Break-Even Analysis Calculator
Find exactly how many units you need to sell to cover all costs — and see your profit potential beyond break-even.
How Break-Even Analysis Works
Break-even is the point where revenue exactly equals total costs. The formula is simple: Fixed Costs ÷ Contribution Margin per Unit. If your fixed costs are $10,000/month and each unit contributes $30 after variable costs, you need to sell 334 units to break even. Every unit beyond that is pure profit at the contribution margin rate.
Using Break-Even for Business Decisions
Break-even analysis answers critical questions: Can you realistically hit break-even given your market? What happens if you raise prices 10%? How many units can you cut before you lose money? These scenarios help entrepreneurs stress-test their business model before committing capital.
Margin of Safety
Margin of safety is how far current sales exceed break-even: (Current Sales - Break-Even Sales) ÷ Current Sales. A 30% margin of safety means sales can drop 30% before the business loses money. Healthy businesses target 25–40% margin of safety as a buffer against economic downturns.