Break‑Even & Pricing Calculator
Calculate your break-even point, analyze contribution margins, and optimize pricing with our comprehensive business calculator. Perfect for startups, small businesses, and entrepreneurs planning their financial strategy.
Enter your business assumptions below to see real-time calculations of contribution margin, break-even units/revenue, and profit projections.
Business Assumptions
Price after discount is used for all calculations. Contribution margin = price − variable cost. Break‑even units = fixed ÷ contribution.
Calculation Results
Profit vs Volume Chart
Sensitivity Analysis Table
See how profit changes at different sales volumes to understand your business sensitivity.
How to Figure Out Your Break-Even Point
When you're first starting, the numbers side of your business can feel like a huge hurdle. But what if there was a way to quickly see if your great idea has the potential to make money? That’s exactly what a break-even analysis does. It’s a simple calculation that shows you the exact point where your business starts earning a profit.
Think of it as the finish line you need to cross to be officially "in the black." Here are the two simple ways to figure it out.
The Break-Even Formula for Units
This formula tells you exactly how many items—whether it's cups of coffee, consulting hours, or handmade hats—you need to sell to cover all your costs.
Here’s the simple formula: Your Fixed Costs / (Price of Your Product - Cost to Make Your Product)
Fixed Costs are your predictable, regular expenses like rent or website hosting. They stay the same whether you sell one item or a thousand. Price of Your Product is simply what you'll charge a customer. Cost to Make Your Product (also called Variable Costs) are the expenses that go into creating each item, like ingredients or materials.
Let’s say you want to open a t-shirt business. If your fixed costs are $1,000 per month, you sell each shirt for $25, and it costs $10 to make each one, your break-even point is 67 shirts. Once you sell that 67th shirt, you've covered all your bills for the month! Every shirt that you sell after that contributes to your profits.
The Break-Even Formula for Revenue
This formula tells you the total revenue you need to bring in to cover your costs.
Here's the formula: Your Fixed Costs / ((Price of Your Product - Cost to Make Your Product) / Price of Your Product)
This formula uses the same basic ingredients but gives you a dollar amount to aim for. It answers the question, "How much money do I need to make each month to cover my expenses?" For our t-shirt example, that would be $1,675 in sales.
Why Your Big Idea Needs a Break-Even Analysis
For someone at your stage, a break-even analysis is more than just a math exercise—it’s one of the most powerful first steps you can take. It’s about turning your idea into a real, viable plan.
1. See If Your Idea Has Legs
This is the big one. A break-even analysis is the quickest way to test if your business idea is financially feasible. If you find out you'd need to sell 10,000 units a month just to break even, you might need to rethink your pricing or your costs. It’s an early reality check that can save you tons of time and money.
2. Price Your Product with Confidence
How do you pick the right price? It's a question every new entrepreneur struggles with. A break-even analysis gives you a starting point. It helps you understand the bare minimum you need to charge to be successful, so you can set a price that feels fair to your customers and is smart for your business.
3. Turn a Big Goal into Small, Doable Steps
The thought of "making a profit" can feel huge and abstract. Your break-even point turns it into a clear, tangible target. Instead of a vague goal, you now have a specific number of sales to aim for each month. This makes your business goals feel less intimidating and much more achievable.
4. Build a Foundation for a Solid Business Plan
If you decide to look for a loan or an investor down the road, they will want to see that you understand your numbers. A break-even analysis is a key piece of your financial story. It shows that you've thought seriously about what it will take to be profitable—and that you're a smart, prepared entrepreneur.
5. Make Decisions with Less Guesswork
Even at the idea stage, you’re making decisions that will impact your business later. Should you use that premium material? Should you invest in that fancy software? By understanding your break-even point, you can start to see how each cost affects your path to profitability, helping you make smarter choices from day one.
Frequently asked questions
The break-even point is the sales volume at which your total revenue equals your total costs, resulting in zero profit. It's a crucial metric for understanding when your business becomes profitable.
The break-even analysis is the simple process of looking at your costs and sales price. The break-even point is the result—that specific, "magic number" where you've sold just enough to cover all your expenses.
Fixed costs remain constant regardless of sales volume (rent, salaries, insurance), while variable costs change with production levels (materials, shipping, commissions).
Yes! Since your products will have different prices and costs, you first need to estimate your "sales mix." That’s just a simple way of figuring out what percentage of your total sales you expect to come from each product (for example, 70% from t-shirts and 30% from hats).
Once you have that mix, you can find an average profit across all your products. You then plug that single average number into the standard break-even formula to find the point for your entire business.
The most critical time to do the analysis is when you're first starting out and building your business plan.
After that, you'll want to revisit it whenever you're making a big decision, like launching a new product. Once your business is established, checking in on it once a year is a great way to make sure you're still on the right track.