Break-Even Point Calculator – Know When Your Business Starts Making Profit

Every business, whether it’s a café, an online store, or a manufacturing company, wants to know one thing: At what point will I stop losing money and start making profit? This turning point is called the break-even point. Our Break-Even Point Calculator helps you quickly find the number of units you need to sell, or the amount of revenue you need to generate, to cover all your costs.

Why the Break-Even Point Matters

Knowing your break-even point is more than just a math exercise — it’s a core part of smart business planning.

• For new businesses: It shows how realistic your sales targets are.
  
• For established companies: It helps set prices, cut costs, or plan for growth.
  
• For investors or lenders: It proves you understand your financials.
  

In simple terms, if you don’t know your break-even point, you’re running blind.

What You Enter in the Calculator

To calculate your break-even point, the tool asks for three simple inputs:

1. Fixed Costs ($)
   These are costs that stay the same no matter how much you produce. Examples: rent, insurance, salaries.
   
2. Variable Costs per Unit ($)
   These costs change depending on how many units you make or sell. Examples: raw materials, packaging, shipping.
   
3. Price per Unit ($)
   This is how much you charge your customer for one unit of your product or service.
   

The Formula for Break-Even Point

The break-even point in units is calculated as:

Break-Even Point (Units) = Fixed Costs ÷ (Price per Unit – Variable Cost per Unit)

If you want the break-even point in sales dollars, the formula is:

Break-Even Point (Sales $) = Break-Even Units × Price per Unit

This shows how much total revenue you need to generate before you start making profit.

How the Calculator Works

1. Enter your fixed costs.
   For example, your bakery pays $2,000 in monthly rent and $500 in other fixed costs. Total = $2,500.
   
2. Enter your variable costs per unit.
   Each loaf of bread costs $1.50 in flour, yeast, and packaging.
   
3. Enter your price per unit.
   You sell each loaf for $4.00.
   
4. The calculator applies the formula.
   Break-Even Units = $2,500 ÷ ($4.00 – $1.50)
   Break-Even Units = $2,500 ÷ $2.50 = 1,000 loaves
   
5. Result shown instantly.
   You need to sell 1,000 loaves of bread each month to cover all your costs. Anything above that is profit.