Break-even Point Calculator

Calculate when your business will become profitable. Determine the sales volume needed to cover all costs.

Input Business Data

Rent, salaries, insurance, etc.

Materials, labor, commissions, etc.

Analysis Results

Break-even Units
500
Units to sell
Break-even Sales
$7,500
Revenue needed
Profit Margin 66.67%

Revenue vs. Costs

About Break-even Analysis

The break-even point is a critical financial metric that shows when your business will start making a profit. It's the point where total revenue equals total costs - no profit, no loss.

Why is Break-even Analysis Important?

  • Financial Planning: Helps set realistic sales targets and pricing strategies
  • Risk Assessment: Evaluates the feasibility of new products or business ventures
  • Cost Control: Identifies opportunities to reduce fixed or variable costs
  • Investment Decisions: Guides decisions on scaling operations or entering new markets
  • Performance Monitoring: Tracks progress toward profitability goals

Frequently Asked Questions

What is a break-even point?

The break-even point is the sales volume at which total revenue equals total costs, meaning the business is neither making a profit nor a loss.

How do you calculate the break-even point?

Break-even Point (Units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

What's the difference between fixed and variable costs?

Fixed costs remain constant regardless of production volume (e.g., rent, salaries). Variable costs change with production volume (e.g., materials, shipping).

Is a lower break-even point better?

Generally yes, as it means you need fewer sales to become profitable. This indicates a more resilient business model.