Free calculator
Break-even calculator
Your fixed costs and gross margin give the sales you need each month just to stand still. Add a loan repayment and the expected benefit, and see whether new funding earns its keep.
Your break-even
Monthly sales to break even
$0
- Break-even with the repayment$0
- Current safety margin$0
- Daily sales needed (30-day month)$0
- Extra profit from the funding$0
- Funding pays for itself inn/a
A planning estimate, not financial advice or an offer of finance.
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How break-even is calculated
Break-even sales equal monthly fixed costs divided by gross margin. With $42,000 of fixed costs and a 45 percent margin, each dollar of sales contributes 45 cents toward those costs, so you need about $93,000 of sales to cover them. Add a loan repayment and fixed costs rise, so the break-even point rises with them.
The safety margin
The gap between current sales and break-even is your margin of safety. A thin one means a single slow month can tip the business into a loss. A healthy one gives you room to carry new commitments, absorb a late payer or ride out a quiet season.
Does the funding pay its way?
Funding should either earn more than it costs or prevent a loss bigger than its cost. The calculator multiplies the extra sales you expect by your margin to estimate the extra monthly profit, then compares it with the total cost of the funding. A short payback period is a good sign; a payback longer than the loan term is a reason to rethink the amount or the plan. Our guide is borrowing to grow worth it? goes deeper, and break-even explained covers the theory with worked examples.
Ways to lower your break-even point
- Lift margin through pricing, supplier deals or a better product mix. See pricing and margin for cash flow.
- Turn fixed costs into variable ones where you can, for example by using contractors for peaks.
- Cut costs that do not drive sales, starting with subscriptions and duplicated services.
If the numbers show the funding earns its place, start a 60-second enquiry. No credit check to enquire, and a real person reviews it.
Questions about this calculator
What is a break-even point?
It is the level of sales at which the business covers all its costs and makes neither a profit nor a loss. Below it you are losing money each month; above it, every extra sale contributes profit.
What is gross margin?
Gross margin is the share of each sale left after the direct cost of making or buying what you sold. If something sells for $100 and costs $60 to supply, the gross margin is 40 percent.
Why include loan repayments?
Repayments are a fixed monthly commitment while a loan runs. Adding them shows how much extra you need to sell to carry the funding, which is the honest test of whether borrowing pays its way.
How is the payback period worked out?
It divides the total cost of the funding by the extra monthly profit you expect the money to generate. If the money is expected to add profit of $4,000 a month and the funding costs $12,000 in total, it pays for itself in about three months.
Is my information saved?
No. The calculator runs in your browser and nothing is stored or sent.
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