Break-even calculator for a small business
Your break-even point is the sales level where you stop losing money. This calculator finds it, plus the sales needed for a profit you choose.
How to use this calculator
- Enter your fixed costs per month, such as rent and salaries.
- Enter the selling price and the variable cost per unit.
- Optionally enter a profit target and the units you expect to sell.
- Read the break-even units and sales, and your cushion before losses.
Worked examples
Example 1
Fixed costs ₹50,000, price ₹500, variable cost ₹300, expecting 400 units.
You enter
| Fixed costs per month | ₹50,000 |
|---|---|
| Selling price per unit | ₹500 |
| Variable cost per unit | ₹300 |
| Profit you want per month (optional) | ₹0 |
| Units you expect to sell per month (optional) | 400 |
You get
| Contribution per unit | ₹200.00 |
|---|---|
| Break-even units per month | 250 |
| Break-even sales per month | ₹1,25,000 |
| Profit at 400 units | ₹30,000 |
| Cushion before losses | 37.5% fall in sales |
Example 2
Aiming for a ₹20,000 monthly profit.
You enter
| Fixed costs per month | ₹50,000 |
|---|---|
| Selling price per unit | ₹500 |
| Variable cost per unit | ₹300 |
| Profit you want per month (optional) | ₹20,000 |
| Units you expect to sell per month (optional) | 400 |
You get
| Contribution per unit | ₹200.00 |
|---|---|
| Break-even units per month | 250 |
| Break-even sales per month | ₹1,25,000 |
| Units for your profit target | 350 |
| Profit at 400 units | ₹30,000 |
| Cushion before losses | 37.5% fall in sales |
How it works
Each unit sold contributes its price minus its variable cost towards covering fixed costs. Break-even is reached when those contributions add up to the fixed costs.
The cushion shows how far sales can fall before you make a loss. A thin cushion means the business is fragile.
Formula
Break-even units = fixed costs / (price - variable cost). Units for a profit = (fixed costs + target profit) / (price - variable cost).
Common questions
What counts as a fixed cost?
Costs that stay the same however much you sell, such as rent.
What is a variable cost?
A cost that rises with each unit, such as materials and packing.
Does it include tax and your own pay?
No; add your own pay to fixed costs.
Learn more
Read the lesson Small business and self-employment finance on pusaram.com for the ideas behind this calculator.
Calculators give estimates for learning and planning. They are not financial, tax, legal or medical advice, and results depend entirely on the numbers you enter. Check rates, limits and rules with an official source or a qualified professional before acting.