Break-Even Calculator

This break-even calculator estimates how many units you need to sell before covering fixed costs. It uses selling price, variable cost per unit, and fixed costs to calculate break-even units, break-even revenue, and contribution margin.

Break-even analysis is useful before launching a product, changing price, hiring staff, renting premises, or increasing advertising spend. It shows the sales volume required before a decision starts producing profit.

If a product sells for GBP 50 and costs GBP 20 to produce, the contribution margin is GBP 30 per unit. With fixed costs of GBP 6,000 per month, the business needs to sell 200 units to break even.

After that point, each additional unit contributes GBP 30 before tax and other costs. If the business only sells 150 units, it has not yet covered fixed costs.

Break-even analysis turns pricing and cost decisions into a sales target. If the required units look unrealistic, the business may need a higher price, lower variable cost, lower fixed costs, or a different offer.

It also helps with risk. A business with high fixed costs needs more reliable sales volume, while a leaner business may survive slower months more easily.

Increase prices where the market allows, negotiate supplier costs, reduce waste, avoid unnecessary fixed commitments, and focus marketing on products with stronger contribution margins.

Test conservative sales assumptions before committing to new costs. A plan that works only at optimistic volume may become stressful if demand is slower than expected.