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Break-even calculator for a salon

With $5,000 of fixed costs a month, a price of $120.00 and $40.00 of cost per sale, you break even at 63 sales a month ($7,560 of revenue).

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The numbers for these inputs

SalesRevenueTotal costProfit
0$0$5,000-$5,000
13$1,560$5,520-$3,960
26$3,120$6,040-$2,920
39$4,680$6,560-$1,880
52$6,240$7,080-$840
65$7,800$7,600$200
78$9,360$8,120$1,240
91$10,920$8,640$2,280
104$12,480$9,160$3,320
117$14,040$9,680$4,360

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?

63 a month, or $7,560 of revenue, with the numbers above.

What is my margin on each sale?

$80.00, which is 66.67% 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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