Business
Break-even Revenue Calculator
Enter fixed costs and contribution margin percent to see break-even revenue.
Revenue needed to break even
If you know contribution margin as a percentage of sales, break-even revenue is fixed costs divided by that margin decimal. It answers “how much top line do we need before profit starts?” without requiring a full unit forecast. Useful for agencies, SaaS and shops that think in monthly revenue targets rather than SKU counts. Recalculate when discounts, contractor mix or payment fees move the contribution percentage. For unit-based views use break-even units; for price setting see break-even price; for interactive what-ifs try break-even scenario. Confirm margin language with gross margin so the team is not mixing markup and margin. Estimates only — not accounting advice. Agencies that bill retainers should strip delivery subcontractors from the contribution percentage before trusting the break-even line. Shops running heavy gift-with-purchase weeks should recalculate mid-promotion rather than clinging to the quiet-season margin. When fixed costs step up — a second warehouse or an extra full-time hire — rebuild the revenue target on the day the cost lands, not at the next quarterly review.
Worked example
Monthly fixed costs £10,000 and contribution margin 40%. Break-even revenue = 10,000 ÷ 0.40 = £25,000. At £30,000 sales with the same margin, contribution is £12,000 and profit before other adjustments is about £2,000. If a sale season drops contribution to 32%, break-even revenue jumps to £31,250 — easy to miss if you only watch the old £25k target.
Limits and assumptions
Treats contribution margin as constant across revenue levels. Volume discounts, overtime and stepped fixed costs (extra staff, new warehouse) can bend the line. Cash timing and VAT are outside the model.
Frequently asked questions
How is break-even revenue calculated?
Fixed costs ÷ contribution margin percentage (as a decimal). Example: £10,000 fixed ÷ 0.40 = £25,000 revenue.
What counts as contribution margin?
Sales minus variable costs, as a share of sales. Exclude fixed rent and salaries you treat as fixed.
Can contribution margin change with scale?
Yes — volume discounts and overtime can move it. Recalculate when the cost structure shifts.
Should VAT-inclusive sales be used?
Be consistent. Many planners use ex-VAT revenue and costs; match how you track the books.
How do retainers fit?
Retainer revenue still needs variable delivery cost stripped out before you trust the margin percentage.