Free tools / Break-even

Break-even calculator.

How many do you have to sell before you make anything? Then two questions most calculators leave out: how many for the profit you actually want, and how far sales could fall from your forecast before you are losing money.

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Rent, salaries, software, insurance: what you pay whether you sell one unit or ten thousand.
The landed cost of the item, plus packaging, delivery and any commission that only happens when you sell one.
UNITS TO BREAK EVEN

The idea

Each unit you sell leaves something behind after its own cost: the contribution. Break-even is the number of contributions it takes to pay the fixed costs. Everything after that is profit.

contribution per unit = price − variable cost
break-even units = fixed costs ÷ contribution per unit

Fixed or variable?

Ask what happens to the cost if you sell nothing next month. If you still pay it, it is fixed. If it disappears, it is variable. Some costs are both: a warehouse is fixed until you outgrow it. Put those where they sit at the volume you are planning for.

Margin of safety

The gap between what you expect to sell and what you must sell, as a share of what you expect. A margin of safety of 40% means sales can fall by two fifths before you lose money. A thin one means the plan only works if everything goes right.

What moves it most

Price, nearly always. A small rise in price goes straight into contribution, while the same percentage cut in variable cost helps less, and fixed costs help least. Try it: raise the price by a little and watch the units fall.

Questions

What if I sell many products?

Work with the average: total variable costs over total units, and the same for price. Or use the contribution ratio, which is contribution as a share of price, and work in revenue instead of units: fixed costs divided by that ratio.

Does this include tax?

Use prices and costs before sales tax or VAT. Profit here is before tax on profits.

What if the variable cost is higher than the price?

Then every sale loses money and there is no break-even: more sales make the loss bigger. The calculator says so instead of showing a negative number.

Is my data sent anywhere?

No. The sums are done in your browser.

Break-even analysis is not part of the product. That is why this tool stands alone.

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