Break-Even Calculator
Break-even calculator. Enter fixed costs, variable cost per unit and selling price to find your break-even point.
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What to work out next
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Break-even is the point where total revenue covers total costs. Below it you lose money; above it, you make a profit. Formula: Break-even units = Fixed costs ÷ (Price − Variable cost).
What this calculator does
Finds the number of units, covers or orders you must sell to cover your fixed costs, based on your selling price and your variable cost per unit.
Who it is for
- Operators setting a weekly or monthly sales target for a site.
- New businesses testing whether a site's rent is survivable at realistic covers.
- Anyone deciding whether to open on a quiet day.
How to use it
- Enter your fixed costs for the period - rent, rates, salaried staff, insurance, subscriptions, finance.
- Enter the net selling price per unit or the average spend per cover.
- Enter the variable cost per unit - food, drink, hourly labour, packaging and card fees.
- Read the break-even volume and the sales value it represents.
The formula
- Contribution per unit = Net selling price - Variable cost per unit
- Break-even units = Fixed costs / Contribution per unit
- Break-even sales = Break-even units x Net selling price
Worked example
A restaurant with £18,000 of monthly fixed costs, £26.00 average net spend per cover and £9.10 of variable cost per cover.
- Contribution per cover = £26.00 - £9.10 = £16.90
- Break-even covers = £18,000 / £16.90 = 1,065.1, so 1,066 covers
- Break-even sales = 1,066 x £26.00 = £27,716
You need 1,066 covers a month - about 41 a day over 26 trading days - before the site makes a penny of profit.
How to read your result
- Everything above break-even converts at the contribution rate, so in this example each extra cover adds £16.90 of profit, not £26.00.
- If break-even volume is close to your practical capacity, the model is fragile and one quiet week wipes out the month.
- A small rise in contribution moves break-even a long way, which is why a 50p price rise matters more than it sounds.
What to do next
- Compare break-even covers with your realistic capacity from the covers and revenue forecast calculator.
- Attack the largest fixed cost first - it moves break-even further than trimming variable costs.
- Recalculate whenever rent, wage rates or energy contracts change.
Common mistakes to avoid
- Putting hourly labour in fixed costs. Rota hours that flex with trade are variable.
- Using gross prices while costs are net.
- Forgetting that break-even is a monthly figure - a good weekend does not mean the month is safe.
Assumptions and limitations
- Assumes one average selling price and one average variable cost; a mixed menu will vary around it.
- Excludes seasonality, drawings, loan capital repayments and tax.
Dumb Bambi provides general business information, not accounting, tax or legal advice. Read our calculation methodology or tell us about a mistake.
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Frequently asked questions
What are fixed vs variable costs?+
Fixed costs don't change with sales (rent, salaries). Variable costs scale with each unit sold (ingredients, packaging).
Why is my break-even infinite?+
If variable cost per unit is greater than selling price, you lose money on every sale and never break even.