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Break-Even Calculator — Units, Revenue, and Months
Find the exact number of units you need to sell — and how many months it will take — to cover fixed costs. Surfaces contribution margin so you know whether a price change actually changes the math.
Break-even analysis — the math founders should run before pricing changes
Break-even is the point where total revenue equals total cost — past it, every additional unit is profit; before it, every unit is loss. The formula is simple, but most founders skip it because the inputs feel imprecise. They are not — and running it once a quarter catches pricing mistakes that compound for years.
The formula
contribution per unit = price per unit − variable cost per unit break-even units = fixed cost / contribution per unit break-even revenue = break-even units × price per unit months to break-even = break-even units / sales per month
What each input means
- Fixed costs: rent, salaries (non-sales), insurance, software subscriptions, base infrastructure. Anything that does not scale with each unit sold.
- Price per unit: your average selling price after discounts. Use ASP from the last 90 days, not list price.
- Variable cost per unit: material cost, shipping, payment processing, commission. Anything that scales linearly with each unit sold.
- Sales per month: realistic forward-looking volume, not your aspirational target. Be honest.
Why contribution margin matters more than gross margin
Contribution margin = (price − variable cost) / price. It tells you what fraction of each sale dollar contributes to fixed costs and profit. A business with 40% contribution margin needs 2.5x the revenue to cover the same fixed costs as a 100%-contribution business. Cutting price by 10% can require 30%+ more units to hit the same break-even — the math is unforgiving.
Common mistakes the calculator avoids
- Including sales commissions in fixed costs: commissions scale with units sold = variable cost.
- Forgetting payment processing fees: Stripe / PayPal at 2.9% + $0.30 add up — include in variable cost per unit.
- Using optimistic sales projections: if last month was 100 units, do not enter 200 "because we have a new campaign". Run two scenarios.
How to calculate your break-even point
Four inputs. Three numbers out: units, revenue, months. Run two scenarios — pessimistic and base case.
Sum fixed costs per month
Rent, salaries (excl. commissions), software, base infrastructure. Anything that does not scale with units sold.
Average selling price
ASP from last 90 days, including all discounts. Use real numbers, not list price.
Add variable cost per unit
Material + shipping + payment processing + sales commission. Anything that scales linearly with each unit.
Enter expected monthly sales
Realistic, based on last 90 days. If you want to run a "what-if 30% growth", do that as a second scenario — not the base case.
Read units + months
Months to break-even is what most founders actually care about. Compare to your runway: months-to-BE > runway = problem.
Frequently asked questions about break-even analysis
Break-even units = fixed costs / (price per unit − variable cost per unit). The denominator is "contribution per unit". Once you cover fixed costs with enough units, every additional unit is profit. This calculator outputs units, revenue, and months simultaneously.
Break-even = total revenue equals total cost (zero profit). Profitable = revenue exceeds cost. Past break-even, every additional unit contributes its full contribution margin to profit. Many businesses run at break-even for years before becoming profitable.
Marketing is usually a fixed cost in the short term (a campaign budget is a fixed commitment). Some pure performance channels (programmatic, PPC bid-by-conversion) are variable. The cleanest model: treat marketing as fixed for break-even, then check sensitivity separately.
Massively — and not linearly. A 10% price cut with constant variable cost reduces contribution per unit by 10%, requiring ~11% more units to break even. With low margins, a 10% price cut can require 30-50% more units. Run scenarios before discounting.
Yes, with a translation: "units" = average customer over their lifetime. Price = LTV. Variable cost = COGS over lifetime. Fixed cost = monthly CAC + overhead. The calculator works for SaaS unit economics in a slightly different framing.
6-12 months for SaaS, 12-18 months for e-commerce, 18-36 months for hardware. Less than 6 months usually means fixed costs are dangerously low (might collapse under scaling). More than 24 months requires investor patience or proven unit economics at scale.
