How to read your break-even point
Your contribution margin is what each sale leaves over after its own costs. Divide your fixed costs by it and you get the number of sales that covers the month. Every sale after that is profit.
- Below break-even? The levers are price, variable cost per sale, and fixed costs, in that order of speed.
- Include your own pay in fixed costs if you're a sole owner; otherwise "break-even" means working without pay.
- Use real numbers from your books. A month-end profit and loss statement shows your actual fixed and variable costs.
Next: check your pricing with the profit margin & markup calculator.
Sources
Facts checked against the sources above as of October 20, 2026. Educational information, not tax or legal advice. Results are estimates based on the information you enter; your situation may differ. Using this tool doesn't create a client relationship.