Invoicing and finance · Free
Break-even point calculator
Find out how much you need to sell each month to cover your costs. Whatever you sell above that is profit.
Guide
What the break-even point is
The break-even point is the sales volume at which revenue exactly covers all costs. Below it you lose money; above it, every sale adds profit.
In units: fixed costs ÷ contribution margin per unit. In euros: fixed costs ÷ (contribution margin ÷ price).
Example: an online shop
Fixed costs: €8,000 a month (two salaries, warehouse rent, platform). Average selling price: €50. Variable cost per order (product, shipping, payment fee): €20. Contribution margin: €30 per order, 60%.
Break-even: 8,000 ÷ 30 = 267 orders a month, about €13,350 in revenue, or 13 orders per working day.
How to lower your break-even point
You can raise prices, cut variable costs or trim fixed costs. The last is often forgotten: admin done by hand, licences nobody uses or processes that take more people than they should.
How it works
- Add up your monthly fixed costs.
- Enter the selling price and variable cost per unit.
- See how many units and how much revenue you need.
Frequently asked questions
How is the break-even point calculated?
Break-even = fixed costs ÷ (selling price − variable cost per unit). With €8,000 of fixed costs, a €50 price and a €20 variable cost, you need to sell 267 units a month.
What are fixed and variable costs?
Fixed costs do not change with sales: rent, salaries, insurance, software. Variable costs rise with each sale: materials, shipping, payment or sales commissions.
What is contribution margin?
What each sale leaves to pay for fixed costs: price minus variable cost. If it is zero or negative, no sales volume will make the business profitable.
Does it work for a services business?
Use an hour, a project or a monthly fee as the "unit", and what it costs you to deliver it (subcontractors, travel, materials) as the variable cost.
Do you do this every day?
If you merge documents, prepare invoices or copy data between programs every day, that can be automated, and it's what we do.