Break-Even Point Calculator
How many units must you sell before you stop losing money?
Enter Your Costs & Price
Input your fixed costs, variable costs per unit, and selling price
Costs that don't change with sales volume
Cost to produce/deliver each unit
Enter your costs and price to see results
How This Calculator Works
Break-even analysis answers one critical question: How many sales do you need before you stop losing money?
The Formula
Break-Even Units = Fixed Costs ÷ (Price per Unit - Variable Cost per Unit)
Breaking It Down
Fixed Costs
These are expenses you pay regardless of sales—rent, salaries, insurance, software subscriptions. If you sell 0 units or 10,000 units, these costs stay the same (at least in the short term).
Variable Costs
These change with each sale—materials, shipping, payment processing fees, production labor. Sell 100 units? You pay 100× the variable cost. Sell 0 units? Variable costs are £0.
Contribution Margin
Price minus variable cost. This is how much each sale "contributes" toward covering your fixed costs. Once fixed costs are covered, contribution becomes pure profit.
Example
If fixed costs are £5,000/month, you sell at £50, and variable costs are £20 per unit, your contribution is £30. Break-even = £5,000 ÷ £30 = 167 units. Sell 166 units? You're still losing money. Sell 168? You're profitable.
When to Use This Calculator
Starting a New Business
Before launching, calculate how many sales you need to survive. If break-even requires 500 units/month but you can only realistically sell 200, you know the business model needs adjusting before you start.
Testing New Products
Will a new product line be viable? Calculate its break-even point. If it's too high relative to expected demand, don't launch it.
Pricing Decisions
See how different prices affect your break-even point. Sometimes a 10% price increase cuts break-even by 25%, making the business much safer.
Cost Reduction Analysis
If you negotiate rent down £500/month, how many fewer sales do you need? The calculator shows you the impact instantly.
Hiring Decisions
Thinking of hiring someone for £30,000/year? That raises fixed costs. How many additional sales do you need to cover that cost?
Investment Planning
If you invest in equipment that cuts variable costs (e.g., from £10 to £7 per unit), but raises fixed costs (loan payment), does your break-even point improve or worsen?
Freelancers & Consultants
Treat each billable hour as a "unit." Calculate how many hours you need to bill each month to cover your fixed costs (software, coworking space, insurance, your minimum living expenses).
Common Mistakes to Avoid
Miscategorizing Costs
The most common error. Rent is fixed. But if you pay a freelancer £50 per unit made, that's variable, not fixed. Payment processing (usually 2-3% of sale price) is variable, not fixed.
Forgetting Semi-Variable Costs
Utilities, shipping, and labor often have both fixed and variable components. Break them down: Base electric bill (fixed) + usage charges (variable). Salaried staff (fixed) + overtime pay (variable).
Ignoring Capacity Constraints
Your break-even might be 3,000 units/month, but can you physically produce that many? If your max capacity is 2,500, you'll never break even without raising prices or cutting costs.
Using Unrealistic Timeframes
If you input monthly fixed costs, make sure your expected sales are also monthly. Mixing annual costs with monthly sales gives nonsense results.
Assuming Linear Scaling
Break-even analysis assumes costs stay constant. In reality, selling 10,000 units might let you negotiate better supplier prices (lower variable costs) or require hiring someone (higher fixed costs). Recalculate as you scale.
Targeting Exactly Break-Even
Break-even is the danger zone, not the goal. Aim to operate at 40-60% ABOVE break-even. This gives you a profit buffer for bad months, unexpected costs, and growth investment.
Forgetting Time to Break-Even
It's not just "how many units," but "how long to sell that many." If break-even is 200 units and you sell 50/month, you need 4 months—and 4 months of cash reserves—to survive.