Finance

Understanding break-even, with an interactive calculator

The break-even point is the number of sales at which revenue covers all costs. Formula: fixed costs divided by the contribution margin per unit (price minus variable cost). Example: $2,500 in fixed costs and a $35 margin per sale means you need 72 sales per month before you earn your first euro of profit.

Break-even belongs in chapter 8 of your business plan: structure, content and pitfalls →

What the break-even point is

Why this number decides everything: it turns your idea into a concrete, testable target. "72 sales a month" is either plausible for your channel and capacity, or it is not. Most founders who skip this calculation discover the answer only after a year of losses.

The three inputs: your price, your variable costs per unit (everything that only occurs when you sell: materials, shipping, payment fees) and your monthly fixed costs (everything that occurs anyway: rent, tools, insurance).

Run the numbers yourself

Try it yourself

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Price per unit (€)

Variable cost/unit (€)

Fixed costs per month (€)

Contribution margin per unit35 €

71% of the price remains to cover fixed costs

Break-Even

72 sales / month

Equivalent revenue

3,528 € / month

The strongest of the three levers is the price: startup pricing in five steps →

Sanity-checking the number

Sanity check after calculating: divide the break-even quantity by your realistic working days. If a solo founder needs 72 sales a month, that is 3–4 every working day, including acquisition, delivery and admin. Feasible? That question is the real result of the calculator.

Frequently asked questions

What is the difference between fixed and variable costs?

Fixed costs occur regardless of sales: rent, software subscriptions, insurance, base salaries. Variable costs occur per unit sold: materials, shipping, payment fees, commissions. This separation is the foundation of every break-even calculation.

What do I do if my break-even is unreachably high?

Check three levers, in this order: raise the price (strongest effect, every euro goes straight into the margin), lower variable cost per unit, reduce fixed costs. If none of the three brings break-even within reach, that is a serious signal about the business model.

Does the calculation also apply to services and subscriptions?

Yes, with adjusted units: for services the unit is an hour or a project, for subscriptions a customer per month. For subscriptions, one extra rule matters: customer acquisition costs must pay back within a few monthly fees, otherwise you grow yourself into a loss.