My break-even number looks impossible. Now what?

The lever order: raise price (moves contribution fastest), cut variable cost, then fixed costs. A 20% price increase often halves the required volume; no realistic cost-cutting does that.

What is contribution and why does it matter more than profit per unit?

Contribution is what each sale throws at fixed costs before profit exists. Two products with equal 'profit' but different contributions dig out of the fixed-cost hole at very different speeds.

How does this apply to productized services?

Perfectly: a fixed-scope package is a unit. Price minus delivery cost (your hours at your rate plus tools) is the contribution, and the calculator tells you how many packages a month keep the lights on.

Small business

Break-even point calculator

Every product or productized service has a number of sales below which the month loses money. This computes it from three inputs, and the contribution figure explains why cheap prices need impossible volume.

Your numbers

Currency

Fixed costs per month

Rent, software, insurance, salaries: costs that arrive whether you sell or not.

Price per unit or sale

What one sale brings in.

Variable cost per unit

What one sale costs to deliver: materials, fees, per-unit labor.

Results

Break-even sales per month30sales

Contribution per sale: $100
Revenue at break-even: $4,500

Estimate

workingfigures.com/calculators/break-even-point-calculator

The formula

Contribution = price − variable cost. Break-even units = fixed costs ÷ contribution. Every sale after break-even drops its full contribution into profit.

What this ignores

Taxes, price-volume interaction (lower price can mean more sales), and capacity limits. For pure services, the break-even rate calculator is the sibling built on hours instead of units.

FAQ

My break-even number looks impossible. Now what?: The lever order: raise price (moves contribution fastest), cut variable cost, then fixed costs. A 20% price increase often halves the required volume; no realistic cost-cutting does that.
What is contribution and why does it matter more than profit per unit?: Contribution is what each sale throws at fixed costs before profit exists. Two products with equal 'profit' but different contributions dig out of the fixed-cost hole at very different speeds.
How does this apply to productized services?: Perfectly: a fixed-scope package is a unit. Price minus delivery cost (your hours at your rate plus tools) is the contribution, and the calculator tells you how many packages a month keep the lights on.