Small Business Break-even

Break-even Calculator

How many units you must sell each month to cover your costs, and what you earn at any sales volume. Fixed costs are what you pay even if you sell nothing — rent, salaries. Each sale keeps the price minus what that unit cost you.

250 units
Break-even units a month
Rs. 125,000
Sales needed a month

You keep per unit: Rs. 200

How it was worked out
Fixed costs a monthRs. 50,000
Selling price per unitRs. 500
Cost per unitRs. 300
You keep per unitRs. 200
Break-even units a month250 units
Break-even sales a monthRs. 125,000
At your expected volume300 units
Profit at that volumeRs. 10,000

At that volume you make a profit of Rs. 10,000 a month.

This is a simple estimate. It does not count tax, loan interest or one-off costs, and the fixed costs are per month, so the break-even is per month too.

Break-even units = fixed costs per month ÷ (selling price per unit − cost per unit), rounded up to a whole unit. Break-even sales = break-even units × selling price. Profit at any volume = (units × what you keep per unit) − fixed costs.

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Questions

Anything you pay every month whether you sell or not: shop rent, salaries, the phone and internet bill, insurance. The cost of the goods you sell is not fixed — that is the cost per unit.

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