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Break-Even Analysis
Find out how many sales your small business needs to cover its costs.
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The Basic Formula
Fixed costs ÷ (Price − Variable cost per unit) = break-even units.
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Know Your Costs
Fixed: rent, insurance, software. Variable: materials, packaging, transaction fees.
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Bakery Example
Fictional example: $25 price, $10 variable cost and $3,000 fixed costs per month.
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200 Boxes a Month
$3,000 ÷ ($25 − $10) = 200 boxes to break even. That's $5,000 in sales.
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Test the Assumptions
A price cut or higher supply costs can increase the sales needed to break even.
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Try the Free Calculator
Change your own costs and prices in our interactive tool. Read the full guide.
Open the free calculator