Calculate your business break-even point in units and revenue. See how price and costs affect profitability. Free break-even calculator. No signup.
Every business owner needs to know one critical number: how many units do I need to sell — or how much revenue do I need to generate — before I stop losing money. This is your break-even point. Below it you are losing money. Above it every sale contributes to profit. Our calculator shows your break-even in units, revenue, and time based on your actual numbers.
Break-even formula: Fixed costs divided by (selling price minus variable cost per unit) = break-even units. Example: $5,000/month fixed costs, $50 selling price, $20 variable cost: $5,000 / ($50 - $20) = 167 units per month to break even. Revenue break-even: 167 units × $50 = $8,333/month required revenue. Contribution margin: $30 per unit ($50 - $20) — each unit sold contributes $30 toward fixed costs.
Price sensitivity analysis: At $50 price: 167 units to break even. At $60 price: 125 units to break even. At $40 price: 250 units to break even. Raising price 20% reduces break-even units by 25% — powerful leverage. Lowering price 20% increases break-even units by 50% — very risky unless volume can truly increase 50%+. Most businesses under-price — test higher prices before assuming volume requires low prices.
Break-even point is where total revenue equals total costs — the business makes zero profit or loss. Above break-even: each additional unit sold generates pure profit (contribution margin). Below break-even: business is losing money on net basis. Understanding break-even helps set sales targets, make pricing decisions, and determine if the business model is viable at realistic volume levels.
Two ways to lower break-even: Reduce fixed costs: negotiate rent, eliminate non-essential subscriptions, reduce payroll through automation or efficiency. Increase contribution margin: raise prices if market allows, reduce variable costs through better sourcing or process efficiency. Most businesses find it easier to raise prices 5-10% than reduce variable costs the same amount.
Industry benchmarks: Service business (consulting, freelancing): break-even within 3-6 months. Online retail: 6-12 months. Restaurant: 18-36 months. Software or SaaS: 12-24 months. Retail store: 12-24 months. Any business taking over 36 months to break even requires strong capital reserves and clear evidence the model works at scale.
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The Break-Even Analysis Calculator — When Will Your Business Be Profitable? uses the same formulas, rates, and reference data that financial planners, professionals, and government sources publish. Results are estimates intended for planning and education — for situations involving large sums or legal consequences, confirm with a qualified professional before acting.
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