Break-Even Calculator
Discover exactly how much you need to sell to cover all your costs
Rent, salaries, insurance, software subscriptions
Materials, shipping, transaction fees per item
Average price customers pay per item
How many units you currently sell per month
Your Break-Even Analysis
Contribution Margin per Sale:
$50.00
Break-Even Units (Monthly):
100
Break-Even Revenue (Monthly):
$7,500
Current Monthly Revenue:
$6,000
Gap to Break-Even:
20 more units needed
Current Monthly Profit/Loss:
-$1,000
Strategy Guide: How to Improve Your Break-Even
1. Reduce Fixed Costs
Look for opportunities to lower your monthly overhead without hurting quality:
- Negotiate better rates on software subscriptions or insurance
- Consider shared office space or remote work options
- Audit recurring expenses and cancel unused services
- Renegotiate vendor contracts annually
2. Increase Your Average Selling Price
Small price increases can dramatically improve your break-even point:
- Test 5-10% price increases with new customers
- Add premium options or packages
- Bundle products/services for higher value
- Improve perceived value through better positioning
3. Lower Variable Costs
Improve your margins by reducing costs per sale:
- Negotiate better rates with suppliers for higher volumes
- Find more efficient shipping or fulfillment methods
- Reduce transaction fees by switching payment processors
- Automate processes to reduce labor costs per sale
⚠️ Warning Signs You're Operating Too Close to Break-Even
- You need more than 85% of your current sales volume just to break even
- A 10% drop in sales would put you in the red
- You can't afford to lose even one major customer
- You have no budget for marketing or growth investments
- Seasonal fluctuations threaten your cash flow
Pro Tip: Aim to break even at 60-70% of your typical sales volume. This gives you a safety buffer for slow months and room to invest in growth.
Using Break-Even Analysis for Growth Decisions
Before making any major business decision, run the numbers:
- Hiring: How many additional sales do you need to cover the new salary?
- Equipment: How long will it take for efficiency gains to pay for the investment?
- Marketing: What's your maximum cost per acquisition to stay profitable?
- Expansion: What break-even point do you need in the new market?
Need Help Making These Numbers Work?
Get expert guidance on improving your break-even point and building a more profitable business.
Schedule Your CFO Strategy Session