Advanced options
Break-even units = fixed costs / (price minus variable cost per unit). Below it every sale reduces the loss; above it, each sale's full contribution becomes profit.
What The Break-Even Calculator Works Out
- Break-even sales: fixed costs divided by the contribution per unit (price minus variable cost), rounded up to whole units. Rent, salaries, insurance and software of GBP 5,000 a month against a GBP 25 product costing GBP 15 to deliver means 500 sales a month, GBP 12,500 of revenue.
- Contribution per unit: what each sale leaves after its own variable costs (materials, postage, per-unit labour) to pay towards the fixed costs. The contribution margin (contribution over price, 40% in the example) converts any revenue target into required sales.
- Per day / week: the monthly figure turned into a daily and weekly pace (about 17 sales a day in the example), which makes the number operational rather than decorative.
- Target profit (advanced): adds the profit you want to the fixed costs before dividing by the contribution, giving the sales needed to earn it rather than merely stand still.
- Expected sales and margin of safety (advanced): the monthly profit or loss at your expected volume, and the margin of safety (expected sales minus break-even sales as a percentage of expected sales). A thin margin is the earliest warning that a downturn will bite; it is worth tracking monthly.
- Payment or platform fee (advanced): card processing (roughly 1.5% to 3%) or marketplace commission (often 10% to 15%) taken as a percentage of the price. It is a variable cost that is easy to forget.
- Price includes VAT (advanced): if you are VAT registered and your ticket price includes 20% VAT, only the net price is yours. Stripping it out before costing stops you treating HMRC's share as contribution.
- Price sensitivity (advanced): re-runs the break-even at a changed price. Raising the price moves both the margin and the volume, so the answer shows how many fewer (or more) sales you need, not whether customers will still buy.
- Revenue per extra GBP 1,000 of overhead (advanced): GBP 1,000 divided by the contribution margin, the extra sales revenue needed to absorb a cost rise (GBP 2,500 at a 40% margin). The simple model assumes one product at one price and ignores cash timing, so a profitable-on-paper business can still die waiting for invoices.