Break-Even Calculator: Find Your Break-Even Point (Free)

The break-even point is where your business stops losing money on each unit sold. Below it, every sale loses money. Above it, every sale starts making profit. This break-even calculator tells you exactly how many units you must sell – and how much revenue you must generate – just to cover your fixed costs.

Break-Even Point Calculator

The Break-Even Formula

Component	Formula
Contribution Margin (per unit)	Price – Variable Cost
Contribution Margin Ratio	Contribution Margin / Price
Break-Even Units	Fixed Costs / Contribution Margin
Break-Even Revenue	Fixed Costs / Contribution Margin Ratio
Profit at volume V	(Price – Variable Cost) * V – Fixed Costs

Industry Break-Even Benchmarks

These are real-world contribution margin (CM) and time-to-overall-break-even ranges based on Bessemer, OpenView, SaaS Capital, NRA (restaurants), and SBA data. The CM ratio is what you should target for a healthy unit economic model. “Months to break-even” refers to time from launch to monthly cash-flow neutrality at typical SMB scale.

Industry	Typical CM Ratio	Months to Break-Even (well-run SMB)
SaaS (subscription, gross margin proxy)	70-85%	18-36 months
Professional services / agency	40-60%	3-12 months
E-commerce / D2C	25-45%	12-30 months
Restaurant / hospitality	55-70% (food cost 28-35%)	6-24 months
Manufacturing	25-40%	24-60 months
Retail (specialty)	35-50%	12-30 months
Construction / project-based	15-30%	varies by project mix
Consulting (solo to 5-person)	50-75%	1-6 months

Note: Months-to-break-even refers to overall startup break-even (recouping initial investment + ongoing operating expenses), not monthly contribution margin break-even, which this calculator computes. If your industry’s CM ratio is far below benchmark, you have either a pricing problem (most common) or a COGS problem – the calculator’s sensitivity table shows which lever moves the needle.

Related Reading

• Break-Even Analysis: Complete Guide
• Profit Margin Analysis: Find & Fix Margin Leaks
• SaaS Pricing Strategy: 7 Models to Maximize ARR
• 13-Week Cash Flow Forecast
• SaaS Financial Metrics: 12 KPIs

FAQ

What is break-even analysis in simple terms?

Break-even analysis tells you the exact volume of sales you need to cover your costs – no profit, no loss. Below it, you’re burning cash. Above it, every additional sale becomes profit. It is the single most important calculation for any business setting prices, hiring, or evaluating a new product line.

How often should I recalculate break-even?

Whenever fixed costs change materially (new hire, office move, software contract), pricing changes, or variable costs change. Best practice: every quarter as part of your finance review. Most growing SMBs see break-even shift by 10-20% per quarter without noticing.

What’s a good contribution margin for an SMB?

It varies wildly by industry. SaaS targets 75-85%, professional services 40-55%, e-commerce 30-50%, manufacturing 25-40%. If your CM is more than 10 points below your industry benchmark, you have a pricing or COGS problem – usually pricing.

Does this calculator work for services and SaaS?

Yes. For services, “unit” = one billable hour or one project. For SaaS, “unit” = one subscription. Variable cost for SaaS includes hosting, payment processing, and customer success cost per customer. The formula is identical.

What’s the difference between break-even and profitability?

Break-even is the minimum to NOT lose money. Profitability is everything above it. A business at exactly break-even is fragile – one bad month puts it in the red. Healthy SMBs run at 20-50% above break-even consistently.