Break-Even Analysis Calculator

Break-even analysis determines the point at which total revenue equals total costs — where your business starts making a profit. It's calculated by dividing fixed costs by the contribution margin per unit (price minus variable cost). This is one of the most fundamental business planning tools.

You can lower your break-even point by: reducing fixed costs (renegotiating rent, cutting subscriptions), increasing your selling price (if the market allows), or reducing variable costs (finding cheaper suppliers, improving efficiency). A lower break-even point means you need fewer sales to become profitable.

A healthy margin depends on your industry. Retail typically aims for 30-50% gross margins, software companies often exceed 70%, and restaurants operate on 3-5% net margins. The key is that your margin per unit must be positive and large enough to cover your fixed costs within a reasonable sales volume. If your contribution margin is negative, you lose money on every sale.