How to Calculate Break Even Sales in Units

An important equation in any business is how to calculate break-even sales in units. Given your profit margin, it is important to know how many units of a certain product that you will need to sell in order to cover your fixed/startup costs. Use this calculator to determine the number of units required to breakeven plus the potential profit you could make on your anticipated sales volume.



How many units do I need to sell to break even?

The break-even points for sales calculator from Money Help Center can help you calculate the number fast and at no cost. You can also use this formula to get a rough estimate manually:

Fixed Costs/(Unit Price – Variable Costs) = Break-even Point (in Units)

Why Calculate Break Even Sales?

If you own your own business or are starting to sell items as a side hustle, determining your break-even sales has many advantages:

  • It can help you determine how many units you need to sell to break even when it comes to costs and startup expenses. It costs money to make money, and you have likely invested cash in startup costs, inventory, supplies and other items. Knowing how many units you need to sell can help you determine when you start making a profit.
  • It helps you track changes in the break-even point. If there is a sudden downturn in sales or the economy, what will you do? If you know your break-even point, you essentially understand when a dip in sales reaches the critical point where your business cannot cover costs. As you approach this point, you can start diversifying or taking other steps to save your finances.
  • It lets you see how changes in your business impact how much you need to sell. Your variable costs may change. You may decide to go with a different internet host, for example, resulting in different monthly costs. Other expenses may also vary. You may decide to expand your offerings or start marketing. Running a break-even analysis lets you see how many units you will need to sell to make up the difference, which can help you decide whether the change is worth it.
  • It can help you price your products accurately. If your break-even analysis shows you need to sell an unreasonable number of units, it may show you need to increase your prices. Additionally, if you run a break-even analysis and a market analysis, and you realize that the market price of your product does not support a reasonable break-even point, you may need to rethink your business model entirely.
  • It can help you see if a business is viable. Maybe you’re just considering a business, and you decide you want to sell a product. By determining your break-even point ahead of time, you can test which product may be best for your new venture by evaluating which one gets you to profits faster. If a break-even analysis and market analysis shows you need to sell 10,000 units to break even, and you expect to only sell that many after a year or more, can you keep your business afloat until you reach that point? Knowing these kinds of challenges ahead of time lets you plan for success.

With all these advantages, use our break-even calculator today. It’s a terrific tool for any business owner.