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.

Related terms

Fixed Costs Variable Costs Contribution Margin

Go deeper

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

eChai Partner Brands