Break-even Revenue Calculator
Estimate the revenue needed to break even given fixed costs and gross margin.
Break-even revenue answers: how much revenue do you need to cover fixed costs given a contribution margin (gross margin is a common proxy)-
This calculator assumes a simple model: fixed costs are covered by gross profit, so break-even revenue = fixed costs / gross margin.
Prefer an explanation- Read the guide.
Need definitions- Browse the glossary.
Break-even revenue: calculate your break-even pointContribution margin: what it is and why it mattersDCF valuation: forecast cash flows, discount rate, and terminal valueWACC explained: how to estimate a discount rate for DCF
$
%
Used to compute a daily break-even run rate.
Used to compute gap vs break-even.
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Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
$37,500.00
- Fixed costs (monthly)
- $30,000
- Gross margin
- 80%
- Days in period (optional)
- 30
- Current revenue (optional)
- $0
How to calculate
- Enter fixed costs for the period (monthly by default).
- Enter gross margin as a percent of revenue.
- Compute break-even revenue and optional daily break-even run rate.
- Use scenarios to stress-test margin changes and fixed cost changes.
Formula
Break-even Revenue = Fixed Costs / Gross Margin
- Gross margin is expressed as a percent of revenue.
Benchmarks
- If gross margin is 80%, break-even revenue is 1.25x fixed costs (1 / 0.80).
- If break-even revenue is far above current revenue, reduce fixed costs or improve margin before scaling.
- Gross margin is a proxy; include variable costs (fees, shipping, returns) if they matter materially.
FAQ
What if my costs are not fixed-
This calculator assumes fixed costs. If costs scale with revenue, use a contribution margin model instead.
Common mistakes
- Using accounting gross margin when variable fulfillment costs are excluded (understates break-even revenue).
- Mixing time units (monthly fixed costs with annual margin assumptions).
- Treating this as a full P&L model (it is a simplified planning shortcut).
How to interpret
Break-even tips
- Use contribution/gross margin, not net margin.
- Validate fixed costs: include salaries, rent, core tools, and overhead.
- Recompute when pricing or COGS changes.
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Quick checks
- Use consistent time units (monthly vs annual) when entering rates and cash flows.
- Run a sensitivity check on the input that drives the result most (often discount rate or growth).
- Treat the output as a decision aid, not a prediction; validate assumptions with reality.