About the Break-even
This break even calculator shows how many units you must sell each month before your business starts making a profit. Enter monthly fixed costs, the selling price per unit and the variable cost per unit, and it returns the break-even units, the matching revenue, your margin per unit in rupees and per cent, and the daily sales that implies.
It is useful for anyone pricing a product or testing a business idea — manufacturers, retailers, cloud kitchens, D2C brands and service providers who can define a unit of sale. Founders preparing a pitch deck, a loan proposal or a project report will also need this number, because investors and bankers routinely ask for it.
Three inputs drive the result. Higher fixed costs push the break-even point up, while a wider gap between price and variable cost pulls it down. If the price is equal to or lower than the variable cost, there is no break-even point at all, and the tool warns that every unit sold is losing money.
How to use it
- 1Enter your monthly fixed costs, such as rent, salaries, loan EMI and the fixed part of electricity.
- 2Enter the selling price per unit.
- 3Enter the variable cost per unit, such as material, packing and commission.
- 4Read the break-even units per month, the break-even revenue, the margin per unit and the units per day based on 26 working days.
How this is calculated
Contribution per unit = selling price − variable cost per unit. Break-even units = monthly fixed costs ÷ contribution per unit (rounded up to a whole unit). Break-even revenue = break-even units × selling price. Margin % = contribution ÷ selling price × 100. Units per day = break-even units ÷ 26 working days.
Frequently asked questions
What is the break-even point?
It is the level of sales at which total revenue equals total cost, so profit is exactly zero. Below it the business makes a loss; above it each additional unit adds its contribution to profit. This tool expresses the point in units per month, in revenue and in units per working day.
How does the break even calculator work out the units?
It divides monthly fixed costs by the contribution per unit, which is the selling price minus the variable cost. With fixed costs of ₹1,50,000, a price of ₹250 and a variable cost of ₹150, the contribution is ₹100 and the break-even point is 1,500 units a month, or ₹3,75,000 of revenue.
Which costs are fixed and which are variable?
Fixed costs stay broadly the same whatever you sell — rent, salaries, loan EMIs, insurance and the fixed part of the electricity bill. Variable costs rise with each unit — raw material, packing, freight and sales commission. If a cost is partly fixed and partly variable, split it between the two as sensibly as you can.
Why does the tool assume 26 working days?
The per-day figure simply divides monthly break-even units by 26, a common assumption for a business that closes one day a week. If you operate all 30 days, or only 22, divide the monthly units by your own number of working days to get a daily target that fits your business.
Can I use it if I sell several products?
The tool models a single product. For a range of products, use a weighted average selling price and a weighted average variable cost based on your expected sales mix, and enter those. Recalculate whenever the mix changes, because a shift towards low-margin items raises the break-even point.
How can I lower my break-even point?
There are only three levers: raise the price, reduce the variable cost per unit, or cut fixed costs. Change one input at a time in the calculator to see which has the greatest effect. For a service business, treat a billable hour, a project or a monthly retainer as the unit.