Break-even calculator
How much you have to sell before the business earns anything — and how much room you have.
Runs entirely in your browser. Nothing you paste is uploaded or stored.
Rent, salaries, software, insurance — everything you pay whether you sell nothing or everything.
Cost per unit is only what a single extra sale costs you: materials, shipping, payment fees, the freelancer who fulfils it. A salary belongs above, in fixed costs.
That is about 4 sales a day before the business earns anything. Every sale after that adds $37 of profit, because the fixed costs are already covered.
What this tool does
It answers the first question any business plan has to survive: how much has to be sold before anything is earned. Then it converts that into a daily figure, because “we need 82 sales a month” and “we need three sales a day” produce very different reactions in a planning meeting.
If you enter what you actually sell, it also gives you the margin of safety — how far sales can fall before the business is losing money again.
The classification that decides the answer
Everything depends on which side of the line a cost sits, and there is one reliable test: does this cost exist because of one more sale? If yes, it is variable. If it would be paid anyway this month with zero sales, it is fixed.
A designer on salary is fixed. The same designer paid per project is variable. Payment processing at 2.9% is variable. The software subscription that processes those payments is fixed. Getting this wrong moves the break-even point substantially, always in the comfortable direction.
What to do with the number
If break-even is far above current sales, the fastest lever is usually price, not volume. A price increase flows almost entirely into contribution margin, while extra sales cost marketing money to obtain.
If break-even is comfortably below sales, the number to watch becomes the margin of safety. A business at 8% above break-even is one lost client away from a loss, regardless of how healthy the profit looks in absolute terms.
If contribution margin is zero or negative, stop. No amount of volume fixes it — each additional sale increases the loss. That is the one case where growth is the problem rather than the solution.
Questions
What counts as a fixed cost and what is variable?
A variable cost is one that exists only because you made one more sale — materials, shipping, payment processing, a per-order fulfilment fee. Everything else is fixed, including salaries, rent and software, even though they change over time. Putting a salary in the variable column is the most common way this calculation comes out wrong and flattering.
What is contribution margin?
Price minus variable cost: the amount each sale contributes towards covering fixed costs, and, once those are covered, towards profit. Break-even is simply fixed costs divided by contribution margin.
Why does raising the price beat selling more?
Because a price increase goes almost entirely into contribution, while an extra sale only adds one contribution margin. If your margin is 75%, adding one unit to the price improves each sale as much as selling 1.3 extra units — and it costs no marketing.
What is the margin of safety?
The gap between what you sell now and your break-even point, as a percentage. It answers a question no other number does: how much can sales fall before this business stops paying for itself. Under 20% is uncomfortably tight for anything seasonal.
Does it work for services?
Yes — treat one billable engagement as a unit. The variable cost is whatever a single extra project costs in subcontractors, licences or travel. If nothing varies per project, the contribution equals the price, and break-even is simply fixed costs divided by your fee.