Reviewed & updated by WordNExcel Team — Updated October 31, 2026
A break-even analysis template shows how many units you need to sell, or how much revenue you need, before your business stops making a loss and starts making a profit. On this page you can use the free break-even calculator above for a quick answer, then download three free break-even analysis templates in Excel: a standard break-even analysis, a multi-product break-even sheet and a service business break-even calculator.
Each file is a real, editable .xlsx spreadsheet created for this page. You enter your prices and costs in the yellow cells, and the formulas work out the contribution margin, break-even units, break-even sales, units needed for a target profit and your margin of safety. The templates open in Excel, Google Sheets and LibreOffice Calc and print on one page.
Break-Even Calculator
Runs in your browser; nothing is sent or saved. Assumes a constant price and variable cost per unit.
Free download: 3 templates (.xlsx). Works in Excel and Google Sheets. No sign-up needed.
What Is a Break-Even Analysis?
A break-even analysis finds the point where total revenue equals total costs. At that point the business makes neither a profit nor a loss. Every unit sold above the break-even point adds profit, and every unit below it adds to the loss.
The analysis splits costs into two types. Fixed costs stay the same whatever you sell, such as rent, salaries, insurance and software. Variable costs rise with each unit you sell, such as materials, packaging, shipping and sales commission. The difference between the selling price and the variable cost per unit is the contribution margin: the amount each sale contributes towards covering fixed costs and then towards profit.
The Break-Even Formula
The basic formula is simple:
- Break-even units = Fixed costs ÷ (Price per unit − Variable cost per unit)
- Break-even sales = Break-even units × Price per unit
- Units for a target profit = (Fixed costs + Target profit) ÷ Contribution margin per unit
For example, if you sell a product for 40, it costs 22 to make and deliver, and your fixed costs are 9,000 a month, each sale contributes 18. You need to sell 9,000 ÷ 18 = 500 units a month to break even, which is 20,000 in sales. To make a profit of 3,000 a month, you need 667 units.
How to Use the Break-Even Calculator
Enter your selling price per unit, variable cost per unit, monthly fixed costs, a target profit and the number of units you expect to sell. The calculator shows your break-even units and sales, the contribution margin per unit and as a percentage of price, the units needed for your target profit and the profit or loss at your expected sales. It also tells you how far above or below break-even your expected sales are.
If the variable cost is equal to or higher than the price, the calculator explains that you cannot break even, because each sale adds to the loss. The calculator runs only in your browser and nothing is saved.
Download the Free Break-Even Analysis Templates
The three Excel files below cover a single product, several products and service businesses that sell time.
Break-Even Analysis Template
The standard template has an inputs table, a results table and a profit and loss table showing revenue, total costs and profit from 0 to 1,000 units in steps of 100. Losses are shown in red, so you can see at a glance where the business moves into profit.
Multi-Product Break-Even
Most businesses sell more than one product. The multi-product sheet lets you enter up to six products with their price, variable cost and share of total sales. It calculates a weighted average contribution margin, the total break-even units and the break-even units and sales for each product based on your sales mix.
Service Business Break-Even Calculator
Consultants, agencies, salons, repair businesses and other service providers sell hours rather than units. This sheet lists your monthly fixed costs, your hourly rate, the variable cost per hour and the billable hours available. It shows the billable hours and revenue needed to break even and the utilisation you need, which is the share of available hours that must be billed.
How to Do a Break-Even Analysis Step by Step
- List all your fixed costs for a month: rent, salaries, insurance, loan repayments, software, utilities and any other costs that do not change with sales.
- Work out the variable cost of one unit: materials, packaging, payment fees, delivery and commission.
- Enter your selling price per unit, after any regular discounts.
- Calculate the contribution margin per unit: price minus variable cost.
- Divide fixed costs by the contribution margin to find break-even units.
- Multiply break-even units by the price to find break-even sales.
- Compare break-even with your expected sales to find your margin of safety.
- Try different prices, costs and sales levels to see how they change the result.
Understanding the Results
Contribution margin ratio shows what share of each sale is left after variable costs. A ratio of 45% means that 45 out of every 100 in sales goes towards fixed costs and profit.
Margin of safety is the difference between expected sales and break-even sales. A large margin of safety means sales could fall a long way before you make a loss. A small margin means the business is vulnerable to a slow month.
Units for target profit shows how much you need to sell to reach a profit goal. If that number is far above what you can realistically sell, you may need to raise prices, reduce costs or rethink the plan.
Ways to Lower Your Break-Even Point
- Raise prices. Even a small price increase raises the contribution margin of every unit.
- Reduce variable costs by negotiating with suppliers, buying in larger quantities or reducing waste.
- Cut fixed costs such as unused subscriptions, extra space or expensive equipment leases.
- Change the sales mix towards products with higher margins.
- Increase billable hours in a service business by reducing time spent on unpaid work.
When to Use Break-Even Analysis
Break-even analysis is useful whenever you make a decision about prices, costs or sales targets. Common uses include:
- Planning a new business or product before you launch.
- Setting or changing prices.
- Deciding whether to hire staff or move to larger premises.
- Preparing a business plan or a loan application.
- Checking whether a marketing campaign needs to bring in enough extra sales to pay for itself.
Limitations of Break-Even Analysis
Break-even analysis is a simple model. It assumes the selling price and variable cost per unit stay the same at every level of sales, that fixed costs do not change and that everything you produce is sold. In real life, you might offer discounts for large orders, fixed costs may rise when you grow, and demand depends on price. Use the result as a guide, test different scenarios and combine it with a cash flow forecast, because a business can be above break-even on paper and still run short of cash.
Break-Even in Business Plans and Loan Applications
Lenders and investors often ask for a break-even analysis to see how realistic a plan is. Show your fixed and variable costs clearly, explain how you set your price and compare break-even sales with your sales forecast. A plan where expected sales are comfortably above break-even is much stronger than one where the business only breaks even in the best case.
Testing Different Scenarios
Make a copy of the sheet for each scenario you want to test, such as a lower price, a cheaper supplier or a new member of staff. Change one input at a time so you can see its effect clearly. Comparing scenarios side by side shows which change lowers your break-even point the most, and helps you decide where to focus your effort.
Related Templates
You can also check these important templates like the profit and loss statement templates for tracking actual profit, and the cash flow projection templates for checking that you will have enough cash while you build up to break-even.
You may also like the price list templates for presenting the prices you set.
Frequently Asked Questions
What is the break-even point?
It is the level of sales where total revenue equals total costs, so the business makes neither a profit nor a loss.
How do I calculate break-even units?
Divide your fixed costs by the contribution margin per unit, which is the selling price minus the variable cost per unit.
What is the difference between fixed and variable costs?
Fixed costs, such as rent and salaries, stay the same whatever you sell. Variable costs, such as materials and delivery, rise with each unit sold.
Can I do a break-even analysis for several products?
Yes. Use the multi-product template, which uses your sales mix to calculate a weighted contribution margin and break-even units for each product.
How do service businesses calculate break-even?
Use billable hours instead of units. The service template divides fixed costs by the margin per billable hour.
Can I use the templates in Google Sheets?
Yes. Upload the .xlsx files to Google Drive and open them with Google Sheets. All formulas keep working.
