Break-Even Analysis
Calculate how many units you need to sell to cover all costs, with an interactive profit projection chart
// Break-Even Point
The break-even point is where total revenue equals total costs — no profit, no loss. Every unit sold beyond this point generates pure profit equal to the contribution margin.
// Contribution Margin
Contribution margin = selling price - variable cost per unit. This is how much each sale contributes toward covering fixed costs. Higher margin = fewer units needed to break even.
// Fixed vs Variable
Fixed costs stay the same regardless of sales (rent, salaries). Variable costs scale with each unit (materials, shipping). Knowing the split is key to accurate break-even analysis.
// Lower Your Break-Even
To break even faster: increase price (if market allows), reduce variable costs (better suppliers), or cut fixed costs (smaller space). Even small changes can dramatically shift your break-even point.