WithFunded › Academy › Manage your cash flow
How to find your break-even point
Your break-even point is the number of sales that covers all your costs. Below it you lose money, above it you earn it. Every owner should know this number by heart.
WithFunded Academy · Lesson 15 of 16 · 3 min read · Updated November 2026
Key takeaways
- Fixed costs stay the same whatever you sell. Variable costs rise with each sale.
- Each sale contributes its price minus its variable cost toward covering fixed costs.
- Break-even sales = fixed costs ÷ contribution per sale.
- A new fixed cost, such as a loan payment, raises the break-even point by a number you can calculate in advance.
Two kinds of cost
Fixed costs are what you pay each month even if you sell nothing: rent, salaries, insurance, software, loan payments. Variable costs are what each sale costs you to deliver: materials, hourly labor on the job, card fees, shipping.
The formula
Break-even sales = fixed costs ÷ (price − variable cost per sale)
The part in brackets is the contribution: what each sale puts toward your fixed costs, and toward profit once they are covered.
A worked example
A shop has $19,200 of fixed costs a month. Its average sale is $80 and costs $32 to deliver, so each sale contributes $48.
$19,200 ÷ $48 = 400 sales a month, or $32,000 in revenue. Sale number 401 is the first that earns a profit, and every sale after it adds $48.
Calculator
Break-even calculator
See how many sales cover your costs each month, and how a new loan payment moves the line.
- Break-even monthly revenue
- $32,000
- Each sale contributes
- $48.00
- Extra sales per month to cover the loan payment
- 0
Estimates for learning only. Not an offer, a quote, or financial advice.
What a loan payment does to it
A loan payment is a fixed cost. Add a $1,200 monthly payment and the same shop needs 25 more sales a month to break even, 425 in total.
That gives you a clear test for any financing: will what you are buying bring in comfortably more than 25 extra sales a month? If yes, it more than pays for itself. See when it makes sense to borrow to grow.
Three ways to lower your break-even point
- Raise the price. Every dollar goes straight to contribution. See pricing for profit.
- Cut the variable cost per sale: better supplier terms, less waste, faster jobs.
- Trim fixed costs you would not miss.
If you sell many different things, use your average sale and average variable cost, or run the numbers separately for each line of business.
Common questions
- How do I calculate my break-even point?
- Divide your monthly fixed costs by the contribution per sale, which is your price minus the variable cost of delivering one sale. The result is the number of sales needed to cover your costs.
- What is the difference between fixed and variable costs?
- Fixed costs, such as rent, salaries, and insurance, are owed whatever you sell. Variable costs, such as materials and card fees, rise with each sale.
- Does a loan payment change my break-even point?
- Yes. A loan payment is a fixed cost, so it raises the number of sales you need. Divide the payment by your contribution per sale to see how many extra sales it takes.
Need funding to put this to work?
Inventory, equipment, or a cushion for slow weeks: answer a few questions and get matched to your best-fit option. Zero upfront fees. Checking won't impact your credit.
Get matched → or open the payment calculatorMore in this track
Related funding guides
What our clients say
Real reviews from business owners funded through Big Think Capital.
Excellent
Based on 3,304 reviews on Trustpilot
Landon and Austin were greatLandon and Austin were great. Knowledgable and explained everything in a way that made it all really easy to understand. I avoid these call like the plague but these two were a joy to work with.
Highly recommendedHighly recommended! I worked with Corey, and he was awesome. He found an option after I received multiple rejections that no other company had presented to me. It was within my budget and my timeline. I'm so thankful!
BTC has become my go to for working…BTC has become my go to for working capital. Recently, my company was in a bind and needed funds. The BTC team, headed by Drew, took a problem solving approach and helped to overcome an initial denial, resulting in a better facility than the one I was turned down for. Thanks BTC! Thanks Drew!
Showing 5-star reviews of Big Think Capital, our funding partner. TrustScore 4.9 out of 5 on Trustpilot as of November 10, 2026. Read all reviews
Rate inputs are as of November 2026: a representative 8%–30% APR band for non-bank term financing and a 7.00% prime rate. Worked examples are WithFunded calculations.
Educational content. WithFunded Academy lessons are general information for small-business owners. They are not financial, legal, or tax advice, and they are not an offer or a commitment to lend. Figures are representative examples and WithFunded calculations, not quotes. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.