Your break-even point is the number of sales per month that covers your fixed costs. Work out the profit on one sale, which is price minus the cost of serving it, then divide your fixed costs by that figure. The answer is how many customers you need before the business stops consuming money and starts producing it.
Break-even units = fixed monthly costs ÷ (price − variable cost per unit)
Tells you how many units you need to sell each month to cover your fixed costs at the price and variable cost you've set. Best for products with a meaningful per-unit variable cost. Physical goods, marketplaces, usage-based tiers. For pure SaaS where per-user cost is near-zero, the number compresses to noise; use the CAC/LTV calculator instead.
Your numbers
Salaries + rent + infra base. Costs that don't change with the next sale.
Average price per customer per month.
Cost per additional customer: payment fees, infra, support time, AI inference.
The verdict
$17.1K in revenue
Realistic with one working acquisition channel. The maths is no longer the obstacle, which promotes your problem from arithmetic to marketing.
What the number means
| Units needed per month | Reading | What to do about it |
|---|---|---|
| Variable cost above price | Act now | You lose money on every sale, so no amount of selling reaches break-even. Volume is not a cure here, it is an accelerant. Fix the price or the cost of delivery first. |
| Over 1,000 units a month | Fragile | Reachable in theory, punishing in practice. A thousand new customers a month from a standing start needs a genuinely leveraged channel. Raising the price is usually the shorter road. |
| 100 to 1,000 units a month | Healthy | Realistic with one working acquisition channel. The maths is no longer the obstacle, which promotes your problem from arithmetic to marketing. |
| Under 100 units a month | Healthy | Comfortably reachable. At this volume the risk is not whether the sums work but whether enough people want it. Go and find out. |
Worked examples
| Situation | Numbers in | Answer out | Verdict |
|---|---|---|---|
| SMB SaaS | Fixed $15,000 · Price $99 · Variable $12 | 173 customers | Reachable. One channel that works gets you there inside a year. |
| Consultancy | Fixed $8,000 · Price $2,000 · Variable $200 | 5 clients | Very reachable. Five good conversations, not five thousand visitors. |
| Low-priced consumer app | Fixed $6,000 · Price $9 · Variable $4 | 1,200 subscribers | High volume. Viable only with a channel that scales cheaply. |
| AI product priced below its own inference bill | Fixed $10,000 · Price $19 · Variable $23 | Never | Negative margin. Every signup deepens the hole. Repricing is the only fix. |
How this is calculated
Unit margin = price − variable_cost_per_unit.
Break-even units = fixed_monthly_cost / unit_margin.
Revenue at break-even = break_even_units × price.
If unit margin is zero or negative, no volume gets you to break-even. Selling more loses more. The fix is on the unit-economics side (raise price, cut variable cost), never on the volume side.
What this doesn't tell you
- Whether you can acquire the volume. Break-even at 200 units/month is meaningless if your channels can only deliver 30. Pair this with the CAC/LTV calculator.
- What the right price is. The calc assumes a fixed price. If buyers won't pay your current price, no break-even math saves you; use the pricing-strategy calc.
- When you'll get there. Break-even units / month is the steady-state target. Most startups hit it 12-36 months in, not month 1.
What is the break-even point in simple terms?
It is the moment the business stops costing you money to run. Every sale contributes a slice of profit towards your fixed costs, and break-even is the number of slices that covers them exactly. One sale past it and the business is contributing to your life rather than the other way round. Below it, you are personally subsidising every customer, which is a generous thing to do and a poor thing to do by accident.
How do you calculate break-even in units?
Divide fixed costs by contribution margin, which is price minus the variable cost of serving one customer. If your fixed costs are ten thousand a month and each sale contributes fifty, you need two hundred sales. The word contribution is doing real work in that sentence: it is what the sale contributes towards the costs you owe whether you sell anything or not, such as salaries, rent and the software subscriptions nobody remembers signing up for.
Why does cutting my price make break-even so much worse?
Because price cuts come out of contribution margin, and contribution margin is the denominator. Drop a $99 product with $12 of variable cost to $79 and you have cut the price by twenty percent but the margin by twenty-three, pushing break-even from 173 customers to 224. The discount feels like a small gesture to the buyer and lands as a much larger one on you. This asymmetry is why discounting is the most expensive marketing channel most founders ever use.
Put this on your own site
Free to embed, no permission needed, no tracking script smuggled in. The only condition is the credit link that comes with it, which seems a fair trade for the arithmetic.
<iframe src="https://shipfit.ai/calculators/embed/break-even" width="100%" height="640" style="border:1px solid #e2e8f0;border-radius:16px;" title="Break-even calculator by ShipFit" loading="lazy"></iframe>Use this with
The Lean Startup
Validated learning, the build-measure-learn loop, what an MVP actually is, the three engines of growth, and the ten pivots Ries names rather than one.
Pricing Validation
Most founders pick a price by looking at competitors and shaving 20%. That's not pricing strategy, it's matching. Real pricing validation produces a price you can defend against your own ego and your buyer's pushback.
How do you find product-market fit?
Use Rahul Vohra's Superhuman PMF Engine. (1) Survey active users with the Sean Ellis question 'how would you feel if you could no longer use this?'. (2) Segment respondents by 'very disappointed' / 'somewhat disappointed' / 'not disappointed'. (3) Profile your fans (the very disappointed) to find your real ICP. (4) Build a roadmap that's half doubling-down on what fans love and half closing the on-the-fence blockers. (5) Re-run quarterly. The score should rise.
Burn rate calculator
Gross burn lies. Net burn tells you the truth.
Runway / Burn Rate
Burn rate is how much cash you spend each month. Runway is how many months that cash will last given current burn. If runway falls under three months, you find a job or raise NOW.
Frequently asked questions
What goes in 'fixed' vs 'variable' costs?
What if my variable cost per unit is bigger than my price?
Why does break-even ignore acquisition cost?
Is this per-month or total?
Break-even assumes people are buying.
That is the assumption worth testing first. ShipFit runs the nine decisions that decide whether anyone shows up at your price at all.