Break-even calculator

Enter three numbers: your monthly fixed costs, your price per sale, and your variable cost per sale. The calculator instantly shows how many sales you need each month to cover your costs, the revenue that represents, and how much each sale contributes toward your overheads. There is nothing to submit and no account to create — the math runs in your browser as you type.

If you want more than survival, open the target-profit field and enter what you want to take home each month. The calculator adds that on top of your fixed costs and shows the sales count that pays both your bills and you. The price-sensitivity line underneath shows how the number moves if you charged 10% more or less — often the single most revealing part.

Your break-even point is the moment revenue covers your total costs — every sale after it is profit, every sale before it is money out of your pocket. It is the first number a lender, investor, or experienced founder will ask about, because it converts an idea (“I’ll sell candles”) into a testable claim (“I need to sell 214 candles a month”).

That framing is what makes it useful. 214 candles a month is roughly 7 a day — you can judge at a glance whether that is realistic for a weekend market stall or demands an online store with paid traffic. If the break-even number looks impossible at your planned price, better to find out now, before you have signed a lease.

The core of the calculation is contribution margin: your price minus your variable cost per sale. That is the slice of every sale left over to chip away at fixed costs. Divide your monthly fixed costs by it and you get your break-even point in units; multiply by price for break-even revenue.

A worked example: you are launching a coffee cart. Fixed costs are $2,400 a month (pitch fees, insurance, an equipment loan). A coffee sells for $5.50 and costs you $1.90 in beans, milk, cup, and card fees. Contribution margin is $3.60, so break-even is 2,400 ÷ 3.60 = 667 coffees a month — about 23 a day, or roughly $3,670 in revenue. Want $2,000 a month of profit on top? (2,400 + 2,000) ÷ 3.60 = 1,223 coffees — around 41 a day. Suddenly the question is no longer “is coffee a good business?” but “can this location do 41 coffees a day?” — a question you can actually answer.

Break-even units

fixed costs ÷ (price − variable cost)

Break-even revenue

break-even units × price

Units for a target profit

(fixed costs + target profit) ÷ (price − variable cost)

Fixed costs are the bills that arrive whether you sell or not: rent, salaries, insurance, software subscriptions, loan payments, your accountant. Variable costs scale with each sale: materials, packaging, shipping, payment-processing fees, marketplace commissions, per-order labour.

The line can blur — utilities creep up when you are busy, and a part-time assistant might be a bit of both. Do not agonize: put anything that mostly tracks sales into variable cost and everything else into fixed costs. If a cost is genuinely mixed, split it between the two. The goal is a realistic planning number, not audited accounts — you can refine the inputs as real invoices come in.

First, sanity-check it against reality: break-even sales ÷ 30 gives your daily target. If your plan cannot plausibly hit it, you have three levers, and the calculator lets you test each in seconds. Raise your price — the sensitivity line shows how strongly break-even reacts, and it is almost always the most powerful lever. Cut variable costs by negotiating with suppliers or trimming packaging and shipping. Or reduce fixed costs — start from home, buy used equipment, delay hiring.

Second, treat it as your first sales target, not a finish line. Break-even keeps the lights on; the target-profit field shows the number that actually pays you a salary. Write both numbers down, then work out where those sales will come from — that is a marketing plan, and it is exactly the part SoGood builds for you.