Break-Even Point Calculator

Break-even point calculator for small businesses and side hustles

This break-even point calculator helps you work out how many units you need to sell before your business starts covering its total costs. By entering your fixed costs, selling price per unit, and variable cost per unit, you can see where your sales move from loss to profit.

The break-even point is a simple but powerful way to test whether your pricing and cost structure make sense. It shows how sensitive your business is to changes in price, costs, or sales volume, and can guide decisions about promotions, discounts, and cost cutting.

Use this tool when you are planning a new product, checking if an existing product is still viable, or comparing different pricing scenarios. You can quickly adjust the inputs and see how your required sales volume changes.

Assumptions and how to use this calculator

• Fixed costs include expenses that do not change with sales volume, such as rent, salaries, insurance, and software subscriptions.
• Selling price per unit is the price you charge customers for one unit of your product or service.
• Variable cost per unit includes costs that increase with each unit sold, such as materials, packaging, or per unit commissions.
• The calculator assumes that your selling price and variable cost per unit stay constant across all units sold.
• The break-even units result is rounded up to the nearest whole unit, because you cannot sell a fraction of a unit in most cases.

Common questions

What is the break-even point?

The break-even point is the sales volume where your total revenue equals your total costs. At this point you are not making a profit yet, but you are also no longer making a loss. Selling more units beyond this point should start generating profit, assuming your prices and costs remain the same.

What formula does this calculator use?

The calculator uses the standard formula: break-even units = fixed costs divided by (selling price per unit minus variable cost per unit). It then multiplies the break-even units by the selling price to estimate the break-even revenue.

Why does the calculator say the margin per unit must be positive?

If your variable cost per unit is equal to or higher than your selling price per unit, you lose money on every unit sold. In that situation there is no realistic break-even point, because selling more units only increases your losses. You would need to increase your price, reduce variable costs, or both.

Should I include my own salary in fixed costs?

Many owners exclude their own time when they start out, but this can hide the true economics of the business. For a more realistic view, it is better to include a reasonable salary for yourself in fixed costs, even if you are not drawing it yet.

Can I use this for services and not only products?

Yes. Services often have a clear price per job and a variable cost per job, such as travel, materials, or outsourced work. As long as you can estimate a price and variable cost per unit of service, the same break-even logic applies.