Break-even point

The break-even point is the revenue at which a company makes neither a profit nor a loss.

Calculation:

Break-even = fixed costs ÷ (price per unit − variable costs per unit)

Example: you sell handmade candles:

• Fixed costs: €500/month (workshop rent, website, insurance)
• Selling price: €25 per candle
• Variable costs: €8 per candle (wax, wick, packaging, shipping)
• Contribution margin: €25 − €8 = €17 per candle
• Break-even: €500 ÷ €17 = 30 candles per month

From the 31st candle you make a profit. Anything below: a loss.

Why so important?

✅ Shows whether your business model can work at all
✅ Helps with pricing ("How much do I need to sell?")
✅ Investors ask about it ("When will you be profitable?")