Break Even Calculator: Units and Revenue to Cover Costs

Break-Even Calculator finds the point where a business stops losing money: the number of units at which total revenue exactly equals total cost. Below it you make a loss, above it you make a profit.

The arithmetic rests on one idea, the contribution margin. Each unit sold brings in its price and costs you its variable cost; the difference is what that unit contributes towards the fixed costs. Divide the fixed costs by the contribution per unit and you have the number of units you need. If the contribution is zero or negative, no volume will ever break even, and selling more makes things worse rather than better.

Getting the two cost types right is the whole job. Fixed costs stay the same whether you sell nothing or everything: rent, salaries, insurance, software. Variable costs scale with each sale: materials, packaging, payment fees, shipping. Costs that do both, such as a salesperson on part commission, need splitting between the two, and a cost put in the wrong place moves the answer a long way.

The calculator also shows the margin of safety: how far current or expected sales are above the break-even point, as a percentage. A thin margin of safety means a small drop in sales turns a profit into a loss, which is a more useful thing to know than the break-even figure on its own.

This is arithmetic, not financial advice. It tells you what the numbers do; it cannot tell you whether a decision is right for your circumstances. For anything that matters, check the figures against the actual offer and talk to someone qualified.

Everything is worked out inside your browser. Nothing you enter is uploaded, logged or stored, which matters for the financial calculators in particular: the figures you put into them are nobody else's business.

• Break-even point in units and in revenue
• Contribution margin per unit and as a percentage
• Margin of safety against expected sales
• Profit or loss at any volume you enter
• Says plainly when break-even is impossible at that price
• Works for a product, a service or a project
• Nothing is uploaded

The break-even calculator is used by writers, developers, students, marketers and anyone else who needs the job done once without installing software. Common cases include:

• Pricing a product before launching it
• Deciding whether a new line can carry its own costs
• Showing an investor when the business turns profitable
• Working out how far sales can fall before you are in trouble
• Checking whether a discount still leaves a workable margin