Business & Accounting
Break-Even Point
Definition
The point at which total revenue equals total costs, resulting in neither profit nor loss. Calculated as Fixed Costs divided by (Price Per Unit minus Variable Cost Per Unit) for product businesses, or Fixed Costs divided by Gross Margin Percentage for service businesses. Knowing your break-even point tells you exactly how much revenue you need to cover all expenses. For freelancers, the break-even calculation helps determine minimum monthly billing rates. For product sellers, it determines how many units must be sold to cover costs.
Related Templates
These SheetCraft templates use or relate to Break-Even Point:
- Small Business Bookkeeping System, Simple bookkeeping for small business owners who don't have an accountant, income, expenses, P&L, sales tax, and bank reconciliation.
- Reseller Business Toolkit, Track inventory, listings, sales, and profit per item across eBay, Poshmark, Mercari, and more.