Break-even calculator
The most clarifying number in business: how many sales pay the fixed bills. Everything after that line is profit; everything before it is countdown.
The number the month has to clear
Break-even is fixed costs divided by contribution margin. A shop with $8,000 of monthly overhead and a 40% gross margin needs $8,000 ÷ 0.40 = $20,000 of sales before a single dollar of profit exists.
Expressed in units, it is fixed costs divided by the contribution per unit — useful when you sell a few things at a known margin rather than a wide catalogue.
Fixed and variable are a judgment
Rent and salaried wages are fixed; cost of goods and card processing fees vary with sales; hourly staff sit somewhere in between and move in steps rather than smoothly. The calculation is only as honest as that split.
Recalculate after any change in rent, staffing or supplier pricing. A break-even figure from last year is a comforting number rather than a useful one.
Frequently asked questions
What counts as a fixed cost?
What you pay whether or not you sell: rent, salaries, insurance, subscriptions. Costs that scale with each sale (the goods, card fees) belong in variable cost per sale.
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