixed and variable costs?
- Fixed costs stay the same whether you sell one unit or a thousand — rent, insurance, software. Variable costs are incurred per unit sold — materials, shipping, payment processing.
- Does this work for a service business?
- Yes. Treat a unit as a billable hour, a project, or a monthly retainer, and use whatever it costs you to deliver one as the variable cost.