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Break-even calculator

With $4,000 of fixed costs a month, a price of $25.00 and $10.00 of cost per sale, you break even at 267 sales a month ($6,675 of revenue).

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The numbers for these inputs

SalesRevenueTotal costProfit
0$0$4,000-$4,000
54$1,350$4,540-$3,190
108$2,700$5,080-$2,380
162$4,050$5,620-$1,570
216$5,400$6,160-$760
270$6,750$6,700$50
324$8,100$7,240$860
378$9,450$7,780$1,670
432$10,800$8,320$2,480
486$12,150$8,860$3,290

How it works

Every sale leaves a margin: the price minus the variable cost of making and delivering it. Fixed costs (rent, software, salaries) do not change with sales, so you break even when margin x number of sales equals fixed costs.

Break-even sales = fixed costs / (price - variable cost), rounded up to a whole sale. Below that number you lose money; above it, every extra sale adds one margin to profit.

The chart shows revenue and total cost as lines; they cross at the break-even point. The table lists sales, revenue, total cost and profit around it.

Common mistakes

  • Leaving out your own pay: if the business must also pay you, add it to the fixed costs.
  • Treating a cost that grows with sales (payment fees, packaging, shipping) as fixed.
  • Using the list price when most sales are discounted.
  • Assuming demand: break-even tells you the target, not whether customers will buy that many.

Questions

How many sales do I need to break even?

267 a month, or $6,675 of revenue, with the numbers above.

What is my margin on each sale?

$15.00, which is 60% of the price.

What happens if I raise the price?

Each extra $1 of price adds $1 of margin per sale and lowers the break-even number. Move the price slider to see how fast it falls.

Which costs are fixed and which are variable?

Fixed: rent, subscriptions, salaries, insurance. Variable: ingredients, materials, packaging, shipping and payment fees, which grow with each sale.

Does break-even include tax?

No. It is before tax and before any pay you take from the business.

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