Business
Break-even Scenario Calculator
See how many units you need to sell at a given price after fixed and variable costs.
How many units to break even?
Fixed costs stay still as volume changes (rent, tools, salaries you treat as fixed). Variable costs move with each unit — materials, shipping, percentage fees. This scenario calculator lets you change price, costs and volume together to see when you cross break-even and how profit swings. If price is at or below variable cost, you cannot break even by selling more; the chart only gets worse. Change one input at a time to learn which lever matters before you cut price or sign a bigger lease. Simpler cousins: break-even units and break-even price. After you pick a price, stress-test promotions with discount profitability. Illustrative planning only — not a forecast you should bank on without bookkeeping. Treat the scenario sheet as a teaching tool for co-founders who disagree about price cuts: change one lever, read profit, then reset. Capacity constraints matter once you approach break-even from above — overtime rates can turn variable cost into a moving target. Keep a cautious case that assumes slower sales and slightly higher fees so optimistic decks do not become the only plan the team remembers.
Worked example
Price £40, variable cost £22, fixed costs £9,000. Contribution £18 per unit; break-even at 500 units. At 600 units profit is about £1,800; at 400 units you are £1,800 short. Dropping price to £36 without cutting costs lowers contribution to £14 and raises break-even to roughly 643 units — a painful jump if demand only rises a little.
Limits and assumptions
Linear cost behaviour is assumed. Stepped rents, bulk discounts and capacity limits are not automatic. Marketing that scales with sales may belong in variable cost — classify consciously. Not a cash-flow forecast.
Frequently asked questions
What is the difference between fixed and variable costs?
Fixed costs do not change with each extra unit in your model; variable costs do (materials, shipping, percentage fees).
Why does profit stay negative when I sell more?
If variable cost per unit is above price, more volume deepens the loss. Fix unit economics first.
Should marketing be fixed or variable?
Brand retainers often sit as fixed; performance media can be modelled as variable or tested separately with ROAS tools.
How many scenarios should I run?
Three is enough for a first pass — base, cautious and stretch — then refine the sensitive inputs.
Can I model two products?
Use a blended contribution per unit or run separate scenarios per SKU if mixes differ widely.