Find the exact point
your business turns profitable.

What break-even analysis tells you

Your break-even point is the moment your total revenue exactly equals your total costs — no profit, no loss. Every unit you sell after that point contributes directly to profit. It's one of the first numbers we help clients establish, because it turns "is my pricing sustainable?" from a guess into a calculation.

The three numbers behind the formula

• Fixed costs — expenses that stay the same regardless of how much you sell, such as rent, insurance, core salaries and software subscriptions.
• Price per unit — what a customer pays for one unit of your product or service.
• Variable cost per unit — costs that rise and fall directly with sales volume, such as materials, packaging, freight or sales commission.

Price minus variable cost is your contribution margin — the amount each sale contributes toward covering fixed costs, and then profit.

Worked example

How to use the results

A few important caveats

• This is a single-product model. If you sell several products or services at different margins, you'll get a more accurate figure from a gross-profit break-even calculation — ask us and we'll run it for you.
• It doesn't account for tax, loan repayments, owner drawings or seasonal swings in demand — all of which we factor in when we prepare a full cash flow forecast for clients.
• Treat the output as a planning guide, not a guarantee — real-world costs shift, so we recommend revisiting this quarterly or whenever a major cost changes.