How much do I need to sell? Break-even calculator
Enter your fixed costs for a period, the selling price of a unit and the variable cost of that unit. The calculator shows how many units you have to sell and how much revenue you need before the business starts making a profit.
Calculator
Rent, salaries, subscriptions: costs that do not change with sales.
Purchase cost plus anything paid per sale, such as packaging or card fees.
Result
- Break-even units
- Break-even revenue
- Left over from each sale
- Share of each sale left over
The calculation runs in your browser; the numbers you enter are not sent anywhere.
Break-even units = fixed costs ÷ (price − variable cost per unit). Break-even revenue = fixed costs ÷ contribution margin ratio. With fixed costs of 12,000, a price of 50 and a variable cost of 30, you break even at 600 units, or 30,000 in sales.
What the break-even point tells you
Every unit you sell leaves something after its own variable cost. That amount, the contribution, first has to pay for rent, salaries and other fixed costs. The break-even point is the moment the contributions add up to exactly the fixed costs: no loss, no profit. Every unit after that adds its full contribution to profit.
The calculator uses three simple formulas:
- Contribution per unit = price − variable cost per unit
- Break-even units = fixed costs ÷ contribution per unit, rounded up
- Break-even revenue = fixed costs ÷ (contribution ÷ price)
Sorting your costs into fixed and variable
The result is only as good as the split between fixed and variable costs. Ask one question for each cost: does it go up when I sell one more unit? If yes, it is variable. If you pay it whether you sell 10 units or 1,000, it is fixed for the period.
Typical examples for a shop or a wholesaler:
| Cost | Type | Why |
|---|---|---|
| Rent and utilities | Fixed | Paid every month regardless of sales |
| Staff salaries | Fixed | Usually the same each month |
| Purchase cost of goods | Variable | Each unit sold has to be bought |
| Packaging and card fees | Variable | Paid on every sale |
Using the result to make decisions
Compare the break-even figure with what you actually sell. If you sell 700 units a month and break even at 600, the extra 100 units are your margin of safety. If you sell 550, you know exactly how far you are from covering costs.
Then try what-if numbers. Raising the price from 50 to 55 increases the contribution to 25 and lowers the break-even point from 600 to 480 units. Buying the same goods for 28 instead of 30 helps too. Small changes in price or purchase cost often move the break-even point more than a big push in sales.
Practical scenario
Example: a small household goods shop
A shop pays 12,000 a month in rent, salaries and bills. Its average item sells for 50 before tax and costs 30 to buy, so each sale contributes 20. It needs to sell 12,000 ÷ 20 = 600 items, or 30,000 in sales, to cover the month: about 20 items a day over 30 days. At 700 items it makes 2,000 profit.
Step-by-Step Implementation
1. Add up fixed costs for one period
Use the same period throughout, for example one month. Include your own salary if the business should pay you.
2. Enter price and variable cost per unit
Use amounts before tax. If you sell many products, use an average price and average purchase cost, or work with your overall margin.
3. Check it against real numbers in GiroPS
GiroPS records expenses by category in your cash and bank accounts, and its profit and loss report shows sales, cost of goods sold at average cost and expenses for any date range. That gives you the real fixed costs and margin to put into the calculator.
Common Pitfalls & How to Avoid Them
Frequently Asked Questions
What is the break-even point?
It is the sales level at which total contributions exactly cover fixed costs, so the business makes neither a profit nor a loss. It can be expressed in units or in revenue.
How do I calculate break-even when I sell many different products?
Use your overall gross margin. Break-even revenue = fixed costs ÷ average margin. With fixed costs of 9,000 and an average margin of 30%, you need 30,000 in sales.
Why is the number of units rounded up?
You cannot sell part of an item. If the exact result is 333.3 units, you only cover your costs once the 334th unit is sold.
What if the variable cost is higher than the price?
Then every sale makes the loss bigger and there is no break-even point. The calculator shows an error; the price or the purchase cost has to change first.