Calculate break-even point in units and revenue for any product or business.
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Break-even units = Fixed costs / (Price - Variable cost per unit). Break-even revenue = Fixed costs / Contribution margin ratio. CM ratio = (Price - Variable cost) / Price.
Break-even units = Fixed Costs ÷ (Price - Variable Cost per Unit). Break-even revenue = Fixed Costs ÷ Contribution Margin Ratio.
Contribution margin = Revenue - Variable Costs. It shows how much each dollar of sales contributes to covering fixed costs and profit.
Reduce fixed costs (rent, salaries), reduce variable costs (COGS, packaging), or raise your price. All three directly reduce break-even units.
It depends on your industry. Aim to break even within 6-12 months of launch. Faster is better — it means you need less startup capital.
It shows the minimum price needed to cover costs at expected sales volume. Price below this and you lose money on every unit sold.
Calculations are for educational purposes only. Consult a qualified financial advisor for personalized advice.