The break-even formula and what each term means
Break-even point in units = Total fixed costs ÷ (Selling price per unit − Variable cost per unit). The result is the number of units you must sell in a period (month, quarter, year) to cover every cost. Below that number you lose money; above it, every additional unit contributes its full margin to profit.
Fixed costs are expenses that don't change with volume in the relevant range: rent, base salaries, software subscriptions, accountant fees, insurance. Variable costs scale with each unit sold: raw materials, shipping, payment processing fees, packaging, sales commissions. The gap between price and variable cost is the contribution margin — the cash each sale generates to cover fixed costs.
Cost classification: where most analyses go wrong
Semi-variable costs trip up nearly every founder. Electricity has a base subscription plus a usage component. Customer support has full-time staff plus overflow contractors. Cloud hosting has reserved instances plus on-demand bursts. Split these into their fixed and variable parts before running the calculation — lumping the whole bill into 'fixed' makes break-even look artificially low.
Owner compensation is the second trap. If you're not paying yourself a market salary, your break-even number is fictional: the moment you replace yourself with a hired manager, fixed costs jump and the threshold moves. Always include a fair market salary for every role currently filled by founders or family members.
Using break-even for pricing and go/no-go decisions
Break-even shines as a sensitivity tool. Run the calculation three times: at your current price, at +10%, and at −10%. The unit deltas tell you exactly how price-sensitive your profitability is — and whether a discount campaign is worth the volume it would need to generate.
Pair break-even with your realistic monthly sales forecast and your cash runway. A break-even of 800 units/month is fine if you're already selling 1,500; it's a crisis if you're at 200 and have six months of cash. The EuroCalc break-even calculator surfaces all three numbers — units, revenue, and the margin of safety — in one view.
Run your break-even now
Plug your fixed costs, unit price and variable cost into the EuroCalc break-even calculator to see units, revenue and margin of safety instantly.
Open the calculator →Frequently asked questions
What's the difference between break-even in units and break-even in revenue?+
Break-even units tells you how many things to sell. Break-even revenue (= fixed costs ÷ contribution margin ratio) tells you the total euro/franc sales required, which is more useful when you sell many SKUs at different prices.
How do I handle multiple products?+
Use a weighted-average contribution margin based on your historical sales mix. If your mix shifts toward lower-margin SKUs, your blended break-even rises — recalculate quarterly.
Should I include depreciation in fixed costs?+
For an operating break-even, yes — depreciation reflects real capital consumption. For a cash break-even (useful for runway planning), exclude it: depreciation is a non-cash expense.
How quickly should a new product reach break-even?+
Consumer goods: 12–18 months. SaaS: 24–36 months at the cohort level. Restaurants and physical retail: 6–12 months of trading or the unit economics are wrong.
Related guides
Compound Interest Explained: The Math Behind Long-Term Wealth
How compounding really works, why time matters more than rate, and how to use it for retirement, savings and investment planning.
ETFs for Beginners in Europe: The 2026 Starter Guide
How to start investing in ETFs from Switzerland, Germany, France or Italy in 2026 — UCITS rules, accumulating vs distributing, brokers and tax.
FIRE in Europe: Financial Independence and Early Retirement 2026
How FIRE works in Switzerland, Germany, France and Italy — savings rates, the 25x rule, safe withdrawal, healthcare and country traps.