Margin & markup
Find your profit, margin, and markup—or work out the price needed for a target margin.
Business basicsBusiness basics
Break-even point calculator
When the side hustle earns its hay.
Your numbers
Find how many units cover your costs, and how many could hit your profit goal.
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THE MATH, WITHOUT THE MYSTERY
What’s actually happening here?
Each sale leaves a contribution after its variable cost. That contribution pays the fixed bills first. Once those bills are covered, extra contribution becomes operating profit in this simplified model.
We round required units up because you usually cannot sell a fraction of a product. Target-profit units = (fixed costs + target profit) / contribution per unit, also rounded up.
THE FORMULA
Break-even units = Fixed costs / (Unit price − Unit variable cost)
A small example
With fixed costs of 3,000, a price of 50, and variable cost of 20, each sale contributes 30. Break-even is 3,000 ÷ 30 = 100 units.
Further reading
U.S. Small Business Administration · Break-even pointGOOD QUESTIONS
A few things worth knowing.
Why round up the result?
Selling 83.4 whole products is not usually possible. If the math gives 83.4 units, the first whole-unit break-even point is 84.
What if price is below variable cost?
Each sale loses money before fixed costs. Selling more cannot solve that under these assumptions; price or costs must change.