Break-Even Point
Also called Break-Even
The point at which total revenue exactly covers total costs, so you are neither making nor losing money. Beyond it, additional sales turn into profit.
Break-even = fixed costs / (price per unit - variable cost per unit)
Why it matters
The break-even point tells you how much you need to sell to stop burning, a grounding number for pricing and planning. For bootstrappers especially, reaching it is the milestone that buys real independence.
For example
With 10 lakh of monthly fixed costs and a 5,000 rupee contribution per customer, the company breaks even at 200 customers a month.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.
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