Business Guide
Break-Even Calculator Guide — When Does Your Business Become Profitable?
📉 Calculate Break-Even Point
Units, revenue, margin of safety and profit at any sales volume.
Open Calculator →Break-Even Point Formula
Break-Even Units = Fixed Costs ÷ Contribution Margin Per Unit
Contribution Margin = Selling Price − Variable Cost Per Unit
Break-Even Revenue = Break-Even Units × Selling Price
Example: Online Business India
- Selling price per item: Rs.500
- Variable cost (product + packaging + shipping): Rs.300
- Contribution margin: Rs.200 per unit
- Fixed costs (rent + salaries + ads): Rs.50,000/month
- Break-even = 50,000 ÷ 200 = 250 units/month
- Break-even revenue = 250 × 500 = Rs.1,25,000/month
Margin of Safety
Margin of Safety = (Actual Sales − Break-Even Sales) ÷ Actual Sales × 100
If you sell 350 units: MoS = (350-250)/350 × 100 = 28.6%
Means sales can drop 28.6% before you hit a loss
Common Break-Even Mistakes Indian Entrepreneurs Make
- Not including their own salary as a fixed cost
- Ignoring GST — remember to calculate on GST-exclusive price
- Forgetting Amazon/Flipkart fees as variable costs (15-18% referral)
- Not accounting for product returns (fashion: 20-30% return rate)
- Setting break-even too low — aim for 20-25% margin of safety
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