Business Break-Even Calculator

Work out the revenue a business must bill to cover all fixed costs at its blended gross margin.

About Business Break-Even Calculator

Because only the gross margin portion of revenue reaches fixed costs, break-even revenue is always larger than fixed costs — by a factor of one divided by the margin. At a 62% margin every unit of overhead needs about 1.6 units of sales. Owners routinely set revenue targets equal to their cost base, which understates the requirement by the whole gross margin gap.

Formula

Business Break-Even

Break-even revenue = fixed costs ÷ gross margin

gross margin: Share of revenue left after direct costs, expressed as a decimal

Worked example

With the default values below, Business Break-Even Calculator returns Break-Even Monthly Revenue of $72,580.65. Change any input above and every figure here is recalculated in your browser.

Inputs used

Fixed and overhead costs per monthminimum 0: 45,000
Blended gross marginaccepts 0–100 %: 62 %
Current monthly revenueminimum 0: 60,000

Results

Break-Even Monthly Revenue: $72,580.65
Gap to Break-Even: $12,580.65
Current Monthly Profit: -$7,800.00
Break-Even Annual Revenue: $870,967.74
Verdict: Needs 12581 more monthly revenue to break even

Step by step

1Values used
2Business Break-Even
3Break-Even Monthly Revenue= 72,580.65
4Gap to Break-Even= 12,580.65
5Current Monthly Profit= -7,800.00
6Break-Even Annual Revenue= 870,967.74
7Verdict= Needs 12581 more monthly revenue to break even

Assumptions and limits

The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Business Break-Even calculated?

Break-even revenue = fixed costs ÷ gross margin Because only the gross margin portion of revenue reaches fixed costs, break-even revenue is always larger than fixed costs — by a factor of one divided by the margin. At a 62% margin every unit of overhead needs about 1.6 units of sales.

Why does Business Break-Even matter?

Owners routinely set revenue targets equal to their cost base, which understates the requirement by the whole gross margin gap.

What values do I need to enter?

This calculator takes 3 inputs: Fixed and overhead costs per month, Blended gross margin, Current monthly revenue. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.