Break-even Analyzer
Understand how much your business needs to sell each month to cover its costs — and when it can begin generating a profit.
Find your break-even point
Estimate how many units you need to sell each month before your business covers its fixed and variable costs. You do not need exact numbers — use your best reasonable estimate.
Break-even is the point where your business has generated enough sales to cover its fixed and variable costs. At this point, you are roughly at $0 profit and $0 loss.
In simple terms, it answers: “How much do I need to sell before the business starts making a profit?”
Start with a typical month. Estimate what you charge for one unit, what it costs to provide that unit, and what the business must pay each month regardless of how many units you sell.
Costs that generally do not change directly with the number of units sold. Think about what the business would still need to pay during a month with very few sales.
The cost that increases when you produce, sell, or deliver another unit.
The amount you expect to receive for one unit of your product or service.
Some costs are partly fixed and partly variable. Place each cost where it most closely fits based on how it behaves in your business.
1. Fixed costs
Enter your typical monthly costs that generally continue even when sales are low.
What goes here?
Example: If monthly rent is $1,200, enter $1,200.
If you do not have this cost, enter $0.
What goes here?
Example: If expected monthly staff cost is $1,500, enter $1,500.
If you do not have staff costs, enter $0.
What goes here?
Example: If you expect to take $800 per month, enter $800.
If you do not plan to take money from the business at first, enter $0.
Why consider this? A business can cover its expenses while still not providing enough money for the owner to support themselves. Including owner pay gives you a more realistic view of the sales needed to sustain the business.
What goes here?
If you do not have a separate utility cost, enter $0.
What goes here?
If you do not expect a separate business cost for internet or phone, enter $0.
What goes here?
If you do not have paid business software or subscriptions, enter $0.
What goes here?
If you do not expect an insurance cost at this stage, enter $0.
What goes here?
If you do not expect recurring costs in this category, enter $0.
What goes here?
If you do not have business loan or financing payments, enter $0.
What goes here?
Examples: Cleaning contracts, equipment leases, recurring service fees, or other overhead.
If there are no other recurring fixed costs, enter $0.
2. Selling price & variable cost
These two numbers describe what happens with each unit you sell.
What goes here?
Examples: Materials, ingredients, packaging, transaction fees, delivery costs, or other costs that increase as you sell more.
Example: If you sell a product for about $9 and materials and packaging cost about $3.50 per unit, enter $3.50.
If you expect no variable cost per unit, enter $0. Make sure you have considered costs that increase with each sale.
What goes here?
Example: If you sell a product for $9 each, enter $9.
For a service business, define what counts as one unit first. This could be one service, one consultation, one project, or another consistent measure.
Why consider this? Your price directly affects how much each sale can contribute toward covering fixed costs.
For example, one unit could be one product, one service, one consultation, one project, or one client-month.
3. Expected sales
Estimate how many units you realistically expect to sell in a typical month. This is used to compare your expected sales with break-even.
What goes here?
Think about: Customers, purchase frequency, operating hours, production or service capacity, and planned marketing and sales activity.
If you are not ready to estimate monthly sales yet, you can enter 0.
Do not automatically use your best-case sales estimate. A conservative estimate can make this comparison more useful.
Optional: target profit
Break-even represents approximately $0 profit. If you have a profit goal, use it to estimate the sales level you would need beyond break-even.
What goes here?
Example: If you want the business to generate $2,000 per month after these costs, enter $2,000.
Why consider this? Break-even only tells you when the business reaches approximately $0 profit. A target profit helps you think about the sales level needed to make the business financially worthwhile to you.
Enter $0 if you only want to focus on break-even.
Why calculate break-even?
Break-even analysis helps you connect your costs, pricing, and expected sales volume. Instead of asking only whether a product has a good price, you can ask how many sales are needed before the business covers its costs.
This makes an important business assumption easier to see: how much do I actually need to sell?
Break-even is not a prediction of what will happen. It is a way to test whether your current assumptions about price, costs, and sales volume fit together.
How the calculation works
The calculator uses three core ideas: fixed costs, variable cost per unit, and selling price per unit.
Selling price − Variable cost per unit
Step 2 — Break-even units
Fixed costs ÷ Contribution per unit
Step 3 — Break-even revenue
Break-even units × Selling price
The key idea is that the selling price does not all go toward covering fixed costs. The variable cost is first associated with the sale. What remains is the contribution available to cover fixed costs and eventually produce profit.
What the result means
If your expected monthly sales are above the break-even point, your current estimates suggest that your sales volume is sufficient to cover the fixed and variable costs included in this calculation.
If expected sales are below break-even, the business would need more sales, a different price, lower costs, or some combination of these to reach the break-even level.
What break-even does not tell you
Reaching break-even does not mean the business is automatically a good investment. It only indicates the point at which the costs included in the calculation are covered.
Actual results may differ because prices, costs, sales volume, taxes, financing, capacity, and other conditions can change. Some costs may also behave partly as fixed and partly as variable.
A target-profit estimate is also only a planning scenario. It assumes the price, variable cost, and fixed costs you entered remain reasonably consistent.
What can you change?
If your break-even point feels too high, examine the assumptions behind it rather than treating the result as a fixed answer.
Each sale may contribute more toward covering fixed costs.
More of each sale can remain available to cover fixed costs.
Fewer contribution dollars are needed to cover recurring overhead.
More units can contribute toward covering fixed costs and then profit.
This tool provides estimates based on the information entered. It is intended to support thinking and planning, not replace professional accounting, tax, legal, financial, or other advice.