About this tool
Why it exists.
Before launching a product or opening a shop, one question matters: how much do I need to sell before I stop losing money? The break-even point answers it. It is the number of units at which revenue exactly covers fixed and variable costs.
Enter your fixed costs for the period, your price per unit and the variable cost of each unit. The calculator divides fixed costs by the profit per unit, called the contribution, and rounds up to a whole number. Add an optional target profit to see the sales needed to earn it.
How to use it.
- Enter your fixed costs for the period.
- Enter the price per unit and the variable cost per unit.
- Read the units and revenue needed. Add a profit target if you want one.
Good questions.
What counts as a fixed cost?
Costs that do not change with sales in the short term, such as rent, salaries, insurance and software subscriptions.
What counts as a variable cost?
Costs that rise with each unit sold, such as materials, packaging, payment fees and shipping.
Why does the tool say my price is too low?
If the price is not higher than the variable cost, each sale loses money and you can never break even. Raise the price or cut the variable cost.