Break-Even Worksheet
Sort the costs into the right two buckets first — that is where this calculation goes wrong, not in the arithmetic.
BFCBrilliance · bfcbrilliance.com/tools/break-even-calculator
The numbers
- Business / product
- Period
- TOTAL FIXED COSTS
- Price per unit
- Variable cost per unit
- CONTRIBUTION MARGIN
- Margin %
- BREAK-EVEN UNITS
- Per day
- Break-even revenue
Fixed costs — paid whether you sell or not
| Cost | Per period | Notes |
|---|---|---|
Variable costs — only when you sell one
| Cost | Per unit | Notes |
|---|---|---|
The arithmetic
- Contribution margin
- price - variable cost per unit
- Break-even units
- fixed costs / margin, rounded UP
- Break-even revenue
- break-even units x price
- Margin %
- margin / price
- ⚠ Revenue ≠ profit
- break-even revenue is well above fixed costs
- ⚠ Margin ≤ 0
- no break-even exists — every sale loses money
- Not included
- tax, step-changes in fixed costs, volume discounts
Costs people put in the wrong bucket
- Payment processing fees — VARIABLE, and easy to forget entirely
- Shipping and packaging — variable
- Sales commission — variable
- Returns and refunds — effectively variable
- Software subscriptions — fixed, even the per-seat ones month to month
- Your own time — fixed if salaried, variable if paid per job
- Storage — usually fixed, until you outgrow it in one step
- Anything billed 'per user' or 'per order' — check which it really is
The margin, not the price, pays the rent
A 25 dollar product with 9 dollars of variable cost contributes 16 dollars per sale, not 25. Every decision that moves the margin — a discount, a price rise, a cheaper supplier, a payment processor with lower fees — moves your break-even far more than it moves the price. A 10% discount here costs 16% of your margin and adds 47 units to the target.
A busy month can still lose money
Break-even revenue is higher than fixed costs, because the revenue also has to fund the variable costs of everything you sold. Revenue is not money you keep. If the top line looks healthy and the bank account does not, the gap is almost always sitting in this distinction.