What Is Break-Even Analysis?
Break-even analysis answers: How many units do I need to sell to cover all my costs? At break-even, total revenue equals total costs.
Run your own numbers with our Break-Even Calculator.
The Break-Even Formula
Break-Even Units = Fixed Costs / (Selling Price - Variable Cost per Unit)
Understanding Your Costs
Fixed Costs
Website hosting, software subscriptions, equipment, insurance, rent.
Variable Costs
Materials, packaging, shipping, payment processing fees, marketplace fees.
Example: Selling Candles on Etsy
- Fixed costs: $150/month
- Variable cost per candle: $8
- Selling price: $24
- Contribution margin: $16
- Break-even: 10 candles/month
5 Ways to Lower Your Break-Even Point
- Reduce fixed costs
- Lower variable costs with bulk buying
- Raise prices if your product delivers value
- Bundle products for higher margins
- Focus on high-margin items
Track your overall finances with our Net Worth Calculator. Try our Break-Even Calculator to map your path to profitability.