Break-even point: how many sales do you need to cover your costs?

Your break-even point is the number of sales where revenue covers all your costs. Below it you lose money. Above it, every sale adds profit.

The formula

Break-even units = fixed costs ÷ (price − cost per unit). With $8,000 of monthly fixed costs, a $50 price and a $20 cost per unit, you need 267 sales a month.

Three ways to lower it

• Raise prices. At $55 instead of $50, the example above needs 229 sales instead of 267.
• Lower the cost per unit by buying in bulk or changing suppliers.
• Cut fixed costs you do not need, like unused software.

Set prices with the markup price calculator. If you run a startup, check how long your cash lasts with the cash runway calculator.