Break-Even Calculator
Find out how many units you need to sell to cover all your costs (Break-Even Point).
Costs & Revenue
Break-Even Point
Units to Sell
250
Survival Metrics for Business
Knowing your Break-Even Point (BEP) is the single most important metric for a new business. It defines your “Survival Line”.
How to use this tool?
- Enter Fixed Costs: Total monthly overheads (Rent + Admin Salaries + Software subscriptions).
- Enter Unit Price: How much you sell one item for.
- Enter Variable Cost: How much it costs to make/buy that one item.
The Result
The calculator will tell you:
- BEP (Units): “You need to sell 500 burgers.”
- BEP (Revenue): “You need to generate ₹50,000 in sales.”
Anything below this number = Loss. Anything above = Profit.
Frequently Asked Questions
What is Break-Even Point (BEP)?
The Break-Even Point is the level of sales where your Total Revenue equals Total Costs. At this point, you are neither making a profit nor a loss.
What is the formula for Break-Even?
BEP (in units) = `Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)`. The denominator is also known as Contribution Margin.
Why is BEP important?
It tells you the minimum sales target required to avoid losses. Every sale after BEP contributes directly to profit.
What are Fixed Costs?
Costs that do not change with the number of units produced. Examples: Rent, Salaries, Insurance, Loan interest.
What are Variable Costs?
Costs that change directly with production volume. Examples: Raw materials, Packaging, Shipping, Commission.
How can I lower my Break-Even Point?
You can lower BEP by: 1) Increasing prices, 2) Reducing variable costs (cheaper materials), or 3) Reducing fixed costs (lower rent/salaries).
Does BEP consider profit?
No, BEP calculates 0 profit. To calculate sales needed for a specific profit target, add the Target Profit to Fixed Costs in the numerator.
Is BEP applicable for service businesses?
Yes! Instead of 'units', you can calculate BEP in 'Billable Hours' or 'Number of Clients'. Formula: `Fixed Costs / (Rate per Hour - Direct Cost per Hour)`.
What is Contribution Margin?
It is `Selling Price - Variable Cost`. It represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.
How often should I calculate BEP?
You should recalculate BEP whenever your costs change (e.g., rent hike) or you change your product pricing.