Break-Even Calculator

Use this free Break-Even Calculator to find out how many units you need to sell to cover your costs and start making a profit.

What Is the Break-Even Point? (Break-Even Calculator)

The break-even point represents the number of units or amount of revenue required to cover all your fixed and variable costs. At this point, your total revenue equals your total costs — meaning there is no profit or loss.

Understanding your break-even point is crucial for pricing, planning, and decision-making in any business. It helps you know when your business will start generating profit.

How to Calculate the Break-Even Point

The break-even point formula is simple:

Break-Even Point (units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)

Example:
If your fixed costs are $5,000, your selling price per unit is $50, and your variable cost per unit is $30, then:
Break-Even Point = 5,000 / (50 – 30) = 250 units

Why the Break-Even Point Is Important

• Helps determine minimum sales targets.
• Assists in pricing strategy and cost control.
• Reduces financial risk by clarifying profit thresholds.
• Useful for financial projections and business planning.

Break-Even Analysis in Business

A break-even analysis helps business owners and managers understand how changes in price, costs, or volume affect profitability. It’s a vital tool in decision-making, especially before launching a new product or entering a new market.

By knowing your break-even point, you can set realistic goals, evaluate scenarios, and identify where cost reductions or price adjustments could improve profitability.

Related Financial Metrics

• Profit Margin – measures profit as a percentage of sales.
• Markup – shows how much above cost you sell a product.
• ROI (Return on Investment) – indicates how efficiently you generate returns from your investments.