Break Even Calculator
Break-even Analysis Calculator
Determine your business profitability threshold with precision
Break-even Calculator
Break-even Analysis
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Formula: Break-even Point = Fixed Costs ÷ (Selling Price - Variable Costs)
Contribution Margin: Selling Price - Variable Costs
Understanding Break-even Analysis
The break-even point is where total revenue equals total costs (no profit or loss). Our calculator helps you find this critical business metric:
Break-even Quantity = Fixed Costs ÷ (Selling Price - Variable Costs)
Key Business Metrics Explained
- Fixed Costs: Expenses that remain constant (rent, salaries, insurance)
- Variable Costs: Costs that change with production (materials, packaging)
- Contribution Margin: Amount from each sale contributing to fixed costs
- Margin of Safety: How much sales can drop before hitting break-even
Break-even Analysis FAQs
How often should I calculate break-even?
Monthly for new businesses, quarterly for established ones, or whenever costs/prices change significantly.
Can I use this for service businesses?
Absolutely! Consider "units" as service hours, clients served, or projects completed.
What if my price equals variable costs?
You'll never break even - each sale only covers its own cost without contributing to fixed costs.
Strategies to Improve Your Break-even Point
- Reduce Fixed Costs: Renegotiate leases, outsource non-core functions
- Lower Variable Costs: Bulk purchasing, efficient production
- Increase Prices: Add value to justify higher prices
- Product Mix: Focus on higher-margin products/services
- Operational Efficiency: Streamline processes to reduce waste