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Break-even calculator: how many sales cover your costs?

The short answer

To find your break-even point, divide your fixed costs by what each sale leaves after its own costs. With $6,000 a month in fixed costs and a $150 sale that costs you $60, each sale puts $90 toward your costs, so you break even at 67 sales, or $10,050 in revenue. Every sale after that adds profit.

Find out how many sales it takes to cover your costs each month, the revenue that takes, and how many more it takes to pay you what you want.

Your numbers for a month

What you pay whether you sell anything or not: rent, insurance, salaries, software.
One item, one job, one appointment or one customer’s average ticket.
Materials, supplies, commission and card fees for that sale.

Your break-even point

67 sales a month

That’s $10,050 in sales. Below it you lose money; above it, each sale adds $90.00 of profit.

What each sale puts toward your costs
$90.00 (60%)
Sales to reach your profit goal
89
Profit at the sales you expect
$2,100

Plain arithmetic on your own numbers, before income tax.

How it works

How to calculate your break-even point

  • In sales: fixed costs ÷ (price − variable cost per sale).
  • In revenue: break-even sales × price.

What the terms mean

  • Fixed costs stay the same however much you sell: rent, insurance, salaries, software.
  • Variable costs go up with each sale: materials, supplies, commission, card fees.
  • Contribution margin is the price minus the variable cost. It pays down your fixed costs, and once they’re covered it’s profit.
What price does to break-even, with $6,000 in fixed costs and $60 in variable cost per sale
PriceContribution marginSales to break evenRevenue
$100$40150$15,000
$125$6593$11,625
$150$9067$10,050
$175$11553$9,275
$200$14043$8,600

Selling lots of different things? Use your average sale and its average cost. To see what those numbers mean for your prices, try the margin calculator and the discount calculator. The US Small Business Administration also has a break-even calculator.

Common questions

How do I calculate my break-even point?
Divide your fixed costs by the price of a sale minus what that sale costs you. At $6,000 of fixed costs, a $150 price and a $60 cost per sale, that’s $6,000 ÷ $90, or 67 sales.
What’s the difference between fixed and variable costs?
Fixed costs stay the same whether you sell a lot or nothing, like rent and insurance. Variable costs rise with each sale, like materials and card fees. Some costs are a bit of both: split them as best you can.
Should I pay myself before working out break-even?
Yes. Put your own pay in fixed costs. If you leave it out, you can “break even” while working for free.
How do I work out break-even in revenue?
Multiply your break-even sales by your price. The calculator shows it for you. You can also divide fixed costs by your contribution percentage.
Is there a break-even formula in Excel?
Yes. Put fixed costs in B1, the price in B2 and the variable cost in B3, then use =ROUNDUP(B1/(B2-B3),0) to get break-even sales.
How can I lower my break-even point?
Raise prices, lower what each sale costs you or cut fixed costs. Price usually moves it fastest, because almost all of a price increase goes toward your costs.

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