Cost Volume Profit
Break-even Calculator
Find the unit volume and revenue at which your business covers all fixed and variable costs.
show_chartCost Structure
trending_upBreak-even Point
Units to Break Even
1,000
£50,000.00 of revenue
Contribution per Unit£20.00
Contribution Margin40.0%
Break-even Revenue£50,000.00
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Sum Fixed Costs
Rent, salaries, software — costs that don't change with volume.
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Identify Variable Costs
Materials, packaging and per-unit labour vary with each unit sold.
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Hit the Threshold
Sell above break-even units to start generating real profit.
Common Questions
What is contribution margin and why does it matter?expand_more
Contribution margin = selling price − variable cost per unit. Each unit's contribution chips away at fixed costs until you reach break-even, then everything beyond is profit. It's the single most useful pricing number you can know — it tells you instantly whether selling more units actually helps. If contribution is £2 and a discount drops it to £1, you need to sell twice as many just to stand still.
Should I include my own salary?expand_more
Yes — always. If you draw a regular wage (or should be), include the full cost in fixed costs to get a true break-even figure. Many founders calculate break-even excluding their own pay and report 'profitability' that's really just self-employment at minimum wage. A useful sanity check: if you replaced yourself with a hired manager at £40k, would the business still break even?
Which costs are fixed vs. variable?expand_more
Fixed costs don't change with sales volume in the short term: rent, salaries, insurance, software subscriptions, accountancy, your own draw. Variable costs scale with each unit sold: raw materials, packaging, transaction fees, commission, delivery. Some are 'semi-variable' (utilities have a standing charge plus usage) — split these into the fixed and variable components for accuracy.
How do I use break-even for pricing decisions?expand_more
Run the calculation at three prices: your current price, a 10% increase, and a 10% decrease. You'll often find a 10% price rise lowers your break-even units by 30%+, while a 10% discount raises it by 50%+. This makes the case for holding price (or quietly raising it) far stronger than chasing volume — especially for service businesses where capacity is limited.
What if I sell multiple products at different margins?expand_more
Calculate a weighted-average contribution margin based on your typical sales mix. For example, if 70% of sales come from a £10/unit product with £4 contribution and 30% from a £30 product with £18 contribution, weighted contribution = (0.7 × £4) + (0.3 × £18) = £8.20. Divide fixed costs by this to find break-even revenue. Review the mix quarterly — when it shifts, your break-even shifts.