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Free Break-Even Calculator for Small Businesses

Find out how many sales a month you need to cover your costs, and how many to reach the profit you want. Results update as you type. Your numbers stay in your browser and are never sent to Instilus.

Enter your monthly fixed costs, price per unit and variable cost per unit to see your break-even point.

An estimate for planning, not financial advice. Profit here is before tax. Commas are read as thousands separators, so use a point for decimals.

How the break-even formula works

Break-even units = fixed costs ÷ (price − variable cost per unit)

Each sale first pays for its own variable costs. What is left, the contribution margin, goes towards the month's fixed costs. Once enough sales have covered the fixed costs, each further sale's contribution is profit.

You cannot sell part of a unit, so a fractional answer is rounded up to the next whole unit.

Worked example

A small online shop has fixed costs of 3,000 a month. It sells a product for 25, and each one costs 10 in materials, packaging and fees.

Contribution margin per unit25 − 10 = 15
Contribution margin %15 ÷ 25 = 60%
Break-even units per month3,000 ÷ 15 = 200
Break-even revenue per month200 × 25 = 5,000
Units for a 1,500 monthly profit(3,000 + 1,500) ÷ 15 = 300

So the shop needs 200 sales a month to cover its costs, and 300 to make 1,500 profit before tax.

Frequently asked questions

What is a break-even point?

It is the level of sales at which total revenue exactly covers total costs, so profit is zero. Below it the business makes a loss; every sale above it adds its contribution margin to profit.

How do you calculate break-even units?

Divide fixed costs by the contribution margin per unit, which is the price minus the variable cost per unit. With fixed costs of 3,000 a month, a price of 25 and a variable cost of 10, break-even is 3,000 ÷ 15 = 200 units a month. If the answer is not a whole number, round up.

What is the difference between fixed and variable costs?

Fixed costs stay the same whatever you sell in the month, such as rent, software subscriptions, insurance and salaries. Variable costs rise with each sale, such as materials, packaging, shipping and payment or marketplace fees.

What if my price is lower than my variable cost?

Then each sale loses money before fixed costs are counted, and no volume of sales will break even. Selling more makes the loss bigger. The price has to rise, or the variable cost per unit has to fall, before a break-even point exists.