How to Find Your Break-Even Point
The break-even point tells you how much you must sell to cover costs. Here is the formula and how to use it to price products and plan a business.
What break-even means
Your break-even point is the sales volume at which total revenue equals total costs — no profit, no loss. Selling one more unit beyond it starts generating profit.
The formula
Break-even units = Fixed Costs ÷ (Price per unit − Variable cost per unit). The denominator is your contribution margin — how much each sale contributes toward covering fixed costs.
If fixed costs are $50,000, you sell at $40, and each unit costs $15 to make, you break even at 50,000 ÷ 25 = 2,000 units.
Why it matters
- It tells you whether a price is viable before you launch.
- It sets a concrete sales target for your team.
- Lowering fixed costs or raising your margin both reduce the units needed.
Run the numbers
Our Break-Even Calculator gives you the unit and revenue targets instantly, and the Profit Margin Calculator helps you set a healthy price.
Try the calculators
Break-Even Calculator
Calculate your break-even point in units and revenue.
Profit Margin Calculator
Calculate gross, operating, and net profit margins for your business.
Markup Calculator
Calculate selling price based on cost and desired markup percentage.
Business Loan Calculator
Estimate monthly payments and total cost for a business loan.