What Is the Break-Even Point?
The break-even point is the sales level where total revenue equals total cost — neither profit nor loss. Below it you lose money, above it you profit. When evaluating a new product, campaign or business idea, it answers "how many units must I sell?" and is one of the most basic health indicators of a venture.
How Is It Calculated?
The formula is simple: Break-even units = Fixed Costs ÷ Unit Contribution Margin. The unit contribution margin is the sale price minus the unit variable cost, showing each sale's contribution toward covering fixed costs. For example, at ₺50,000 fixed costs, a ₺200 sale price and ₺80 unit cost, the margin is ₺120 and you must sell 417 units to break even.
What the Inputs Mean
- Fixed costs: rent, salaries, software subscriptions — costs that do not change with how many units you sell.
- Unit sale price: the price at which you sell one unit.
- Unit variable cost: the cost of each additional unit (materials, packaging, transaction fees).
If the sale price is at or below the unit cost, the contribution margin is zero/negative and no break-even exists; you would need to raise the price or cut the cost.
Informational Note
This is a simplified model assuming a single product and linear costs; it excludes tax, discounts, capacity and seasonality, and is informational only. For the pricing side, see our Profit Margin Calculator; to bring your idea to digital, explore our custom software development service.