Break-even calculator
How many pieces do you need to sell before the month, the year or a new product launch stops costing you money? Enter your fixed costs, your price and what each sale costs you.
Break-even point
34 units
$1,000.00 in sales a month covers $600.00 of fixed costs
- Contribution per unit
- $18.00
- Contribution margin
- 60%
To make $300.00 profit on top, sell 50 units ($1,500.00 in sales).
At 34 units
- Revenue
- $1,020.00
- Total costs
- $1,008.00
- Profit
- $12.00
| Units | Revenue | Total costs | Profit |
|---|---|---|---|
| 0 No sales | $0.00 | $600.00 | -$600.00 |
| 34 Break-even | $1,020.00 | $1,008.00 | $12.00 |
| 50 Profit target | $1,500.00 | $1,200.00 | $300.00 |
| 100 Chart end | $3,000.00 | $1,800.00 | $1,200.00 |
Educational estimates, not financial advice.
Fixed costs, contribution and the break-even point
Fixed costs are the bills you pay whether you sell one piece or a hundred: studio rent, software, insurance, a market stall. Variable costs arrive with each sale: materials, packaging, transaction fees. What is left of the price after variable costs is the contribution each sale makes towards the fixed costs.
Break-even units = fixed costs ÷ (price − variable cost per unit)
Break-even sales = fixed costs ÷ contribution margin
These are the formulas the U.S. Small Business Administration gives. Units are rounded up, because half a sale covers nothing. Add a profit target to see how many more you need.
On the chart, revenue climbs from zero and total costs start at your fixed costs. Where the lines cross you stop losing money; the shading shows loss before that point and profit after it. Move the slider, or point at the chart, to read any number of sales.
Sources
- U.S. Small Business Administration, Calculate your startup costs (break-even point): fixed costs ÷ (price − variable costs) = break-even point in units; break-even point in sales = fixed costs ÷ contribution margin.
Questions
Is my own pay a fixed or a variable cost?
If you pay yourself a set amount each month, treat it as fixed. If you pay yourself per piece, put it in the variable cost per unit. Either way, include it, or breaking even only means the materials are paid for.
What if I sell several different products?
Use an average price and an average cost per unit, weighted by how many of each you sell, or run the calculator for each product with its own share of the fixed costs.
Why does it say never at this price?
When each sale costs as much as its price or more, no sale adds anything towards the fixed costs, so no number of sales breaks even. Raise the price or bring the cost per unit down.