Free calculator
Break Even Calculator
Type one month of sales, the costs that rise with each sale and the bills you pay anyway. The calculator gives the sales you need each month to break even, how much of each sales dollar is left to cover your bills, and how far above or below break-even you are. Free, no sign-up.
- Sales$0
- Costs that rise with each sale (0% of sales)$0
- Left to cover the fixed costs$0
- Costs you pay anyway$0
- Profit this month$0
- Orders a month to break even0
How it works
Split one month of costs in two. Costs that rise with each sale are the stock and materials in what you sold, selling and payment fees and shipping labels. Costs you pay anyway are rent, insurance, phone, software, ads and the other bills that stay about the same whatever you sell.
Contribution margin is the share of each sales dollar left after the costs that rise with it: one minus those costs divided by sales. Break-even sales are the costs you pay anyway divided by the contribution margin. At that level of sales the month ends at zero profit.
Profit for the month is sales less both kinds of cost, the same net profit a profit and loss statement shows. The cushion is how far your sales sit above break-even. Owner draws and big equipment purchases stay out, as they do on the statement.
A worked example
The Profit and Loss Template's example is a made-up one-person T-shirt shop. In September it had $3,325.00 of net revenue and a net profit of $513.01. Its costs that rise with each sale were $2,040.00: $1,260.00 of shirts and ink, $340.00 of selling fees and $440.00 of shipping labels. Its costs paid anyway came to $771.99: $450.00 rent, $42.00 insurance, $65.00 phone and internet, $29.99 software, $100.00 ads and $85.00 supplies. That leaves a 38.6% contribution margin and a break-even of $1,997.56 a month, so September sat $1,327.44 above it. August, with $4,550.00 of sales, broke even at $1,534.58.
Get these numbers from every sale and expense
The Profit and Loss Template for Excel and Google Sheets turns one log of money in and money out into a monthly and year-to-date statement with 22 cost and expense lines, % of revenue on every line and a Month by Month tab for the whole year. It has an Entries tab with 1,000 rows, a Checks box for rows missing a date or category, a filled-in example and a Start Here guide. $2.99, instant download.
Questions
How do I calculate my break-even point?
Divide the costs you pay anyway by your contribution margin. In the example, $771.99 of monthly bills divided by a 38.6% contribution margin is $1,997.56 of sales a month.
What counts as a cost that rises with each sale?
Anything you spend more on when you sell more: the stock or materials in what you sold, marketplace and payment fees, shipping labels and packaging. Rent, insurance, software and most ad budgets stay the same, so they go in the other box.
How do I get break-even in number of sales?
Type your average sale: a month's sales divided by its number of orders. The calculator divides break-even sales by it and rounds up. With a $25.00 average sale, the example's August break-even is 62 orders.
Why does my break-even change from month to month?
Your mix changes. A month with a big custom order or higher fees changes the share of each dollar the costs take. Use a typical month, or run two months to see the range.
Should I include what I pay myself?
Not as a cost here. Owner draws stay out of profit, as on a profit and loss statement. If you want break-even to include your pay, add a monthly amount for yourself to the costs you pay anyway.
Is this tax or financial advice?
No. It is a planning estimate from the numbers you type.