Break-Even Calculator

Every business relies on a steady cash flow to ensure its growth and success. This flow covers payroll, inventory costs, monthly payment costs, and other draws. Our break-even calculator can help you as a business owner to measure your cash flow, allowing you to take necessary action to ensure that your operations are running smoothly. It can mark your break-even point, for example, which lets you make future financial decisions as well as other variables. 

What Does Break-Even Mean?

If you’re a new business owner or plan on starting one, there are a few financial things you should know. The first is what break-even means. This point is when total cost and total revenue are equal. In other words, at the break-even point, your business has reached a level of production where costs of production equal the revenue of your products. 

As you can see from our calculator, you’ll need to know four important variables:

• The monthly amount of units you expect to sell.
• How much you’ll charge per unit. 
• The cost of producing each unit. 
• How much your fixed monthly costs will be. 

Most of these are self-explanatory, but here is some detailed information. 

Expected Unit Sales

This is the number of units that your business is expected to sell within a given period, such as per month, quarter, six-month window, or year. 

Price Per Unit

This is the price per unit that you’ll sell. 

Cost Per Unit

This is the cost of producing each unit. 

Fixed Costs

This cost doesn’t change with the increase or decrease in the amount goods sold or produced. They are expenses that need to be paid off by the company, free of any business activity. This means that fixed costs are mostly indirect and don’t apply to the production of goods.

Other Terms to Know

Profit

This is the revenue minus total costs of production and other factors needed to run your business. 

Total Costs

This is the sum of all costs by a company resulting from the production of a certain amount of output of a good or service.

Total Revenue

The total revenue is the complete amount of sales of goods and services. One thing to keep in mind is the marginal revenue, which measures any increases in revenue resulting from selling more products and services.

Total Variable Costs

The total variable cost is the total number of expenses that change depending on how much the business produces or sells a product or service. Variable costs increase or decrease depending on sales volumes. 

Variable Unit Costs

A variable unit cost is the production cost for any units that are affected by changes in a company’s activity level (output). 

How Our Break-Even Calculator Works

Our break-even calculator is specifically designed to make its use as convenient and seamless as possible. We understand that dealing with so many financial variables can be tricky and even scary at times. Our calculator eliminates that fear since all you have to do is input all of the necessary variables in each appropriate box and the calculator will do the rest.