Small Business Break-Even Calculator
Work out how many sales a month it takes to cover your fixed costs, and what that is in revenue — the point where the business stops losing money and starts making it.
Inputs
Result
New to break-even? See it worked on a small shop, step by step.
Planning estimate only. Replace assumptions with your real costs, contracts, taxes, and market conditions.
How it works
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Separate fixed from variable
Rent and salaries do not move with volume. Materials, payment fees and anything consumed per sale do. Putting a variable cost in the fixed box is the mistake that makes break-even look further away than it is.
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Find the contribution per sale
Price minus variable cost. That is what each sale contributes towards the fixed costs, and it is the number the whole calculation turns on — a small change in it moves break-even much further than a small change in fixed costs does.
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Divide
Fixed costs over contribution gives the number of sales. Multiplied by the price, that is the monthly revenue you need before you are earning rather than covering.
Who this is for
Launching a product
Know the number of sales that clears the fixed costs before committing to them, while the commitment is still reversible.
Weighing a price change
A small price rise can move break-even far more than a small cost cut, because the whole rise lands in the contribution.
Deciding on a hire
A salary is a fixed cost. This is how many extra sales a month it needs to pay for itself, which is a more useful question than whether you can afford it today.
Signing a lease
Rent for the term, converted into the units you have to sell to cover it. A lease is easier to judge in sales than in dollars.
Questions
- Why is there no break-even figure?
- Because the variable cost per sale is equal to or higher than the price. Every sale then loses money, so there is no volume at which you break even, and the tool shows a warning instead of a figure. Selling more makes it worse, and the fix is the price or the variable cost, never the quantity.
- What counts as a fixed cost?
- Anything you pay at the same level whether you sell one unit or a thousand: rent, salaries, software, insurance. Costs that scale with each sale are variable and belong in the contribution.
- What if I sell several different products?
- Use a weighted average contribution across your actual sales mix. If the mix shifts, break-even shifts with it, which is why a good month of low-margin sales can still miss.
- Is break-even the same as profitable?
- No. Break-even is where you stop losing money. Everything after it contributes to profit, which is why the distance between break-even and your real volume matters more than the number itself.
- Should I include my own salary?
- If the business has to support you, yes — put it in fixed costs. Otherwise break-even is measuring a business that only survives because you work for free.
- Why is the break-even sales figure not a whole number?
- Because the arithmetic rarely divides evenly, and it is shown to one decimal rather than rounded. Round up when you use it: covering the fixed costs needs the whole of that last sale, not a fraction of it, so the whole-number figure is shown next to it.
- What do the two optional fields do?
- Target monthly profit adds the profit you want to the fixed costs before dividing, so you see how many sales that takes. Sales you make now shows your monthly profit or loss at that volume and how far above break-even you are, as a percentage of those sales. Leave both at zero to ignore them.