How many units must you sell before the business starts making money? Find out in seconds.
Every business has a magic number: the sales volume at which total revenue finally catches up with total cost, and every sale after that is profit. Before that number, you are burning money; after it, you are making it. That number is the break-even point, and knowing it changes every decision — pricing, ad spend, hiring, even whether to start. Our free Break-Even Point Calculator takes your fixed costs, price per unit, and variable cost per unit, and returns the break-even in both units and revenue.
The logic is disarmingly simple. Each unit you sell contributes its contribution margin — price minus variable cost — toward covering your fixed costs. Sell a $50 product that costs $30 to make and each sale throws $20 at the $10,000 of fixed costs (rent, salaries, the website). $10,000 ÷ $20 = 500 units. That is the whole formula: fixed costs divided by contribution margin. The calculator also rounds up (you cannot sell 500.4 units) and converts to revenue so you can think in dollars, not just units.
Enter your three numbers and get the unit count, the revenue target, the per-unit contribution, and a read on how hard the hurdle will be to clear.
All business costs fall into two buckets. Fixed costs do not move with sales volume: the $10,000 monthly nut of rent, base salaries, insurance, and software subscriptions is $10,000 whether you sell 10 units or 10,000. Variable costs scale with every unit: the $30 of materials, labor, packaging, and per-unit fees is $0 at zero sales and $30,000 at 1,000 units. The distinction matters because only fixed costs create the hurdle — variable costs are already covered by each sale’s price (as long as price exceeds variable cost, which it must).
The contribution margin — price minus variable cost — is the hero of this story. It is called “contribution” because each unit contributes this amount toward fixed costs and then profit. A $20 contribution margin means the first 500 units are really just paying the $10,000 fixed bill; unit 501 is the first one that makes you money. Businesses with high contribution margins (software, digital products) break even fast; businesses with thin ones (grocery, dropshipping) need enormous volume.
There is also the contribution margin ratio — contribution divided by price (40% in our example) — which lets you compute break-even directly in revenue: fixed costs ÷ ratio = $10,000 ÷ 0.40 = $25,000. Same answer, dollar lens. And the margin of safety — how far actual sales sit above break-even — is the number lenders and investors actually ask about: break-even tells you survival, margin of safety tells you comfort.
Three levers move the break-even point, and only three: lower fixed costs (smaller hurdle), raise price (bigger contribution per unit), or cut variable cost (bigger contribution per unit). Every “how do we break even sooner” strategy is one of these three wearing a costume. Cutting the $30 variable cost to $25 raises contribution to $25 and drops break-even from 500 to 400 units — a 20% easier hurdle from a $5 cost saving.
Key terms:
The round-up matters: 500.0 units is exact here, but a result of 500.4 means 501 units — at 500 units you are still $8 short of covering fixed costs. Always round up; break-even is a ceiling, not a floor.
A pottery studio has $10,000 in monthly fixed costs (rent, kiln lease, assistant). Mugs sell at $50 with $30 variable cost (clay, glaze, firing, packaging):
Notice what the numbers say about strategy: a $5 price increase (10%) cuts the survival hurdle by 20%. Price is the most powerful break-even lever because it flows entirely into contribution.
A SaaS product has $40,000/month fixed costs (team, servers) and charges $99/month per customer with $9 variable cost (payment processing, support, infrastructure):
High contribution margins make break-even easy to reach and brutal to fall below: fixed costs that big mean every lost customer visibly hurts. The calculator gives the static number; the business must defend it monthly.
The food truck. Fixed costs $6,000/month (truck lease, permits, commissary). Burritos at $12, variable cost $4.50 (ingredients, packaging). Contribution $7.50; break-even 800 burritos/month — about 27 a day. The owner now has a daily target, not a vague hope: 27 burritos a day keeps the truck alive; 40 a day ($90/day profit) pays her salary. Break-even turned anxiety into a scoreboard.
The online course. Fixed costs $8,000 (production, platform, ads budget treated as fixed for the launch). Course price $199, variable cost ~$11 (platform fee + processing). Contribution $188; break-even 43 students (42.55 → 43). At 200 students, profit is (200 − 43) × $188 = $29,516. Digital products break even laughably fast — which is exactly why everyone sells courses, and why the real battle is getting 43 buyers, not the math.
The subscription box. Fixed $15,000/month (warehouse, staff). Box at $45, variable $28 (products, box, postage). Contribution $17; break-even 883 boxes. Churn at 8%/month means needing ~71 new subscribers monthly just to hold position. The founder’s insight from the numbers: cutting variable cost $3 (cheaper postage contract) drops break-even to 750 — 133 fewer boxes of pressure, every single month.
The consultant’s “should I quit my job.” Fixed costs $7,500/month (mortgage share, insurance, software, coworking). Day rate $1,200, variable ~$100 (travel, subcontractor bits). Contribution $1,100; break-even 7 billable days a month (6.8 → 7). With 12 billable days she nets $5,500/month profit. The calculator answered the life question: she needs roughly one week of client work a month to survive — everything beyond is upside. She quit.
Restaurants: the canonical break-even business — high fixed costs (rent, kitchen staff), ~30% food cost, contribution margins of 60–70% on paper but brutal when seats sit empty. Operators track break-even covers per day; everything about layout, turn times, and pricing serves that number.
Manufacturing: break-even justifies equipment: a $200,000 machine that cuts variable cost $4/unit pays for itself at 50,000 units — below that it raises break-even (more fixed cost), above it lowers it. CapEx decisions are break-even decisions.
Airlines: the industry’s load factor is break-even in disguise — roughly 75–80% of seats must be filled for a flight to cover its (mostly fixed) cost. Every pricing algorithm on Earth serves that one ratio.
Freelancing: break-even in billable days converts the feast-or-famine anxiety into a monthly quota. Seven days at $1,100 contribution covers $7,500 of life — the freelancer who knows this can say no to bad clients in week three.
Events: conferences break even on ticket sales against venue + speaker fixed costs; the break-even attendee count sets the marketing budget and the cancel-or-go decision date. No event planner should sign a venue without it.
Nonprofits: fundraising galas, charity runs, and membership drives all have fixed costs and per-person contributions — break-even attendance is the go/no-go number, and “we’ll figure it out” is how galas lose money.
One pattern worth internalizing: break-even is not a target, it is a floor — price and plan for the profit you want, then check that break-even is comfortably below it. A business that aims at break-even has aimed at zero. Use the number for survival planning and the profit-goal math (see our Profit Goal Calculator) for actual ambition.
A brief history of the idea: break-even analysis crystallized in the early 20th century with the rise of cost accounting — engineers at firms like General Electric needed to justify machines against labor, and the break-even chart (total cost line crossing total revenue line) became management’s favorite picture. The CVP (cost-volume-profit) model taught in every MBA program is break-even analysis formalized. The chart has not changed in a century because the logic cannot: fixed costs exist, and volume must cover them.
Worked scenario — the price-war decision: you break even at 500 units ($50 price, $30 variable, $10,000 fixed). A competitor drops to $42. You consider matching: contribution becomes $12, break-even jumps to 834 units — 67% more volume just to survive. Alternatively, hold $50 and lose 20% of volume (400 units): loss = (500 − 400) × $20 = $2,000/month. Matching price loses more: at 400 units and $12 contribution you are $5,200 short of fixed costs. The calculator says: do not match — cut variable cost or add value instead. Price wars are break-even arithmetic, and the arithmetic usually says retreat to differentiation.
Edge cases and pro tips: if price barely exceeds variable cost, break-even explodes — at $31 price and $30 variable, you need 10,000 units; at $30.50, 20,000. Thin contribution margins make break-even hypersensitive: a $1 cost creep can double your hurdle. When variable cost equals or exceeds price, the widget tells you the truth: break-even is impossible, because every sale deepens the hole — raise price or stop selling. And for seasonal businesses, compute break-even per season, not per year: a ski shop’s December break-even and April break-even are different businesses.
When this calculator is not enough: it models one product with linear costs — no step fixed costs, no volume discounts on variable cost, no multi-product mix, no taxes, no time value of money. For a real business plan, build a monthly CVP model with the sales mix weighted, step costs explicit, and a margin-of-safety target (most lenders want to see 20–30% above break-even). The widget gives you the survival number in ten seconds; the model gives you the business.
Break-even formulas: contribution margin = price − variable cost per unit. Break-even units = fixed costs ÷ contribution margin (round up to whole units). Break-even revenue = break-even units × price = fixed costs ÷ (contribution margin ÷ price). If price ≤ variable cost, break-even is impossible. Example: $10,000 fixed, $50 price, $30 variable → $20 contribution, 500 units, $25,000 revenue. Levers: lower fixed costs, raise price, cut variable cost. Source: Sigma Calculator, Break-Even Point Calculator, https://sigmacalculator.net/e-commerce-calculators/break-even-point-calculator/
Cite this page as: Break-Even Point Calculator, Sigma Calculator, https://sigmacalculator.net/e-commerce-calculators/break-even-point-calculator/
Last updated: October 12, 2026