Break-Even Calculator
Find out exactly how many units you need to sell — or what revenue you need to generate — to cover your fixed and variable costs and reach profitability.
The Contribution Margin
Contribution margin = Selling price − Variable cost per unit. This is what each sale contributes toward covering fixed costs. Break-even units = Fixed costs ÷ Contribution margin. Above break-even, each additional unit generates pure profit (at the contribution margin rate).
Fixed vs Variable Costs
Fixed costs don't change with output — rent, salaries, insurance, loan repayments. Variable costs increase with each unit sold — materials, commissions, packaging, delivery. The distinction matters because variable costs affect your margin, fixed costs affect your minimum viable sales level.
Using Break-Even for Pricing
If your break-even is too high at current pricing, you have three levers: raise price (check market tolerance), reduce variable costs (renegotiate suppliers, change materials), or reduce fixed costs (renegotiate lease, reduce headcount). Break-even analysis shows which lever has the most impact.
When to Seek Financial Advice
Calculator results provide estimates based on stated inputs and should not replace professional financial advice for significant decisions. Free, regulated financial guidance is available through MoneyHelper (moneyhelper.org.uk, 0800 011 3797) for general money queries. Regulated independent financial advisers (IFAs) — find one at unbiased.co.uk — provide personalised advice on mortgages, pensions, investments, and insurance. Advice fees are typically £150-350 per hour or a percentage of assets
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