Break-even calculator The number every owner should know.
Find the sales your business needs each month to cover its costs, what it takes to reach a profit goal, and how much room you have today.
How this estimate works
Fixed costs are the bills that stay about the same whether sales are up or down: rent, salaried payroll, insurance, software, loan payments, and similar.
Gross margin is the share of each sales dollar left after the costs that rise with every sale, such as materials, product cost, merchant fees, and commissions. Break-even sales equal fixed costs divided by gross margin.
To reach a profit goal, add the monthly profit you want to fixed costs before dividing. Your margin of safety is how far sales could fall before you reach break-even.
Selling units instead? Switch to price and cost per unit, and the calculator shows the units you need to sell as well.
Assumptions and limits
- Uses one average margin for the whole business. If your products or jobs carry very different margins, a change in sales mix moves your break-even point.
- Profit is before income tax and owner draws.
- Fixed costs rarely stay fixed for long: a new hire, a lease, or a loan payment moves break-even up. Re-run it when your costs change.
An estimate is a starting point
Want this built from your actual books, with a budget to track against each month? That is what our advisory team does. This calculator is educational and is not tax advice.
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