Break-Even Calculator

The break-even point is where total revenue equals total cost — the sales volume at which a business stops losing money and starts making it. In units it is fixed costs divided by the contribution margin per unit, where contribution margin is price minus variable cost per unit.

Getting the cost split right is the whole exercise. Fixed costs do not change with volume: rent, salaried staff, insurance, software subscriptions. Variable costs scale with each unit sold: materials, payment processing fees, per-unit shipping, hourly labour tied to production. Misclassifying a cost moves the break-even point in a way that is easy to miss and expensive to discover. Semi-variable costs — a base fee plus usage — need splitting across both categories rather than being forced into one.

Contribution margin is the more useful number to watch day to day. It tells you what each additional sale contributes toward covering fixed costs, and once fixed costs are covered, every further unit's contribution margin drops to profit. A business with a thin contribution margin needs high volume to break even and is fragile to small price changes; one with a wide margin breaks even sooner and absorbs shocks better.

Note what the model omits. It assumes a constant price and constant variable cost per unit, which volume discounts, bulk purchasing, and tiered pricing all violate. It also ignores timing — break-even is a volume, not a date, and a business can be above break-even on paper while running out of cash because receivables arrive after payables are due. Profitability and solvency are different questions. Everything runs in your browser — no login, no upload, and no figure you enter leaves the page.