Break-Even Calculator: When Does Your Business Turn Profitable?
The Formula Every Entrepreneur Must Know
Break-Even Point = Fixed Costs / (Selling Price – Variable Cost Per Unit)
Break-even tells you how many units you must sell (or how much revenue you need) before your business stops losing money. Below this point, every sale is a loss. Above it, every sale is profit.
Worked Example: Cloud Kitchen
| Item | Amount |
|---|---|
| Monthly rent + utilities (fixed) | ₹80,000 |
| Staff salaries (fixed) | ₹60,000 |
| Marketing (fixed) | ₹20,000 |
| Total fixed costs | ₹1,60,000/month |
| Average order value | ₹350 |
| Variable cost per order (ingredients + packaging + delivery) | ₹180 |
| Contribution per order | ₹170 |
| Break-even orders | 941 orders/month (≈31/day) |
Lowering Your Break-Even
- Reduce fixed costs (negotiate rent, outsource non-core tasks)
- Increase selling price (if market allows)
- Reduce variable costs (better supplier deals, less waste)
- Increase volume (marketing, partnerships)
Model your business with the break-even calculator.