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Break-even calculator

See how many sales cover your costs

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Example

Rent, salaries and software: costs that do not change with how much you sell.

Materials, per-unit shipping, transaction fees.

Optional. Shows your monthly profit and margin of safety at that volume.

Optional. Fit-out, equipment or licences paid once. Shows how many months of profit it takes to earn them back.

Break-even units / month

2,000

Break-even revenue / month
AED 90,000
Margin / unit
AED 27
Margin ratio
60%
How this is calculated

Break-even units a month = fixed costs ÷ (price − variable cost), rounded up, since part of a unit cannot be sold. Break-even revenue = those units × price. Monthly profit = units × (price − variable cost) − fixed costs. Margin of safety = (expected units − break-even units) ÷ expected units.

An estimate, not financial advice. Rates and costs change; check before you rely on it.

Cost vs revenue break-even chart
Break-even at 2,000 units a month, where the lines cross.
vivid360.io/tools/break-even-calculator

How it works

  1. Enter your fixed costs a month, the variable cost of one unit and the selling price of one unit.
  2. Break-even units = fixed costs ÷ (price − variable cost), rounded up to a whole unit. Break-even revenue = those units × price.
  3. Add your expected units a month to see your profit and margin of safety: (expected units − break-even units) ÷ expected units.
  4. Add one-off start-up costs to see how many months of profit it takes to earn them back.

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Questions

What is a break-even point?

It is the number of sales at which your income exactly covers your costs. Below it you make a loss, and above it every sale adds profit.

What are fixed and variable costs?

Fixed costs stay the same however much you sell, such as rent, salaries and software. Variable costs grow with each sale, such as materials, packaging and card fees.

Why does it say there is no break-even?

Your price is at or below your variable cost, so each sale does not add anything towards fixed costs. Raise the price or lower the cost per unit.

What is the margin of safety?

It is how far your sales can fall before you make a loss, as a percentage of your expected sales. A higher figure gives you more room.

Is this financial advice?

No. It is a simple model that assumes a fixed price and fixed costs. Use it to test ideas, and check big decisions with a qualified adviser.

Where do my figures go?

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