The Small Business Break Even Calculator finds the sales volume and revenue needed to cover fixed costs. It uses selling price and variable cost per unit to calculate contribution margin—the amount each sale contributes toward fixed costs and then profit.
The result helps owners set sales targets, test price changes, and judge whether expected demand is sufficient for a product, service package, event, or operating period. The model assumes unit price and variable cost remain constant across the analyzed volume and that fixed costs are assigned to the same period.
1. Enter fixed costs for the period being analyzed.
2. Enter the average selling price received per unit or job.
3. Enter variable cost that increases with each unit sold.
4. Optionally enter a target profit above break-even.
5. Review break-even units and revenue; whole units are rounded up because a partial unit may not be sellable.
Break-even volume is the minimum whole-unit sales level at which contribution covers fixed costs.
The calculation requires a positive contribution margin; it is not valid when variable cost equals or exceeds selling price.
Given: Fixed costs of $36,000, selling price of $85, variable cost of $34, and target profit of $12,000.
Calculation: Contribution = $85 − $34 = $51. Break-even units = $36,000 ÷ $51 = 705.88, rounded up to 706. Break-even revenue = 706 × $85 = $60,010. Target-profit units = ($36,000 + $12,000) ÷ $51 = 941.18, rounded up to 942.
Result: The business breaks even at 706 units and needs 942 units for the target profit.
Selling fewer than the calculated fraction would not fully cover fixed costs, so the result moves to the next whole unit.
Use costs that change directly with each sale, such as materials, transaction fees, packaging, or sales commissions.
Yes, but a weighted average price and variable cost are needed when the sales mix contains different products.
Only taxes entered in fixed or variable costs are included. Income taxes are usually analyzed after operating profit.
A lower price reduces contribution margin and normally increases the number of units required, unless variable cost also falls.