Free break-even calculator
Use this free break-even calculator to see how many sales or jobs you need each month to cover your costs, and what it takes to hit a profit target.
Use this tool free
Tell us who you are and the tool opens straight away, along with every other free tool and template on this device. We'll email you when we add new ones.
How it works
Price minus the cost of delivering it. This is the contribution each sale makes.
Your fixed costs for the month, plus any profit you want on top.
Fixed costs divided by what each sale leaves is how many sales you need.
The maths
contribution per sale = price − variable costbreak-even sales = fixed costs ÷ contribution per salebreak-even revenue = break-even sales × pricesales for a profit goal = (fixed costs + profit goal) ÷ contribution per salemargin of safety = (expected sales − break-even sales) ÷ expected sales
Sales are rounded up to whole sales, because you can't sell part of a job.
How to use this free break-even calculator
Put in what the business costs you each month, the average price of a sale or job and what each one costs you to deliver. The break-even calculator shows how many sales you need to cover your costs, how much revenue that is, and how many more you need to reach the profit you want.
A worked example
A cleaning business has fixed costs of 3,000 a month: a van lease, insurance, software and the owner's wage. An average clean is priced at 150, and each one costs 40 in products, fuel and a cleaner's pay. Each clean leaves 110 towards costs and profit.
- Break-even: 3,000 ÷ 110 = 27.3, so 28 cleans a month.
- Break-even revenue: 28 × 150 = 4,200.
- For 1,500 profit on top: (3,000 + 1,500) ÷ 110 = 40.9, so 41 cleans a month.
If the business expects 45 cleans a month, its margin of safety is (45 − 28) ÷ 45, about 38%. Sales could drop by more than a third before it starts losing money.
Three ways to lower your break-even point
- Raise your price. A small rise goes straight to contribution. In the example, charging 165 instead of 150 cuts break-even from 28 cleans to 24. Our profit margin calculator helps you set it.
- Cut the cost of each job. Cheaper supplies, less travel between jobs or fewer payment fees all add up across every sale.
- Trim fixed costs. Cancel software nobody uses and question every monthly bill once a year.
Common mistakes
- Leaving your own pay out. A business that only breaks even without paying you is not breaking even.
- Forgetting payment fees and tax. Card and payment link fees are a variable cost. If you charge VAT, use prices without VAT.
- Using your best month. Work from an average month, or a slow one, so the number holds up when things are quiet.
Questions
What is a break-even point?
The number of sales, or the amount of revenue, at which your income exactly covers your costs. Below it you make a loss; every sale above it adds profit.
What counts as a fixed cost?
Anything you pay each month whether you sell anything or not: rent, software, insurance, phone, loan repayments and any salaries, including a regular wage you pay yourself.
What counts as a variable cost?
What each extra sale or job costs you to deliver: materials, card or payment fees, delivery, a freelancer you pay per job, or the hours of staff you pay by the job.
What if I sell services at different prices?
Use your average price and average variable cost per job. If most of your income comes from one or two services, you can also run the numbers for each one separately.
What is the margin of safety?
How far your expected sales are above break-even. If you expect 50 jobs and break even at 35, sales could fall by 15 jobs, or 30%, before you start losing money.
Should I pay myself before or after break-even?
Count the wage you need as a fixed cost. Then break-even means the business covers everything including you, which is the number that actually matters.
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