Break-Even Calculator
Find exactly how many units you need to sell to cover your costs. Visualize your path to profitability with our interactive chart.
Understanding Break-Even Analysis
A quick guide to the metrics that determine whether your business sinks or swims.
1. Fixed Costs
These are costs that do not change based on how many units you sell. Examples include office rent, salaries of permanent staff, insurance, and fixed software subscriptions. You have to pay these even if you sell zero units.
2. Variable Costs
These costs scale directly with your sales volume. Examples include the raw materials to make your product, packaging, shipping fees, and credit card processing fees (like Stripe or PayPal's cut).
3. Contribution Margin
Calculated as Selling Price - Variable Cost. This is the amount of money each unit "contributes" towards paying off your fixed costs. Once all fixed costs are paid, this margin becomes pure profit.
4. The Break-Even Point
The exact moment your Total Revenue perfectly matches your Total Costs (Fixed + Variable). Any unit sold after this point generates profit. If your variable costs are higher than your selling price, you will never break even!