The number that tells you if the month works
Every sale contributes something towards your fixed costs. That contribution is the price minus what the sale itself cost you. Break-even is simply the point where those contributions have covered the fixed costs completely — every unit after that is profit.
A worked example
Your fixed costs are 120,000 a month. Each unit sells for 1,800 and costs 1,200 to make, so each one contributes 600. You need 200 units a month to cover the fixed costs, which is 360,000 of revenue. Sell 250 and the extra 50 units are worth 30,000 in profit.
Common questions
What counts as a fixed cost?
Anything you pay whether you sell one unit or a thousand: rent, salaries, software, insurance, accounting. Costs that rise with each sale — materials, packaging, payment fees — are variable costs instead.
I sell services, not products. Does this still work?
Yes. Swap units for billable days, hours or retained clients. Your variable cost is whatever each one costs you to deliver, including any subcontractors.
My break-even looks impossibly high. What now?
It is almost always a thin contribution per unit rather than the fixed costs. Raising the price a little moves break-even more than cutting overheads by the same amount.