Free tool
Breakeven calculator
Enter your monthly fixed costs, what you charge and what each unit costs you to deliver. This calculator returns the number of units and the revenue you need each month to break even, along with the contribution and gross margin behind them. Free, no sign-up, and nothing you type leaves your browser.
Breakeven
800 units
or £40,000 of revenue a month
- Contribution per unit
- £25
- Gross margin
- 50.0%
The formula
Breakeven units = fixed costs ÷ contribution per unit, where contribution is your selling price minus your variable cost. Multiply the answer by your price and you have breakeven revenue.
At £20,000 of fixed costs a month, a £50 price and a £25 variable cost, each unit contributes £25. Divide £20,000 by £25 and you need 800 units a month, which at £50 each is £40,000 of revenue.
If you sell many different things, use gross margin instead of a single unit: divide fixed costs by your margin as a decimal. £20,000 at a 50% margin is the same £40,000.
What this number cannot tell you
A breakeven calculation freezes your business for a moment and asks what would happen if nothing changed. It is a good sanity check and a poor plan, because the things it holds still are the things that move.
Fixed costs are not fixed
They are fixed against volume, not against time. Every hire, every lease, every new subscription raises the bar permanently, and usually before the revenue that justified it arrives.
One price, one product
Most businesses sell several things at several margins. Blended margin shifts whenever the mix shifts, so the same revenue can break even one month and not the next without a single price changing.
No seasonality
A monthly breakeven figure implies every month is the same. A business that clears the bar comfortably on average can miss it for a whole quarter.
It says nothing about cash
Breakeven is a profit measure. Payment terms, VAT, corporation tax, stock and loan repayments all move money without touching it, which is why profitable businesses still run out.
You get a threshold, not a date
"£40,000 a month" does not tell you when you will get there, or whether your costs will have grown by the time you do.
The question underneath: when, not how much
What most people actually want from a breakeven calculation is a date. Not "we need £40,000 a month" but "we get there in March, assuming we hire in January". A formula cannot answer that, because the answer depends on how your sales grow and how your costs grow alongside them.
bluprnts answers it by building the profit and loss month by month from your actual plan: your products and prices, the sales you expect and when they land, the people you employ and the ones you intend to hire, your costs and your financing. The breakeven month is then simply the month profit turns positive and stays there.
Because it is derived rather than assumed, it moves when the plan moves. Add a hire in spring and you can watch breakeven slide out and then come back in as revenue catches up, which is the actual shape of the decision you are making. And it sits beside your runway, so you can see whether you have the cash to reach the month you are aiming at.
| This calculator | A forecast in bluprnts |
|---|---|
| A revenue threshold | The month you cross it, read off the forecast |
| Fixed costs held still | Every hire and cost on the timeline it actually starts |
| One price and one margin | Every product priced separately, with mix handled for you |
| Profit only | Breakeven and runway together, from the same model |
| Re-type the numbers to test a decision | Scenarios saved side by side against your base case |
Breakeven questions
- How do you calculate the breakeven point?
- Divide your fixed costs for a period by the contribution each unit makes, which is its selling price minus its variable cost. A business with £20,000 of monthly fixed costs selling a product at £50 that costs £25 to make contributes £25 a unit, so it needs 800 units a month to break even. Multiply by the price and that is £40,000 of monthly revenue.
- What is the difference between fixed and variable costs?
- Variable costs move with what you sell: materials, production, packaging, delivery, payment processing fees, sales commission. Fixed costs are the ones you pay whether you sell anything or not: rent, salaries, software, insurance, professional fees. The test that settles most cases is whether the cost would still exist next month if you sold nothing.
- What is the difference between breakeven units and breakeven revenue?
- They are the same answer in two currencies. Breakeven units is how many you have to sell; breakeven revenue is what those sales are worth. Units are easier to act on when you sell one main thing, and revenue is easier when you sell many different things at different prices.
- Does breaking even mean I will not run out of money?
- No, and this is the most common and most expensive misunderstanding. Breakeven is measured on profit, not cash. A business can cross into profit and still be short, because customers pay after you have paid your suppliers, VAT and corporation tax arrive in lumps, stock is bought before it is sold, and loan repayments never appear on the profit and loss at all. Your breakeven month and your runway are separate questions.
- What if I sell several products at different prices?
- Use your blended gross margin rather than a single unit, and read the answer as revenue rather than units. Divide your fixed costs by your gross margin expressed as a decimal: £20,000 of fixed costs at a 50% blended margin needs £40,000 of revenue. The caution is that blended margin moves whenever your product mix moves, so a month that sells more of your low-margin line needs more revenue to break even than a month that does not.
Find the month you break even.
Build the forecast the formula is standing in for.
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Where to next
- How to calculate breakevenThe formula, the traps, and the breakeven month
- BreakevenThe definition, in one paragraph
- Gross marginThe input that drives it
- Runway calculatorThe other half of the question: how long the cash lasts
- Cash flow forecastWhere the breakeven month comes from in the product
- PricingPlans and trial terms