Break Even Calculator

How many sales until you stop losing money? Enter three numbers and get your break-even units and revenue instantly. Switch to subscription mode for MRR and churn.

Break-even units per month
320
Break-even revenue per month
$13k
Contribution per unit
$25 (63%)
Revenue Total cost Break-even

Break-even is one number. A full model shows the month you reach it, with growth, churn, and real market benchmarks.

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How the break-even formula works

The break-even point is where total revenue equals total cost. The formula is simple: break-even units = fixed costs / (price per unit minus variable cost per unit). The bottom half of that fraction is your contribution margin, the amount each sale contributes toward covering fixed costs. Once fixed costs are covered, the same contribution becomes profit.

Here is the thing most first-time founders miss: the formula is brutally sensitive to contribution margin. Selling at $40 with $15 of variable cost, an $8,000 fixed base needs 320 units a month. Shave $5 off the variable cost and you need 267. Discount the price by $5 instead and you need 400. Pricing decisions move your break-even point far more than most cost-cutting does, which is why we suggest testing price changes in the calculator first.

What a healthy break-even looks like

There is no universal benchmark for break-even units, but there are useful reference points for the inputs. Contribution margins in the 60-80% range are typical for software and digital products, while physical products and e-commerce usually land between 20% and 50% after gross margin deductions like COGS, shipping, and returns. If your contribution margin is under 20%, small pricing or cost surprises can wipe out the business, so treat that as a warning sign, not a detail.

For subscription businesses, the churn input matters as much as the price. Early B2C SaaS products commonly see 3-7% monthly churn; B2B products retain better, often 1-3%. Our churn rate guide covers how to measure it properly. The calculator shows how many new subscribers you need each month just to offset cancellations at your break-even level, a number that surprises almost everyone the first time.

From break-even point to break-even month

This calculator answers "how many sales do I need?" The harder question is "when do I get there?" That depends on your growth curve, acquisition costs, and how churn compounds over time. A full financial model projects revenue and costs month by month and tells you the exact month you cross break-even, in base, optimistic, and pessimistic scenarios. If you are still validating the idea itself, start with the profitability check, then pick a model template for your business type. You can also estimate how long your cash lasts on the way there with the runway calculator.

FAQ

How do you calculate the break-even point?
Divide your fixed monthly costs by the contribution margin per unit, which is price minus variable cost. If rent, salaries, and software total $8,000 a month and each unit sells for $40 with $15 of variable cost, contribution is $25 and break-even is 320 units a month. Multiply by price to get break-even revenue: $12,800 in this example.
What counts as a fixed cost versus a variable cost?
Fixed costs stay the same whether you sell zero units or a thousand: rent, salaries, insurance, most software subscriptions. Variable costs scale with each sale: materials, shipping, payment processing fees, per-unit labor. Some costs are mixed; a common approach is to split them and put the per-sale portion in variable costs.
How is break-even different for a subscription business?
Instead of units, you count paying subscribers, and instead of unit price you use monthly revenue per subscriber (MRR per customer). The formula is the same, but churn adds a twist: at break-even you must keep replacing the subscribers who cancel. At 5% monthly churn and 320 break-even subscribers, that means 16 new signups every month just to stand still.
Is a lower break-even point always better?
Mostly, but not at any price. You can lower break-even by raising prices or cutting costs, and both have limits: raise prices too far and conversion drops, cut costs too deep and quality or growth suffers. The useful question is whether your realistic sales volume clears break-even with room to spare, which is what a full financial model with scenarios answers.

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Break-even month, runway, and unit economics, projected month by month on real market benchmarks. See the downside before you commit.

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