Enter your fixed costs, selling price per unit, and variable cost per unit. Find the exact number of units and revenue needed to cover all costs — your break-even point.
Don't just find break-even — find out how many units you need to sell to hit any profit goal. Enter multiple profit targets to compare what it takes to reach each one.
Compare up to 4 different selling prices with the same fixed and variable costs. See which price gives the best break-even point and why. Essential before a price change.
Know your break-even and current/projected sales? Find your margin of safety (how far sales can drop before losses), and operating leverage (how sensitive profits are to sales changes).
The most common break-even mistake is putting costs in the wrong category. Here's a quick reference guide by business type.
| Business Type | Typical Fixed Costs | Typical Variable Costs |
|---|---|---|
| Retail / E-commerce | Rent, salaried staff, website hosting, insurance, loan payments | Product COGS, per-order shipping, payment processing (2.9%), returns handling, packaging |
| Restaurant / Café | Rent, equipment leases, salaried management, utilities base | Food cost (28–35% of revenue), hourly service staff, disposables, delivery platform fees |
| SaaS / Software | Engineering salaries, office/hosting infrastructure, marketing budget, legal | Payment processing, customer support per ticket, cloud compute per user (if variable) |
| Consulting / Services | Office rent, admin salaries, software tools, insurance, marketing | Contractor/freelancer costs per project, travel per engagement, materials per job |
| Manufacturing | Factory rent, equipment depreciation, salaried supervisors, QA fixed costs | Raw materials per unit, hourly production labour, energy usage per unit, outbound shipping |
Break-Even Analysis — Formulas, Examples & How to Use It
Break-even analysis is one of the most fundamental business calculations — it tells you exactly when a product, project, or business stops losing money and starts generating profit.
The Core Break-Even Formula
Break-Even Units = Fixed Costs ÷ Contribution Margin per Unit
Contribution Margin = Selling Price − Variable Cost per Unit
Example: $5,000 fixed costs, sell at $50, variable cost $20 → CM = $30. Break-Even = $5,000 ÷ $30 = 167 units.
Break-Even Revenue
Break-Even Revenue = Fixed Costs ÷ Contribution Margin Ratio
CM Ratio = CM per Unit ÷ Selling Price = $30 ÷ $50 = 60%
Break-Even Revenue = $5,000 ÷ 0.60 = $8,333. (Check: 167 units × $50 = $8,350 — minor rounding difference.)
Profit Target Formula
Target Units = (Fixed Costs + Target Profit) ÷ CM per Unit
To make $3,000 profit: ($5,000 + $3,000) ÷ $30 = 267 units. Target Revenue = 267 × $50 = $13,350.
Margin of Safety
MoS % = (Actual Sales − Break-Even Sales) ÷ Actual Sales × 100
If you sell 250 units and break-even is 167 units: MoS = (250 − 167) ÷ 250 × 100 = 33.2%. Sales can drop 33% before you start losing money. Below 15% is risky; above 30% is comfortable.
Operating Leverage
OL = Total Contribution Margin ÷ Operating Profit
At 250 units: CM = 250 × $30 = $7,500. Operating Profit = $7,500 − $5,000 = $2,500. OL = $7,500 ÷ $2,500 = 3×. A 10% increase in sales produces a 30% increase in profit. A 10% drop produces a 30% profit decline.
How Break-Even Relates to Markup and Pricing
Break-even revenue = Fixed Costs ÷ Gross Margin %. Higher markup → higher gross margin → lower break-even revenue. If your gross margin is 40% and fixed costs are $10,000, you need $25,000 revenue to break even. At 60% gross margin you only need $16,667. This is why pricing decisions and break-even analysis must be done together — use our markup calculator to set your price, then confirm it here.