Find out exactly how many units you need to sell — or how much revenue you need to earn — before your business starts making a profit. Adjust your costs and price, and see the break-even point update in real time.
Pro tip: Your contribution margin percentage is the single most important number here. A 60%+ margin means you break even quickly; below 30% means you need serious volume. Use the what-if slider to find the price point where margin and volume balance.
Enter up to 3 products to find the blended break-even across your product line.
Product A
Product B
Product C
See projected profit or loss at various sales volumes, from 25% to 150% of break-even.
| Volume | Units | Revenue | Total Costs | Profit / Loss |
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How to Use the Break-Even Calculator
Enter three numbers: your monthly fixed costs (rent, salaries, insurance — anything you pay whether you sell zero or a million), variable cost per unit (materials, shipping, packaging for each sale), and selling price per unit. The calculator instantly shows how many units you must sell each month to cover all your costs — your break-even point. Use the what-if slider to see how price changes affect that number.
What Is Break-Even Analysis?
Break-even analysis answers the most fundamental question in business: “How much do I need to sell before I stop losing money?” Below the break-even point, every unit sold still leaves you in the red. Above it, every additional unit generates pure profit (minus its variable cost). The formula is simple: divide fixed costs by the contribution margin per unit (selling price minus variable cost). But the strategic implications run deep — it tells you the minimum viable scale for your product, how risky a new venture is, and where pricing power matters most.
Understanding Contribution Margin
The contribution margin is the slice of each sale that goes toward covering fixed costs and, eventually, profit. If you sell a widget for $35 and it costs $12 to produce, your contribution margin is $23 per unit (65.7%). That $23 “contributes” to paying your $5,000 monthly rent, salaries, and overhead. Once you’ve sold enough widgets for those contributions to total $5,000, you’ve broken even. Higher margins mean fewer sales needed; lower margins demand higher volume.
How Price Changes Move the Break-Even Point
Small price adjustments can dramatically shift your break-even point. A 10% price increase on a $35 product adds $3.50 to your contribution margin — potentially reducing break-even volume by 13% or more. Conversely, discounting erodes margin fast: a 15% discount might require 25–40% more volume to compensate. The what-if slider lets you model these scenarios instantly, so you can find the sweet spot between competitive pricing and sustainable margins.
Fixed vs. Variable Costs in Practice
Getting the cost classification right is critical. Fixed costs stay constant regardless of output: office rent, salaried employees, insurance premiums, software subscriptions, loan payments. Variable costs scale with each unit: raw materials, shipping, payment processing fees, sales commissions, packaging. Some costs are semi-variable — like electricity that has a base charge plus usage — so split them proportionally. The more accurately you classify your costs, the more reliable your break-even number.
Multi-Product Break-Even Analysis
Most businesses sell more than one product. To find the blended break-even, you need to know each product’s price, variable cost, and its percentage of total sales (the “sales mix”). The weighted-average contribution margin combines each product’s margin proportionally, giving you a single break-even target in total units. Subscribers can model up to three products simultaneously and see how shifting the sales mix affects the overall break-even point.
Using Break-Even for Pricing Decisions
Break-even analysis is a powerful negotiation and planning tool. Before launching a product, calculate whether the required volume is realistic for your market size. Before offering a discount to a wholesale buyer, check how many more units you’d need to sell. Before signing a lease that doubles your rent, see how it shifts the break-even target. The profit projection table (available to subscribers) shows exact profit or loss at various sales volumes so you can pressure-test different scenarios before committing.
Looking for related tools? Try our Margin Calculator to calculate profit margins and markups, or our Runway Calculator to find out how long your cash reserves will last. Explore all Freelance & Business tools.