Break-even Calculator

Calculator

Understanding Your Break-Even Point

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This calculator helps you determine how many units you need to sell to cover your total fixed costs. The break-even point is where your business makes neither a profit nor a loss, making it one of the most important metrics in pricing and financial planning.

Understanding your break-even point allows you to set realistic sales targets, evaluate pricing strategies, and assess whether a product or business model is viable. It is especially important for ecommerce businesses, startups, and product-based businesses where cost control is critical.

By entering your fixed costs, selling price, and variable cost per unit, you can quickly see the minimum sales volume required to cover your expenses and move into profitability.

Formula: Break-even Units = Fixed Costs ÷ (Price − Variable Cost)

Result Explanation

The result shows the number of units you must sell to cover your fixed costs. Once you exceed this number, each additional sale contributes to profit.

Key insight: lower variable costs or higher pricing reduces your break-even point significantly.

How this tool works

The calculator finds contribution per unit by subtracting variable cost from price, then divides fixed costs by that contribution to get break-even units. If contribution is zero or negative, break-even cannot be reached because each sale does not cover its variable cost.

Examples

Example: Fixed costs £500, Price £25, Variable cost £10 → Contribution £15 → Break-even = 33.33 units

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FAQ

What is break-even point?

Break-even is the point where total revenue equals total costs, meaning no profit or loss.

Why is break-even important?

It shows the minimum sales required to avoid losses and helps guide pricing decisions.

What happens if contribution is negative?

If price is less than or equal to variable cost, you cannot reach break-even.

Can break-even be negative?

No. If contribution is zero or negative, break-even cannot be reached.

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