Updated · Built and checked by the PlinzoTools team, formulas tested against published sources
Calculate how many units you need to sell to cover fixed and variable costs.
The break-even point is the sales volume at which total revenue exactly equals total costs -- below it you're operating at a loss, above it you're profitable. This is the standard cost-volume-profit (CVP) analysis used in business planning.
Enter your fixed costs, price per unit, and variable cost per unit. Break-even units and revenue appear instantly.
Break-Even Units = Fixed Costs / (Price per Unit - Variable Cost per Unit)
The denominator is the contribution margin -- how much each unit sold contributes toward covering fixed costs.
The calculator returns three numbers. Break-Even Units is fixed costs divided by contribution margin. Break-Even Revenue is those units multiplied by your price. The third tile, Contribution Margin, is simply price minus variable cost, shown so you can see how much each sale contributes. Units are displayed with one decimal place, and the tool does not round up for you, so a result of 333.3 units means you need 334 whole units to actually cover costs.
Imagine a hypothetical small online shop making candles. Monthly fixed costs are 2,400 (software, studio rent and a part-time helper). Each candle sells for 18 and has 7.50 of variable cost (wax, jar, label, packaging and payment fees). Contribution margin is 18 minus 7.50, or 10.50. Break-even units are 2,400 divided by 10.50, about 228.6, so 229 candles a month. Break-even revenue is 228.6 times 18, roughly 4,114. Selling 300 candles would then leave about 71 units above break-even, worth around 750 of profit before tax (71 times 10.50 is about 745).
This shows why the extra units after break-even are so valuable: each one adds the full contribution margin to profit, because fixed costs have already been covered.
Break-even analysis assumes that price and unit variable cost stay constant regardless of volume, and that fixed costs do not step up as you grow. In real life, discounts, bulk purchasing and the need to hire more staff at higher volumes break these assumptions. It also does not consider timing, so a business can be above break-even on paper and still run short of cash. Treat the output as a planning estimate and a starting point for discussion, and speak with an accountant for decisions involving loans, investors or tax.
Compare the break-even figure to a realistic sales forecast. If you expect to sell far more than break-even, you have a comfortable safety margin. If you would need to sell more than the market or your capacity allows, revisit pricing, costs or the idea itself before committing money.
You'd lose money on every unit sold, no matter the volume -- break-even is mathematically impossible until pricing or costs change.
Round up. If the result shows 228.6 units, selling 228 leaves you slightly short of covering fixed costs, so plan for 229.
Add the profit you want to earn in the period to your fixed costs, then run the calculation. The result is the number of units needed to cover costs and reach that target, before tax.
Because price per unit must be greater than variable cost per unit. Otherwise each sale adds nothing toward fixed costs, and break-even cannot be reached.
No. A unit can be a subscription month, a billable hour, a booking or any repeatable sale, as long as price and variable cost are expressed per that same unit.
Reference: Consumer Financial Protection Bureau