Break-Even Calculator

The break-even point is the number of units you need to sell (or revenue you need to generate) to exactly cover all your costs — neither making a profit nor a loss. Below this point you are making a loss; above it you are making a profit.

Break-even units = Fixed Costs ÷ (Selling Price per Unit − Variable Cost per Unit). The denominator is called the contribution margin — the amount each unit sold contributes towards covering fixed costs. Our calculator computes this instantly.

Fixed costs stay the same regardless of how many units you sell — rent, salaries, insurance, software subscriptions. Variable costs change with each unit sold — raw materials, packaging, shipping, payment processing fees. Knowing both is essential for accurate break-even analysis.

Enter your fixed costs and variable cost per unit, then experiment with different selling prices to see how your break-even point changes. A higher selling price reduces your break-even point — meaning you need fewer sales to become profitable. Use this alongside our profit margin calculator to find the optimal price.

Contribution margin = Selling Price − Variable Cost per Unit. It is the amount each unit sold contributes toward covering your fixed costs. Once total contributions exceed your fixed costs, every additional unit sold is pure profit. A higher contribution margin means you reach break-even faster.

Fixed costs are expenses that remain constant regardless of how many units you sell. Common examples include: rent and rates (£500–£5,000/month), business insurance (£500–£2,000/year), software subscriptions, salaries for permanent staff, and loan repayments. These costs must be covered before your business makes any profit.

Break-even analysis tells you the minimum performance your business needs to survive. It answers critical questions: Can this business model work at realistic sales volumes? What happens if we raise or lower prices? How many units do we need to sell to justify a new hire or piece of equipment? Run multiple break-even scenarios before committing to any major cost.