Financial plan

Calculate break-even

The break-even point shows the volume or revenue at which you stop making a loss. It is one of the most important figures in your financial planning.

Calculator

Calculate your break-even point

Enter your figures – the calculator shows straight away from which volume and turnover you start making a profit.

Contribution margin / unit–
Break-even volume–
Break-even turnover–

Enter all three figures to calculate your break-even point.

The formula

Break-even is reached when contribution margins cover fixed costs. You calculate the required sales volume by dividing fixed costs by the contribution margin per unit (selling price minus variable costs per unit).

A simple example

With £50,000 in fixed costs and a contribution margin of £50 per unit, break-even is at 1,000 units sold. Profit only starts from the 1,001st unit. This turns an abstract number into a concrete target.

What break-even tells you

The sooner you can reach break-even, the lower your risk. It is important that your cash reserve lasts until then. planix helps you think about break-even and funding requirement together.

Frequently asked questions

How do I calculate the break-even point?

Fixed costs divided by the contribution margin per unit gives the volume from which you stop making a loss.

What is the contribution margin?

The selling price per unit minus the variable costs per unit. It shows how much each sale contributes to covering fixed costs.

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