Free tool · Break-even calculator
Break-even Calculator
Find how much you must sell each month and each day to cover rent, salaries and bills, and how much more to reach the profit you want. Use a single item's price and cost, or your shop's average margin when you sell hundreds of products.
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Fixed costs per month
Costs you pay even on a day with no sale.
Software, loan instalment, security, generator fuel.
Stock or ingredients, packing, delivery per item.
Break-even sales per month
Rs 0
Enter costs and price
- Fixed costs per month
- Rs 0
- Kept from each sale (contribution)
- —
- Profit per item before fixed costs
- —
- Items to sell per month
- —
- Items per day
- —
Break-even sales = fixed costs ÷ share of each sale you keep after its cost.
Short answer
Find how much you must sell each month and each day to cover rent, salaries and bills, and how much more to reach the profit you want. Use a single item's price and cost, or your shop's average margin when you sell hundreds of products.
Roman Urdu mein
Kiraya, tankhwah aur bill nikalne ke liye mahine aur roz kitni Sale chahiye, ye yahan nikalein. Jitna Profit chahiye wo likhein to us ke liye zaroori Sale bhi dikhegi.
Key facts
- Break-even sales
- Fixed costs ÷ share of each sale you keep after its cost
- Break-even items
- Fixed costs ÷ (price − cost per item)
- With a profit target
- (Fixed costs + target) ÷ share kept
- Two ways in
- One main item, or the average margin of a many-product shop
How to use the break-even calculator
Step 1: Add your fixed costs
Rent, salaries, electricity, gas and internet, and anything else you pay every month whether or not you sell: generator fuel, software, a loan instalment.
Step 2: Choose how you sell
One main item for a business with one product or a typical plate or service. Many products for a shop, where you enter the average gross margin instead.
Step 3: Enter price and cost, or the margin
For one item, its selling price and its own cost. For many products, the average margin from your profit report, or from a week of bills.
Step 4: Set days open and a profit target
Days open turns the monthly figure into a daily one. A profit target shows the sales needed to also pay you.
How it's calculated
Every sale leaves something after paying for the goods sold: the contribution. For a single item it is price − cost. As a share of sales it is the gross margin. Break-even is the sales level where those contributions add up to the fixed costs:
- Break-even sales = fixed costs ÷ contribution share
- Break-even items = fixed costs ÷ contribution per item
- Sales for a profit target = (fixed costs + target profit) ÷ contribution share
Above break-even, the whole contribution of each extra sale is profit. Below it, the shop is paying its costs out of savings or credit.
Worked example
A general store pays 60,000 rupees rent, 90,000 rupees salaries, 30,000 rupees in bills and 20,000 rupees of other fixed costs: 200,000 rupees a month. Its average gross margin across all products is 16%.
- Break-even sales = 200,000 ÷ 0.16 = 1,250,000 rupees a month
- Open 30 days, that is about 41,700 rupees of sales a day
- For 100,000 rupees of profit on top: 300,000 ÷ 0.16 = 1,875,000 rupees a month, about 62,500 a day
Raising the average margin from 16% to 18%, by pricing slow items better or cutting wastage, lowers break-even to about 1,111,000 rupees: the same shop needs roughly 139,000 rupees less sales every month. Nafaa's reports show daily sales and margin, so you can see each day whether you are above the line.
Common questions
What counts as a fixed cost?
Anything you pay every month even if no customer walks in: rent, salaries of permanent staff, minimum electricity and internet bills, security, software, loan instalments and generator upkeep. Costs that rise with each sale, such as the goods themselves, packing, delivery and card fees, are variable and belong in the cost per item or the margin instead.
Where do I get my average margin?
The best source is a profit report built from real bills, which shows sales and gross profit for the month; margin is profit divided by sales. Without one, add up a week of bills at sale price and at cost price and divide the difference by the sales total. Use the profit margin calculator to check a few key items by hand.
Can a restaurant use this calculator?
Yes. Use One main item with your average bill per customer as the price and the food cost of that bill as the cost, or use Many products with your gross margin after food cost. Put staff salaries, rent, gas and electricity in fixed costs. The daily figure then tells you the sales, or covers, you need on a normal day.
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Glossary
Break-Even Point
The break-even point is the level of sales at which gross profit exactly covers fixed expenses, so the business makes neither profit nor loss.