Break-even calculator: find the volume where costs meet revenue
Calculate break-even point in units, break-even revenue, contribution margin, and the volume needed to hit a target profit. Free, no signup, shareable result.
Inputs
Results
How to read this calculation
Contribution Margin = Price − Variable Cost (per unit)
Contribution Margin % = (Contribution Margin ÷ Price) × 100
Break-Even Units = Fixed Costs ÷ Contribution Margin
Break-Even Revenue = Break-Even Units × Price
Units for Target Profit = (Fixed Costs + Target Profit) ÷ Contribution Margin
Break-even is the unit volume where total revenue equals total costs. Below break-even, you lose money on the period. Above break-even, every additional unit contributes its contribution margin directly to profit. This makes contribution margin the most important unit-economic number to understand.
Contribution margin = price minus variable cost per unit. It tells you how much each unit contributes to covering fixed costs and generating profit. A $100 unit with $35 variable cost has a $65 contribution margin (65% margin). Each unit above break-even adds $65 to operating profit.
The fastest way to lower break-even isn't cutting fixed costs — it's raising prices. If contribution margin doubles (from $30 to $60), break-even units drop by 50%. The same effect requires cutting fixed costs by 50%, which is operationally much harder. Pricing power is the highest-leverage break-even lever.
Frequently asked questions
The questions operators most commonly ask about break-even analysis.
What's the difference between fixed costs and variable costs?
Fixed costs don't change with sales volume — rent, salaries, insurance, software subscriptions. Variable costs scale with each unit sold — materials, transaction fees, fulfillment, hourly labor on production. The distinction matters because break-even calculations depend on knowing what scales with volume and what doesn't. Some costs are semi-variable (sales commissions, customer support) — split them proportionally between fixed and variable for accurate break-even math.
What is contribution margin and why does it matter?
Contribution margin is price minus variable cost per unit — the profit each unit contributes to covering fixed costs and generating profit. It's the most important unit-economic metric: each unit above break-even adds exactly its contribution margin to operating profit. Doubling contribution margin halves break-even units required. This is why pricing is more powerful than cost-cutting for most break-even improvements.
How do I lower my break-even point?
Three levers: raise prices (highest impact, fastest), reduce variable costs per unit (supplier negotiation, efficiency improvements), or reduce fixed costs (renegotiate rent, audit subscriptions, headcount discipline). Pricing is usually the highest-leverage lever because contribution margin multiplies through to break-even units proportionally. A 10% price increase typically lowers break-even units by 13-15%.
When should I worry about break-even — startup or established business?
Both, but for different reasons. Startups use break-even to validate the business model and forecast when external funding stops being necessary. Established businesses use break-even to evaluate margin of safety (how far above break-even you operate) and to model price/cost change impacts. Operations close to break-even are fragile; operations running 3x above break-even can absorb significant cost shocks without entering loss territory.
See how much margin of safety your operation has
The audit reviews your unit economics, pricing, and cost structure to identify the fastest path to a healthier break-even point. Free, no signup, no sales call required.
No credit card. No follow-up call unless you ask.