⚖️ Free Break-Even Calculator — Instant results
Break-Even Point Calculator
Calculate your exact break-even point in units and revenue. Enter fixed costs, selling price and variable costs to know when your business starts making profit.
Break-Even Analysis for Business Planning
Break-even analysis is one of the most important tools for business planning. It tells you the minimum sales needed to avoid a loss.
How to Use Break-Even Analysis
- Pricing decisions: Is your price high enough to cover costs at realistic sales volumes?
- Startup planning: How many months until you reach profitability?
- New product launch: Is the market large enough to reach break-even?
- Cost reduction: How does reducing fixed costs change break-even?
Fixed vs Variable Costs
- Fixed costs: Rent, salaries, insurance — same regardless of sales volume
- Variable costs: Materials, shipping, sales commission — increase with sales
💡 The lower your fixed costs, the lower your break-even point and the faster you become profitable. Many successful startups start lean specifically to achieve early break-even.
Frequently Asked Questions
What is break-even point?
The break-even point is the level of sales at which total revenue equals total costs — you make zero profit but also zero loss. Sales above break-even generate profit. This is a critical metric for pricing and business planning.
How do I calculate break-even point?
Break-Even Units = Fixed Costs ÷ (Selling Price per unit - Variable Cost per unit). The denominator is called the Contribution Margin. Example: Fixed costs AED 50,000 / Contribution AED 100 per unit = 500 units to break even.
What is contribution margin?
Contribution margin is selling price minus variable cost per unit. It shows how much each sale contributes to covering fixed costs and profit. Once break-even is reached, the full contribution margin becomes profit.