Break-even calculator
Rent and salaries go out whether you sell anything or not. This works out how many units it takes before the month stops costing you money — and what it takes to clear a profit on top.
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Units and revenue needed to cover costs
Only two kinds of cost matter here
Fixed costs turn up whether or not the shutter opens: rent, salaries, the internet connection, the loan instalment, insurance. Variable costs appear only when a sale does — the stock itself, packaging, delivery, the payment-gateway cut. Sort your expenses into those two piles and the arithmetic is short.
Each sale earns its price less its own variable cost. That gap is the contribution, and break-even is simply fixed costs divided by it. Sell ₹200 goods that cost you ₹120 and every unit contributes ₹80; against ₹50,000 of monthly fixed costs you need 625 units before the month pays for itself.
What the number is actually telling you
Break-even is a target, not a verdict. The useful question is whether 625 units a month is something your shop can plausibly sell — around 21 a day. If it isn't, the answer is rarely to work harder at selling: it is to raise the price, cut the variable cost, or shed some fixed cost. Each of those moves the target more than effort does.
Past break-even the maths turns friendly. The fixed costs are already paid, so every further sale drops its whole contribution into profit. This is why the last week of a good month feels different from the first.
Where this is a simplification
It assumes one product at one price, and costs that stay in their own pile. Real businesses sell a mix, and some costs step up at a threshold — a second employee, a bigger godown. Run the numbers per product line, or on a weighted average price and cost, and re-run them whenever a fixed cost steps.
Frequently asked questions
What is the break-even point?
The sales volume at which total income exactly equals total cost — no profit, no loss. Every unit sold after it adds its contribution straight to profit.
What counts as a fixed cost?
Anything you pay whether or not you sell a single item: rent, salaries, internet, software subscriptions, loan instalments, insurance. Variable costs are the ones that appear only when a sale does — the stock itself, packaging, delivery and payment-gateway charges.
What is contribution margin?
The selling price minus the variable cost of that one unit. It is what each sale contributes towards the fixed costs, and once those are covered, towards profit.
Why does the calculator refuse a price below the variable cost?
Because there is no break-even point. If a unit costs as much or more than it sells for, every extra sale widens the loss, so no volume ever covers the fixed costs. The fix is pricing or cost, not volume.
Should I include GST in these figures?
No. GST is collected for the government and paid over at filing, so use prices and costs excluding it. Mixing an inclusive selling price with exclusive costs makes break-even look nearer than it is.