Break-Even Calculator
Calculate how many units you need to sell to cover your costs and start making profit. Understand your break-even point for better business planning.
Frequently Asked Questions
What is a break-even point?
The break-even point is when total revenue equals total costs—meaning you're neither making a profit nor a loss. It's calculated as: Break-Even Units = Fixed Costs / (Price Per Unit - Variable Cost Per Unit). Knowing this helps you set realistic sales targets.
What's the difference between fixed and variable costs?
Fixed costs stay the same regardless of sales volume (rent, salaries, insurance). Variable costs change with each unit sold (materials, shipping, transaction fees). Understanding this distinction is crucial for accurate break-even analysis.
How can I reduce my break-even point?
Lower your break-even point by: (1) Reducing fixed costs (negotiate rent, automate tasks), (2) Lowering variable costs (bulk purchasing, cheaper suppliers), (3) Increasing prices (if market allows), or (4) Improving efficiency to increase contribution margin.
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