Understanding Breakeven

The breakeven point is when total revenue equals total costs. You neither profit nor lose.

What is Breakeven?

Breakeven is the number of units you must sell to cover all costs. Below that, you lose money. Above that, you profit. Formula: Breakeven units = Fixed costs / (Price per unit - Variable cost per unit).

📊 Use our Breakeven Calculator to find your breakeven point.

Fixed vs Variable Costs

Fixed costs stay the same regardless of output (rent, salaries, insurance). Variable costs change with each unit produced (materials, shipping per item).

Why It Matters

Pricing — Set prices above variable cost plus a share of fixed costs
Sales targets — Know how many units to sell to cover costs
Startups — Understand when you become profitable

For informational purposes only. Not financial advice.