What's a Break-Even Point?

It's the exact moment where your business stops losing money and starts making it. When total revenue equals total costs — fixed plus variable — your profit is zero. Every unit you sell beyond that point is pure profit. Every unit below it is a loss you're eating.

Fixed Costs vs Variable Costs

Fixed costs are the bills that show up no matter what — rent, equipment leases, salaried staff. Variable costs scale with how much you sell: raw materials, packaging, shipping. Getting clear on which costs fall into which bucket is the first step in any break-even analysis.

Contribution Margin Explained

Contribution margin is (price - variable cost) / price. It tells you what percentage of each dollar in revenue actually goes toward covering fixed costs and generating profit. A higher margin means you recover your fixed costs faster and reach profitability sooner.

How to Use This

Drop in your fixed costs, the variable cost per unit, and your selling price. You'll instantly see how many units you need to move to break even. The profit table below the chart is especially useful — it shows you profit or loss at various sales volumes, so you can set realistic targets.