Rent, salaries, software — costs that don't change with sales.
Materials, packaging, fees — costs per unit sold.
You cover your fixed costs after selling 334 units (£16,667 in sales). Every unit beyond that adds £30 straight to profit.
Revenue vs total cost
Break-even is where the two lines cross.
How break-even is calculated
Break-even is the point where total sales exactly cover total costs — no profit, no loss. The key figure is your contribution margin: the profit each unit makes after its own variable cost.
Contribution per unit = Price − Variable cost per unit
Break-even units = Fixed costs ÷ Contribution per unit
Break-even revenue = Break-even units × Price
Why it matters
Break-even tells you the minimum you have to sell before you make a penny of profit. It's the first sanity check on any pricing decision, new product, or cost increase — if the break-even point is higher than you can realistically sell, the numbers don't work.
Frequently asked questions
What's the difference between fixed and variable costs?
Fixed costs stay the same no matter how much you sell (rent, salaries, software). Variable costs rise with each unit you make or sell (materials, packaging, payment fees, delivery).
What is contribution margin?
It's the price of a unit minus its variable cost — the amount each sale 'contributes' towards covering your fixed costs, and then to profit once break-even is passed.
My break-even looks impossible. What now?
You have three levers: raise the price, reduce the variable cost per unit, or cut fixed costs. Even small changes to price or variable cost move the break-even point a lot because they change the contribution margin directly.
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These calculators are for general guidance only and use the figures you enter. They are not financial, accounting or tax advice. Always check important decisions with a qualified professional.