Break-Even Units
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Break-Even Calculator
Calculate how many units you need to sell to cover your costs and when your business becomes profitable. Enter your fixed costs, selling price, and variable cost per unit.
| Fixed Costs (£) | |
| Selling Price per Unit (£) | |
| Variable Cost per Unit (£) |
GUIDE
Break-Even Analysis Guide
Learn how to calculate break-even properly, include real costs, and use it to price products and plan profitability.
Read Guide →How to Use the Break-Even Calculator
Step-by-Step
- Enter total fixed costs: Include monthly costs that don’t change with sales (rent, salaries, software, insurance).
- Enter your average selling price: Use the typical price per sale or customer.
- Enter your average variable cost per sale: Include costs that increase with each sale (product cost, materials, packaging, fees, delivery).
- Click calculate: See how many sales you need to cover all costs and the revenue required to break even.
What Is a Break-Even Point?
The break-even point is where total revenue equals total costs. At this level of sales, your business makes neither a profit nor a loss. Every sale beyond this point contributes directly to profit.
Break-Even Formula Explained
Break-even units are calculated by dividing fixed costs by the contribution margin per unit. The contribution margin is the difference between selling price and variable cost.
Break-Even Revenue
Once you know the number of units required, multiply it by your selling price to get the revenue needed to break even.
Why It Matters
Break-even analysis is a core decision-making tool. It helps you set pricing, understand risk, and determine whether a business idea is viable before committing resources.
Common Mistakes
- Ignoring real variable costs: Payment fees, VAT, delivery, returns, and packaging all reduce your contribution per sale.
- Using the wrong price: Discounts, offers, and promotions mean your average selling price is often lower than your list price.
- Blending fixed and variable costs incorrectly: Salaries and rent are fixed, but per-job labour or fulfilment costs should be treated as variable.
- Overestimating demand: Hitting break-even on paper doesn’t mean you can realistically reach that sales volume.
- Not updating the numbers: Costs, fees, and pricing change — outdated inputs make the calculation meaningless.
Frequently Asked Questions
What is a break-even point?
The number of sales needed to cover all costs, where your business makes no profit or loss. Every sale after this point contributes to profit.
How do you calculate break-even units?
Divide total fixed costs by your contribution per sale (selling price minus variable cost). This shows how many sales are needed to cover overheads.
Does break-even include profit?
No. Break-even is the baseline — profit only starts once you exceed that level of sales.
What costs should be included?
Include all fixed costs (rent, salaries, software) and realistic variable costs per sale (product cost, fees, delivery, VAT where applicable).
Can I use this with multiple products?
Yes, but you should use average selling price and average variable cost per sale. This gives a blended break-even point across your business.
Why is break-even important?
It shows the minimum sales volume required to stay viable, and helps you test pricing, costs, and profitability before making decisions.