Break-Even Calculator

Break-even units = fixed costs ÷ (price per unit − variable cost per unit). If you have $10,000 in fixed costs and earn $30 contribution margin per unit, break-even is 10,000 ÷ 30 ≈ 334 units. Below that, you lose money; above it, you start to profit. Break-even revenue = break-even units × price.

Contribution margin = price per unit − variable cost per unit. It's the amount each sale "contributes" to covering fixed costs and then profit. A $50 product with $20 of variable cost has a $30 (60%) contribution margin. Higher contribution margins mean a lower break-even point and more profit per incremental sale.

Three levers: raise prices (carefully, to avoid losing volume), reduce variable costs (cheaper inputs, better processes), or cut fixed costs (smaller space, lower overhead). A 10% price increase or 10% variable cost reduction usually moves break-even more than a 10% fixed cost cut, because both improve contribution margin on every unit.

Break-even analysis shows the minimum sales needed to avoid a loss, helping price products, evaluate whether to launch, and stress-test business plans. It's also a quick reality check: if break-even requires capturing 10% of a market, the plan is risky; if 0.1% is enough, it's achievable.