Enter your fixed costs, variable costs and selling price to find out exactly how many units you need to sell — and how much revenue you need — to break even.
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The break-even point is the level of sales at which your total revenue exactly equals your total costs — you are neither making a profit nor a loss. Every unit sold above the break-even point generates profit. Every unit sold below it means you are still making a loss.
Knowing your break-even point is essential before launching a product or business. It tells you the minimum sales target you must hit just to survive.
The contribution margin is the selling price minus the variable cost per unit. This is the amount each unit sold contributes towards covering your fixed costs — and then generating profit once fixed costs are covered.
A higher contribution margin means you need to sell fewer units to break even.
Break-even units = Fixed costs ÷ (Selling price − Variable cost per unit)
Break-even revenue = Fixed costs ÷ Contribution margin %
Once you know your break-even point, ask yourself:
Use our Profit Margin Calculator alongside this tool to understand how different pricing strategies affect your profitability above the break-even point.