Break-even analysis
Monthly survival point
Contribution / unit
₹80
Fixed costs
₹50,000
Margin % on price
40%
Break-even point
625 units / month
= ₹1,25,000 monthly revenue · ₹50,000 covers fixed costs, rest is variable spend
Money tools
Break-even calculator — know your survival number
Before you sign rent agreements or quote prices, know exactly how many units per month keep the lights on — and how many deliver real profit.
Unit economics
Find Your Survival Point
Every unit sold contributes ₹80 toward fixed costs (₹120 of the ₹200 price goes to making it).
FAQ
Break-even questions
How is the break-even point calculated?
Break-even units = fixed monthly costs ÷ contribution per unit, where contribution = selling price − variable cost per unit. For example, ₹50,000 fixed costs with ₹80 contribution needs 625 unit sales before any profit exists.
What counts as fixed vs variable cost?
Fixed costs stay the same regardless of sales — rent, salaries, EMIs, insurance. Variable costs scale directly with each unit sold — materials, packaging, delivery commission. If unsure, ask: 'Would this cost exist even if I sold zero units this month?'
What is margin of safety?
It shows how far current sales can fall before you hit break-even. Selling 1,000 units against a 625-unit break-even gives a 37.5% margin of safety — comfortable. At 650 units it's just 3.8% — one slow month hurts.
Can I use this for services instead of products?
Yes — define a 'unit' as one client engagement, order, or billable hour. Fixed costs are your monthly overheads; variable costs are anything you spend per delivery (travel, materials, subcontractor fees).