Find the exact sales floor for your business: fixed costs divided by the contribution left after variable costs and fees—then calculate the volume needed for profit.
Break-even is the sales level where contribution covers fixed costs and profit is zero. It answers a narrow but essential question: how many units, jobs, or dollars of revenue must the business sell before it stops losing money? Once you know that floor, you can calculate the volume needed for a target profit and the margin of safety at your expected sales level.
The free Break-Even Calculator accepts monthly fixed costs, price, variable cost, expected units, target profit, and a fee percentage. The Virtual CFO Toolkit’s Break-Even & Pricing sheet carries the same work into a monthly finance routine with contribution margin, break-even units and revenue, profit at current volume, margin of safety, and the price needed for a target profit.
Classify costs by behavior, not by how often they are paid. Rent that stays the same across normal volume is fixed. Materials, direct labor that scales with work, commissions, and selling fees usually belong in variable cost or the fee line.
Suppose fixed costs are $6,000 per month, price is $100, variable cost is $55, and fees are 5% of price. Fees take $5, leaving contribution of $40 per unit. Break-even is $6,000 ÷ $40 = 150 units, or $15,000 of revenue. To earn $2,000, treat the target as $8,000 of contribution and sell 200 units. If expected sales are 220 units, the margin of safety is 70 units above break-even.
A very high break-even point is not solved by optimism. Raise price, reduce variable cost, remove a fee-heavy channel, or cut fixed costs until contribution supports a reachable volume. The Toolkit also calculates the price needed for a target profit, making the trade-off explicit before you commit to a sales goal.
The $59 Virtual CFO Toolkit includes Break-Even & Pricing alongside a 12-month Cash Flow Forecast, Budget vs. Actual, KPI Dashboard, AR Aging & Collections, and a CFO Monthly Checklist. It works in Excel and Google Sheets.
It is what remains from a sale after variable costs and percentage fees. That remainder pays fixed costs first and becomes profit only after break-even.
Calculate break-even units first—fixed costs divided by contribution per unit—then multiply those units by the selling price.
It is the distance between expected sales and break-even sales. A larger margin means the business can absorb a weaker month before it begins losing money.
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