About this Break-Even Point
Before you launch a product, you need to know your Break-Even Point (BEP). This is the magic number of sales where you stop losing money and start making profit. It is a critical milestone for any startup or new product line.
Who this calculator is for
- Founders validating whether a new product line can realistically cover its overhead.
- Operators pricing manufactured, retail, or subscription offers with meaningful fixed costs.
- Finance teams stress-testing what sales volume is required before a launch or budget approval.
When to use it
- Check whether your current price and unit economics can support a new offer.
- Compare different pricing, cost, or packaging scenarios before locking in a plan.
- Estimate the sales target required to recover monthly overhead on a recurring basis.
How to use this calculator
- Enter your total Fixed Costs (Rent, Insurance, Salaries).
- Enter the Variable Cost per Unit (Materials, Labor, Shipping).
- Enter the Selling Price per Unit.
- The result shows how many units you must sell to hit $0 profit.
Key assumptions
- This model assumes one consistent selling price and one consistent variable cost per unit.
- Fixed costs are treated as already totaled for the period you are planning.
- If the selling price does not exceed variable cost per unit, the break-even point is undefined because each sale fails to cover overhead.
Accuracy and testing
Review formula sources, default test cases, assumptions, unit handling, rounding rules, and changelog for this calculator.
How this calculator works
Inputs explained
Fixed Costs
Expenses that remain constant regardless of how many units you sell (e.g., Rent, Web Hosting, Salaried Employees).
Variable Costs
Expenses that scale with production (e.g., Raw Materials, Packaging, Credit Card Fees).
Selling Price
The revenue you receive for each unit sold.
Understanding your results
Example scenarios
Coffee Shop
Fixed Costs $5,000/mo. Coffee sells for $4. Variable cost (beans/cup) is $1. Contribution is $3. Break-even = 5,000 / 3 = 1,667 cups/month.
SaaS App
Fixed Costs $10,000/mo. Subscription $50/mo. Variable cost (server/support) $5. Break-even = 10,000 / 45 = 223 subscribers.
Key Features
- Unit & Revenue BEP
- Contribution Margin Display
- Startup Planning
Tips & Best Practices
- To lower your break-even point, you must either reduce fixed costs, reduce variable costs (cheaper materials), or raise prices.
- Re-calculate BEP whenever your costs change.
- If the BEP is higher than your expected market demand, the business model is not viable.
Glossary of Terms
- Contribution Margin
- Selling Price minus Variable Cost. Represents the portion of sales revenue that is not consumed by variable costs.
- Fixed Costs
- Business costs, such as rent, that are constant whatever the quantity of goods or services produced.
- Variable Costs
- A cost that varies with the level of output.