Break-Even Calculator

The break-even point is the number of units you need to sell — or the revenue you need to generate — before your business covers all its costs and stops making a loss. At break-even, total revenue equals total costs (fixed + variable). Every unit sold beyond break-even contributes directly to profit.

Contribution margin is what's left from each sale after subtracting the variable cost to produce it. If you sell a product for S$50 and it costs S$30 to make, your contribution margin per unit is S$20 (40%). This S$20 goes toward covering your fixed costs first, then generating profit. A higher contribution margin means you reach break-even faster.

Fixed costs don't change with the number of units you produce or sell — rent, salaries, software subscriptions, insurance, loan repayments. They're the baseline you must cover every month regardless of revenue. Variable costs, by contrast, scale directly with production: raw materials, packaging, payment processing fees, sales commissions.

Three levers: (1) Raise prices — even a 10% price increase dramatically improves contribution margin and lowers break-even units. (2) Cut variable costs — renegotiate supplier contracts, reduce waste, improve efficiency. (3) Reduce fixed costs — downsize office space, consolidate subscriptions, defer non-essential hires. The most powerful is usually pricing, which most founders underutilise.

It depends heavily on industry. Software/SaaS businesses typically achieve 70–90% gross margins (most costs are fixed). Physical product businesses range from 30–60%. Services businesses vary from 40–80%. As a rule of thumb: below 20% is dangerously thin; 40–60% is healthy for most product businesses; above 60% gives you significant leverage to scale.

Before setting a price, model your break-even at different price points. A price increase of S$5 on a S$50 product improves your contribution margin from 40% to 46% — and can reduce your break-even units by hundreds per month. Break-even analysis forces you to confront the volume assumptions behind your pricing strategy.