Break-Even Calculator
Find out exactly how many units you need to sell to cover your costs and start making a profit.
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Break-even point
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What is break-even analysis?
The break-even point is the level of sales at which your total revenue equals your total costs — you're neither making a profit nor a loss. Every unit sold beyond this point generates profit. Knowing your break-even point is essential before launching a product, setting prices, or seeking investment, because it tells you the minimum sales you need to survive.
Break-even formula
Break-even units = Fixed Costs ÷ (Selling Price − Variable Cost)
The denominator (Selling Price − Variable Cost) is called the contribution margin per unit — the amount each sale contributes towards covering your fixed costs, and then to profit.
How to lower your break-even point
- Reduce fixed costs — renegotiate rent, optimise staffing
- Increase selling price (if the market allows)
- Lower variable costs — better supplier rates, bulk buying
- Improve your product mix towards higher-margin items
Frequently asked questions
Why is break-even analysis important?
It tells you the minimum sales needed to avoid losses, helps you set realistic targets, supports pricing decisions, and is essential for business plans and loan applications.
What's the difference between fixed and variable costs?
Fixed costs (rent, salaries, insurance) stay the same regardless of how much you sell. Variable costs (raw materials, packaging, commissions) increase with each unit sold.
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