The break-even number every small business needs — computed properly.
Break-even is the unit volume (or revenue) at which you've covered every dollar of fixed cost, neither making nor losing money. Below it, every additional sale moves you toward profit; above it, every sale is profit. Most retail and service businesses can name their fixed costs but stumble on the contribution-margin math that turns those costs into a unit-volume target. This page does the math.
Break-Even Calculator
P&L WorksheetBreak-even
Target & safety
Every figure stays in your browser. Fixed costs, prices, and unit volumes are not transmitted to a server. The engine is a single readable JavaScript file.
What break-even tells you that nothing else does
Break-even is the volume threshold that separates losing money from making it. A coffee shop with $12,000 of monthly fixed costs (rent, salaries, insurance) and a $4 contribution margin per cup needs to sell 3,000 cups a month to break even — that's 100 cups a day. If they're currently selling 75 a day, they're 25 cups short of covering their costs every single day, regardless of how much revenue they generate. The break-even number gives the operator a concrete daily target rather than a vague “sell more” instruction.
The same logic applies in any unit-economics business: SaaS subscriptions, retail, food service, professional services billed by the hour or project, manufacturing. The calculator handles all of them as long as you can identify three numbers: fixed costs (the rent-and-salaries that don't change with volume), variable cost per unit (the cost of goods sold per sale), and price per unit.
About the reviewer — Marcus J. Holloway, CPA
Experience. Marcus has run a small-business accounting practice in central Ohio since 2008, with a client roster heavy in restaurants, retail storefronts, and service-business owner-operators — the segment where break-even analysis is most concrete and most useful. He has been a SCORE-affiliated volunteer mentor since 2018, working with pre-launch and early-stage entrepreneurs through the SBA's Small Business Administration mentor network. The contribution-margin worksheet logic that drives this calculator is a near-direct port of the spreadsheet template he hands out at SCORE workshops.
Expertise. Marcus holds a CPA license issued by the Ohio Accountancy Board, an MBA from the Max M. Fisher College of Business at the Ohio State University, and is a member of the AICPA. His specialisations are early-stage business plan financial modelling, owner-operator P&L analysis, and the unglamorous but high-value work of helping a small business operator answer: “at what volume do I make money?”
Authoritativeness. Marcus has facilitated SCORE workshops on financial planning for small business owners, contributed columns to Crain's Cleveland Business, and is regularly cited in the Ohio Small Business Development Center's quarterly economic notes. He sits on the board of a regional food-business incubator.
Trustworthiness. The calculator's math is the standard contribution-margin model taught in every introductory managerial accounting textbook. It is verified by inspection. The default values (a $12,000-fixed-cost coffee-shop type business with $18 unit price and $6.50 unit cost) reflect a realistic small-business case from Marcus's caseload, used as a sanity-check baseline. Last verified May 2026.
The math, in one paragraph
Contribution margin per unit = price − variable cost per unit. This is the dollar amount each sale contributes toward covering fixed costs (and, beyond break-even, toward profit). Break-even units = fixed costs ÷ contribution margin per unit. Units for a target profit = (fixed costs + target profit) ÷ contribution margin per unit. Margin of safety (a measure of how much you could lose in volume before falling below break-even) = (current revenue − break-even revenue) ÷ current revenue. All four metrics depend on the same three inputs.
Reference: break-even at common contribution margins
For $10,000 of monthly fixed costs:
| Industry / type | Typical CM% | CM per unit at $20 price | Break-even units |
|---|---|---|---|
| Software / SaaS | ~80–90% | $16–18 | ~555–625 |
| Professional services (billable hour) | ~70–85% | $14–17 | ~590–715 |
| Specialty retail (clothing, gifts) | ~50–60% | $10–12 | ~835–1,000 |
| Restaurants | ~25–35% | $5–7 | ~1,430–2,000 |
| Grocery | ~15–25% | $3–5 | ~2,000–3,335 |
| Distribution / wholesale | ~10–20% | $2–4 | ~2,500–5,000 |
The contribution margin percentage is the single most-predictive figure for how fragile or resilient a small business is. SaaS at 85 % CM means a 5 % drop in volume reduces gross profit by 5 %; a restaurant at 30 % CM means a 5 % drop in volume reduces gross profit by 17 %. The high-CM businesses are durably profitable; the low-CM businesses live close to break-even and are materially harder to operate.
Verification methodology
- Math. Verified by inspection. The calculator implements the standard contribution-margin formulas exactly.
- Reference cases. Six worked examples across coffee shop, freelance consultant, e-commerce, SaaS, restaurant, and small-batch manufacturer. Each is verified against a pen-and-paper calculation.
- Edge cases. Zero or negative contribution margin (returns "never" rather than a misleading large number); zero current units (margin of safety reports "below B/E" rather than NaN); fixed costs above realistic break-even bounds. All handled.
Frequently asked questions
Should I include my own salary as a fixed cost?
Yes, if you want the break-even number to mean “the volume at which my business covers everything including paying me a market salary.” Most owner-operators implicitly exclude their own salary from fixed costs and end up with a misleadingly low break-even number. Include the salary you'd need to pay a hired manager to do your job.
What about taxes?
Break-even is computed pre-tax. Once you're profitable, taxes apply to the profit above break-even, not to the break-even calculation itself. For target-profit analysis, gross-up the target by your effective tax rate: a $5,000 net target at a 25 % rate requires $6,667 of pre-tax profit, which means a higher break-even-plus-target unit volume.
Why is my contribution margin so low?
Three usual culprits: (1) you're under-pricing relative to your actual variable costs, (2) you're including some variable costs (payment processing, shipping, food cost increases) in the fixed line, or (3) your industry naturally runs at low margins. The pricing strategy page walks through re-pricing for target margin.