Finance

Business Break Even Units Calculator (15 Years)

Find how many units must be sold to break even. This business version uses a 15-year planning term as its starting point.

This Break even units result is the number of units that must be sold for revenue to exactly cover total costs, so selling fewer units means a loss and selling more units means a profit.

Formula

Break even units equal fixed costs divided by price minus variable cost per unit.

How it works

At break even, total revenue exactly covers total costs, with no profit and no loss.

Worked example

Fixed costs $10,000, price per unit $50, variable cost per unit $30, term 15 years. First, the contribution per unit is $50 minus $30, which is $20. Break even units are $10,000 divided by $20, which is 500 units. At 500 units, revenue is 500 times $50, which is $25,000, variable costs are 500 times $30, which is $15,000, and total costs are $15,000 plus $10,000, which is $25,000, so revenue exactly covers costs. As a planning pace only, not as an output of this calculator, reaching 500 units over 15 years means 33.33 a year, which is 2.78 a month. Selling 100 units more, 600 units in total, gives revenue of $30,000 against total costs of $28,000, so the profit is $2,000, because each extra unit adds $20.

Who this term suits for a business: A 15-year term suits a business whose product or equipment lasts a long time, for example a maker of commercial kitchen equipment, a supplier of fitted office furniture, or a business tied to a 15-year lease. At 33.33 units a year the sales pace is slow, so the plan only works if buyers stay in the market for the full term and the product is not replaced by a cheaper alternative halfway through.

FAQs

What is break even?
Break even is the point where revenue covers all costs, so profit is zero.

Is this business calculator exact?
No, it is an estimate for planning only, based on the numbers you enter.

Are these figures financial advice?
No, they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Is 15 years too long to rely on one product and one price?
Often yes, unless the product is a durable good with a long replacement cycle. Over 15 years, materials, competitors and customer tastes change, so the $50 price and $30 variable cost are unlikely to hold. A 15-year figure should be used as a lifetime total to aim for, with price and cost reviews every two or three years, not as a promise.

How does a 15-year term change the sales pace?
It lowers the yearly pace to 33.33 units, which can make a weak product look safe. A business selling only 33 units a year still needs the same 500 units in total, so a slow start cannot be ignored. If sales are below 33 units a year in the first three years, the remaining years must sell faster, or the fixed costs will not be covered.

Can a 15-year break-even figure be used for a seasonal business?
Only with care, because seasonal sales arrive in bursts, not evenly at 2.78 units a month. A seasonal business should check break even against its selling season, not the calendar year. If it sells 100 units in a good season and none in winter, cash flow still has to cover fixed costs through the quiet months.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.