Break-even Calculator
Find the volume and revenue where your business stops losing money. Free, with a visual chart.
Rent, salaries, software — costs that don't scale with volume
Materials, shipping, per-unit fees
Break-even point
278
units · $8,340.00 in revenue
- Contribution / unit
- $18.00
- Contribution margin
- 60.0%
The formula
Break-even is the minimum viable volume — the point at which your product or service stops costing you money. Above it, you're profitable. Below it, you're effectively subsidizing the business with other capital.
The chart plots revenue and total cost as volume grows. The point where the two lines meet is where the business turns profitable.
Contribution margin: the lever that matters
A small change in price or variable cost moves break-even dramatically. If you sell at $30 with $12 variable cost, your contribution is $18 per unit. Drop variable cost to $8 and contribution jumps to $22 — a 22% improvement cuts break-even by the same ratio. Pricing and cost discipline compound in your favor.
Break-even worked example
Scenario: A DTC coffee brand. Fixed costs (staff, warehouse, software): $8,000/month. Sell price per bag: $24. Variable cost per bag (beans, packaging, shipping, transaction fee): $10.
Contribution margin per bag: $24 − $10 = $14
Break-even units: $8,000 ÷ $14 = 572 bags
Break-even revenue: 572 × $24 = $13,728
The brand needs to sell ~572 bags each month just to cover costs. Every bag beyond that is $14 of gross profit.
Common break-even mistakes
- Forgetting payment processing and platform fees. Stripe, PayPal, Shopify, and ad-platform fees are variable costs — include them in variable cost per unit, not fixed.
- Treating marketing as a fixed cost. For scaling businesses, customer acquisition cost (CAC) is effectively variable — it rises with volume. Break-even calculations that treat ads as fixed understate the real threshold.
- Ignoring capacity limits. A break-even of 600 units/month is only meaningful if you can produce, ship, and support 600 units.
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Frequently Asked Questions
Break-even is the sales volume at which total revenue equals total costs — zero profit, zero loss. Above break-even, every additional unit sold is pure profit (minus variable cost). Below it, the business is losing money.
Break-even Units = Fixed Costs ÷ (Price per Unit − Variable Cost per Unit). The denominator is called the 'contribution margin per unit' — what each sale contributes toward covering fixed costs.
Fixed costs stay the same regardless of how much you sell: rent, salaries, software subscriptions, insurance. Variable costs scale with volume: materials, shipping, transaction fees, packaging. A business with high fixed costs and low variable costs has more leverage (and more risk).
Contribution margin is price minus variable cost — the dollars each unit contributes toward fixed costs and eventually profit. Expressed as a percentage, it tells you how fast you can absorb a fixed-cost increase. A 50% contribution margin means half of every dollar of revenue goes to fixed costs and profit.
Three levers: raise price (most impactful if you can sustain it), lower variable costs per unit (supplier renegotiation, lower-cost materials), or reduce fixed costs (subscriptions, staffing, space). Break-even drops sharply with even small price increases because the contribution margin widens.
Yes, but measure in active subscribers rather than units sold. Break-even subscribers = Fixed Costs ÷ (Monthly Price − CAC ÷ Expected Lifetime Months). For SaaS, LTV/CAC and payback period often matter more than static break-even.