Break-Even Calculator
Find out exactly how many units you need to sell each month to cover all your costs and start making profit.
Cost & Pricing Inputs
₦
₦
₦
Break-Even Point
167 units
Break-Even Revenue
₦833,333
Contribution Margin / Unit
₦3,000
Contribution Margin %
60.0%
Fixed Costs
₦500,000
How to Use This Calculator
Enter your monthly fixed costs (rent, salaries, utilities — costs that don't change with sales volume), variable cost per unit (raw materials, packaging, direct labour per item), and your selling price per unit. The calculator instantly shows you how many units you must sell each month just to cover all your costs.
What is Break-Even?
The break-even point is where your total revenue exactly equals your total costs — you make neither a profit nor a loss. Every unit sold above break-even contributes directly to profit.
The Formula
Contribution Margin = Selling Price − Variable Cost per Unit
Break-Even Units = Fixed Costs ÷ Contribution Margin
Break-Even Revenue = Break-Even Units × Selling Price
Contribution Margin % = (Contribution Margin ÷ Selling Price) × 100
Example
Small Lagos Fashion Business
Monthly Fixed Costs (rent, salaries, utilities)₦500,000
Variable Cost per Outfit (fabric, buttons, thread)₦2,000
Selling Price per Outfit₦5,000
Contribution Margin per Unit₦3,000
Break-Even Units167 outfits/month
Break-Even Revenue₦835,000/month
To make a profit, the business must sell more than 167 outfits per month. At 200 outfits, monthly profit = (200 − 167) × ₦3,000 = ₦99,000.
FAQ
Fixed costs stay the same regardless of how much you produce or sell — shop rent, staff salaries, insurance, generator fuel (base level), internet subscriptions. Variable costs change directly with production volume — raw materials, packaging, sales commissions, delivery costs per order. Some costs are semi-variable (electricity, part-time labour) — split these between the two categories.
Three main strategies: (1) Increase your selling price — even a 10% price increase has a large impact on contribution margin. (2) Reduce variable costs — negotiate better material prices, reduce waste, improve process efficiency. (3) Cut fixed costs — share office space, outsource non-core functions, renegotiate leases. The most powerful approach is usually increasing price, as Nigerian consumers often associate higher prices with better quality.
Yes. For a service business, the "unit" might be a client session, a project, or a consulting day. Variable cost per unit includes any direct costs of delivering that service (freelancer fees, materials used). For example, a Lagos consulting firm with ₦800,000 fixed costs and ₦20,000 direct cost per client day, charging ₦80,000 per day, breaks even at 13.3 client days per month.