Choose a meaningful unit
Use a product, order, subscription, seat, transaction, or project that connects price to direct cost.
Business model tool
Break-even calculator
Estimate the sales volume required to cover fixed costs and understand how price and variable cost affect viability.
- Free to use
- Runs in your browser
- No details saved
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Enter your assumptions
Use one consistent period and include every cost that changes directly with a sale.
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Use one consistent period and include every cost that changes directly with a sale.
How to use this tool
Use the output as a decision prompt
Break-even occurs when total contribution margin covers fixed costs. Contribution per unit equals selling price minus direct variable cost. Dividing fixed costs by contribution per unit gives the required unit volume.
The calculation is most useful when the unit is defined carefully and costs are classified honestly. Payment fees, shipping, cloud usage, commissions, refunds, and implementation can behave like variable costs even when they are easy to overlook.
Method and interpretation
What the calculation is designed to show
Use net realised price
Account for discounts and channel deductions rather than using the highest list price.
Test sensitivity
Change price, volume, and variable cost to see which assumption most affects the break-even requirement.
Useful applications
When this tool can help
Revisit the calculation when assumptions or evidence change. Keep the inputs with the result so another founder or adviser can understand the reasoning.
- Evaluate a pricing plan
- Set a monthly sales target
- Compare fulfilment options
- Assess a new channel
- Plan fixed-cost hiring
- Explain unit economics to co-founders
Questions and limitations
Understand what the result cannot decide
What if variable cost is greater than price?
Each sale loses money before fixed costs, so there is no positive break-even volume. Improve price, direct cost, or the offer before scaling sales.
Are salaries fixed costs?
Regular salaries are often treated as fixed within a planning period, while commissions or delivery labour may vary with sales. Use the classification that reflects how cash actually changes.
Is break-even the same as cash-flow positive?
Not necessarily. Payment timing, inventory, debt, taxes, capital expenditure, and receivables can make cash flow differ from a simplified operating break-even calculation.
How do I calculate break-even for SaaS?
Use a consistent customer or subscription unit, net recurring revenue per period, and variable service costs. Also model churn and acquisition payback separately.
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