If you already know fixed costs, this gives a fast read before you decide on marketing spend.
What is a break even calculator?
A break even calculator estimates the point at which your total revenue equals your total costs — the moment your business stops losing money and starts making a profit. For startup founders, small business owners and product sellers, this is one of the most important planning numbers you can know. Below the break even point you operate at a loss; above it, every additional sale contributes to profit.
Rather than guessing whether a product or business idea is viable, this calculator gives you a concrete sales target. It also produces a visual break even chart so you can see how revenue and costs move as sales volume increases.
How the break even calculator works
The calculator needs three inputs: your fixed costs (expenses that stay the same regardless of how much you sell, like rent and salaries), your selling price per unit, and your variable cost per unit (costs that rise with each sale, like materials and shipping). It then finds the contribution each unit makes and divides your fixed costs by that contribution.
Assumption note: this version assumes a single sales unit, a constant price, stable variable cost per unit, and fixed costs that do not change over the period. It does not model taxes, fees, rebates, seasonality, or mix shifts.
Break even formula
Break Even Units = Fixed Costs ÷ (Selling Price − Variable Cost)
Break Even Revenue = Break Even Units × Selling Price
Example calculation
Imagine your fixed costs are $5,000 per month, you sell each unit for $40, and each unit costs $15 in variable costs. Your contribution per unit is $40 − $15 = $25. Dividing $5,000 by $25 gives a break even point of 200 units, or $8,000 in revenue. Sell more than 200 units and you are profitable; sell fewer and you are operating at a loss.
Why tracking your break even point matters
Break even analysis turns vague hopes into clear targets. It helps you decide whether a price is high enough, whether a new product line is worth launching, and how sensitive your profit is to changes in cost or volume.
Set realistic monthly and quarterly sales goals.
Test how a price increase shortens your path to profit.
Understand the impact of reducing fixed or variable costs.
Evaluate whether a business idea can ever be profitable at scale.
Revisit your break even point whenever your costs or prices change so your targets always reflect reality.
Methodology & Accuracy
How this calculator produces its results, and the limits you should keep in mind when using them.
Formula source
The result is produced by the exact mathematical formula shown on this page. The formula is derived from the definition of the relationship between the inputs and the output (for example, profit margin is profit divided by revenue by definition). Where a formula relies on an external rule, rate, or convention, the authoritative source supporting that claim is linked in the Sources section below. The calculation has not been certified or approved by any professional body.
Assumptions
Calculations assume the figures you enter are accurate and apply to your situation. These are simplified models that may not capture every business scenario, and the estimates depend entirely on the values you select.
Uncertainty and limitations
Results are estimates based on the information entered. Actual financial outcomes may differ depending on business circumstances, market conditions, taxes, location, and other factors.
Tested with sample inputs
Tested with $5,000 fixed costs, $40 selling price, and $15 variable cost: 200 break-even units and $8,000 break-even revenue — matching the worked example on this page.
Ownership and testing
This calculator is maintained by Small Business Finance Toolkit. Its calculation can be checked using the sample figures shown on this page. It has not been certified or reviewed by a licensed financial professional. Found an error or outdated information? Contact us.
Review status
Sample checks are listed above where available. This page is documented as an educational tool and is updated before major edits using a documented review process.
Sources and references
The notes below identify the topics each reference supports. Worked scenarios and calculator outputs are illustrations, not endorsements by these organizations.