Find your break-even
Find your break-even point
Works for a product (units) or a service (billable days, projects or seats). The boxes start empty; use your own figures.
Break-even units = fixed costs ÷ (price − variable cost). Margin of safety = (expected units − break-even units) ÷ expected units. Before tax and before any change in working capital.
Reading it in a turnaround
| Your result | Means | Look at |
|---|---|---|
| Break-even within reach, expected sales above it | A volume or timing problem; cash may be the issue | Cash flow turnaround |
| Break-even above what you have ever sold | Fixed costs too high for the model | Overheads rising |
| Contribution per unit near zero or negative | Price or variable cost problem | Margins shrinking |
More on break-even
Break-even is the point where contribution from sales covers fixed costs. Below it you lose money on every month of trading; above it each extra unit adds profit. Use the calculator above with your own figures, then test it with a bad month as well as an average one.
CFOAvatar complements every turnaround
A human CFO sees your business at the review. Problems do not wait for the meeting. CFOAvatar is connected to your accounting data and checks your numbers every day, so the scoreboard in a turnaround is always current. Ask it what an owner in trouble would ask:
What owners say after the numbers started talking
We now prepare monthly business plans that clearly show revenue, costs, and final profit. This has helped us plan better and avoid last-minute surprises.
Working with CFOSurge has truly transformed how we look at our business finances. They helped us set up monthly business plans right down to the bottom line, which has given us so much more clarity and control. Highly recommend them to any business looking to get a real grip on their numbers!
Quoted word for word from our clients. Read more client words →
Questions owners ask us
What is break-even?
The level of sales at which total contribution equals fixed costs, so profit is zero.
What is contribution margin?
Selling price minus variable cost, per unit or as a percentage of sales.
Why use break-even in a turnaround?
It shows whether the gap is about sales, contribution or fixed cost, and so what kind of change is needed.
What is margin of safety?
How far expected sales are above break-even, as a percentage of expected sales.