Table of Contents
9
7 min
18.07.2026
How many sales do you need to break even this month?
Olena Smolikova
Financial expert at Finmap
The 15th. Half the month is already behind you. Quick question: have you hit break-even yet, or not?
Most business owners have no idea. They see money in the account, orders coming in, the team busy. Whether the month has covered its costs won't become clear until the end, when everything settles — by which point there's nothing left to do about it.
There's actually one number that answers this question for good. It takes ten minutes to calculate and tells you exactly how much you need to sell to break even. Everything above that is profit. Everything below it means you're essentially paying to show up to work.
Two kinds of costs that behave completely differently
To find that number, you first need to split your costs into two types. This is the key step — and where most people get confused:
| Cost type | What it means | Examples |
|---|---|---|
| Fixed | Exist regardless of sales | Rent, salaries, subscriptions |
| Variable | Only appear when you make a sale | Materials, commissions, sales rep percentages |
Fixed costs are your monthly debt to reality. They'll hit whether you have a single customer this month or not. Variable costs grow alongside your sales.
Mixing them up is expensive. If you treat a salesperson's base salary as a variable cost because they're "in sales," your break-even figure comes out too low — and you'll think you're in the black when you're actually in the red.
How to calculate it in 10 minutes
The formula is simple. You need three numbers:
- Your fixed costs for the month — add up rent, salaries, subscriptions, everything non-negotiable.
- Your contribution margin — what percentage of each sale remains after variable costs.
- Divide the first by the second — the result is the revenue at which you break even.
Example: Fixed costs are $12,000. For every $100 in sales, after materials and commissions you keep $40 — a 40% margin. Divide: $12,000 / 0.4 = $30,000. That's your number.
| Metric | Value |
|---|---|
| Fixed costs | $12,000 |
| Contribution margin | 40% |
| Break-even point | $30,000 |
Now you have a benchmark. Sell $30,000 — you break even. Sell $40,000 — you've made $4,000 (because you keep 40 cents of every additional dollar). Sell $25,000 — the month closes at a $2,000 loss, even if your account balance looked fine.
"For years I only found out a month had been unprofitable in the following month. Once I had a break-even number, I could see it on the 15th — while there was still time to do something about it."
Why your account balance lies to you
The core trap is that your bank balance and your monthly result are two different things:
- Old receivables came in — that's money for last month's work, not this month's performance.
- You collected a deposit — that's someone else's money for work you haven't done yet.
- You haven't paid a supplier yet — the expense already exists, it just hasn't left your account.
So an owner looks at the balance, sees a positive number, feels fine — while the month is quietly closing in the red. The break-even number doesn't look at your account; it looks at what you've actually earned and spent.
How to use this number every day
Knowing it isn't enough — you need to live by it. Here's how it works in practice:
| Situation | Action |
|---|---|
| It's the 15th and you're at 40% of target | Push on sales now — don't wait for month-end |
| Fixed costs have gone up | Recalculate — your threshold has risen too |
| You offer a 20% discount | Margin drops → you need to sell significantly more to compensate |
| Sales are consistently below break-even | The problem isn't the month — it's the business model |
That last row matters most. If you're falling short of break-even month after month, selling harder isn't the answer. Something in the model needs to change: your pricing, your cost structure, or your cost of goods.
"What I find most useful about this number is that it turns anxiety into a task. Instead of a vague feeling that money is tight, you have something concrete: I need to sell this much more."
How this works in Finmap
Finmap does the calculation for you. Connect your accounts and your income and expenses pull through automatically, sorted by category. Fixed costs are clearly separated from variable ones, so your margin and break-even threshold are based on real numbers — not memory.
From there, you simply see how much you've done since the start of the month and how far you are from zero. Not at the end of the month — every day, while you still have time to push sales or hold back on spending.
📌 Find out exactly how much you need to sell to stay out of the red. Try Finmap free for 14 days: connect your accounts and see your daily distance from break-even — not after the fact at month-end.
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Frequently Asked Questions
How do I calculate this if I offer different services with different margins?
Use a weighted average: multiply each service's margin by its share of total revenue. Or calculate the break-even point for each line of business separately — that's actually more precise and more useful.
Is a salesperson's base salary plus bonus a fixed or variable cost?
Split it: the base salary is fixed (you owe it even if sales are zero), and the bonus is variable. This is the most common mistake — and it's exactly why break-even figures end up understated.
What about seasonality? My December and July might as well be different planets.
Fixed costs don't disappear during a slow season — that's precisely why break-even feels easy in winter and impossible in summer. Calculate month by month, and set aside a cushion from your strong months to cover the weak ones.
Do I need this number if my business is already profitable?
Absolutely — it tells you exactly how much breathing room you have. Knowing your break-even is $300K and you're bringing in $400K means you know you can weather a 25% drop. Without that number, it's just a feeling.
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