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Free tool

Break-even calculator

How many sales before you have actually covered your costs - and an honest answer when a price means you never will.

Your numbers

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Rent, wages, subscriptions - what you pay whether you sell or not.

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Stock, materials - the cost of one, not your monthly bills.

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An example: 2,000 of monthly costs, selling at 25 what costs you 10.

You break even at
134 sales
a month, which is 3,350.00 of revenue
Each sale contributes15.00 (60%)
towards fixed costs of2,000.00
Work before tax, in the figures that are really yours. The VAT you charge is not income and the VAT on your costs is usually reclaimable, so leaving tax out keeps the break-even honest. Everything after the break-even point is profit - that is the whole reason the number matters.

Questions

Anything you pay whether or not you sell a thing: rent, wages, a software subscription, insurance, and your own time if you want to be honest about it. Variable cost is the opposite - what each individual sale costs you, like the materials or the stock. Keeping the two apart is the whole calculation.

Because your price is at or below what one sale costs you to make, so each sale brings in nothing towards your fixed costs - or actually loses money. No amount of selling catches up; it only digs the hole deeper. The fix is to charge more than a sale costs you, or to make each one cost less. A calculator that hands you a number here is misleading you.

Because you cannot half-sell your way to covering the rent. If the sums say 133.3 sales, 133 still leaves you short, so you need 134. Small, but it is the difference between covering your costs and not quite.

No. Break-even is the point where you stop losing money - everything after it is profit. Set a profit target in the tool and it will tell you how many more sales that takes on top.

No - work in the figures that are actually yours, before VAT. The VAT you charge is not income and the VAT you pay on costs is usually reclaimable, so leaving tax out keeps the break-even honest. The margin calculator shows how VAT sits on top of a price.

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