Business break-even calculator
Work out how many units, and how much revenue, your business needs to sell each month to cover its fixed costs, from your price per unit and variable cost per unit.
Useful before you commit to a price, or when a landlord, supplier or staff cost changes. A planning-level tool, computed entirely in your browser.
Your cost and price
Rent, salaries, utilities and anything else you pay whether or not you sell a single unit, summed into one figure.
What you charge the customer for one unit, one product, one service session, one plate.
What it costs you to produce or deliver one more unit, materials, packaging, direct labour, delivery.
Break-even units / month
320
Units you must sell each month just to cover fixed costs
Break-even revenue / month
Rs 1,60,000
Contribution margin / unit
Rs 250
Contribution margin %
50.0%
Break-even revenue
Rs 1,60,000
An indicative planning estimate, computed entirely in your browser. Assumes a single price and a single variable cost per unit, real businesses selling multiple products should run this per product line or use a weighted-average price and cost. Not financial advice.
Contribution margin, then divide it into fixed costs
Three steps turn your price and costs into a monthly break-even target.
Find the contribution margin
Price per unit minus variable cost per unit, this is what each sale contributes toward fixed costs before any of it becomes profit.
Divide fixed costs by it
Fixed monthly costs divided by the contribution margin gives the number of units you must sell each month to reach zero profit and zero loss.
Convert to revenue
Break-even units multiplied by price per unit gives the monthly revenue figure that same break-even point represents.
Break-even only tells you the threshold, not how to price in the first place. If you are still deciding what to charge, our guide on how to price products or services in Nepal walks through cost-plus and market-based pricing with a full worked example.
Break-even, answered
What is a break-even point?+
The break-even point is the number of units, or the amount of revenue, at which your total sales exactly cover your total costs, with zero profit and zero loss. Sell fewer units than that and you are running at a loss, sell more and every additional unit adds to profit. It is one of the most useful sanity checks a new or small business can run before committing to a price.
What counts as a fixed cost vs a variable cost?+
A fixed cost stays roughly the same each month regardless of how much you sell, rent, staff salaries, loan instalments, internet and electricity base charges, a shop licence. A variable cost scales directly with each unit you sell, raw materials, packaging, direct delivery cost, a per-item commission. Some costs are mixed in practice, a good rule is to ask whether the cost would still exist if you sold zero units that month, if yes, it is fixed.
What if my contribution margin is negative?+
A negative or zero contribution margin means your variable cost per unit is greater than or equal to your price per unit, so every single sale loses money before fixed costs are even considered. No sales volume, however large, can make that business break even. The fix is always on the price or cost side, raise the price, cut the direct cost per unit, or both, there is no volume-based way out of a negative margin.
How is this different from profit?+
Break-even tells you the sales level at which profit is exactly zero, it is a threshold, not a target. Profit is what happens above that threshold, every unit sold beyond the break-even point contributes its full contribution margin straight to profit, since fixed costs are already covered. Knowing your break-even point tells you how much cushion, or how much risk, sits between your typical sales volume and the line where you start losing money.
Sources & data note
Break-even uses standard cost-volume-profit arithmetic: contribution margin (price minus variable cost per unit) divided into fixed monthly costs gives the units needed to cover them, multiplied by price for the revenue equivalent. It assumes a single product and a single price, businesses with several product lines should run this per line or use a weighted-average price and cost. Figures here are indicative and depend entirely on the costs and price entered, not financial advice.