Break-Even Calculator.
Determine how many units you need to sell to cover all your costs and start generating profit.
Understanding Break-Even Analysis
Break-even analysis determines the point at which your total revenue equals your total costs. Below this point, your business operates at a loss. Above it, every additional unit sold contributes directly to profit.
Fixed costs are expenses that remain constant regardless of sales volume -- rent, salaries, insurance, and software subscriptions. These costs must be covered before any profit can be generated.
Variable costs increase proportionally with each unit produced or sold -- materials, shipping, transaction fees, and commissions.
Contribution margin is the difference between your selling price and variable cost per unit. It represents how much each sale contributes toward covering fixed costs and generating profit. A higher contribution margin ratio means you reach profitability faster.