Finance

Shop Break Even Units Calculator (15 Years)

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

The Break even units figure is the number of units that must be sold for revenue to cover all costs exactly, so selling fewer units means a loss and selling more units means a profit, and for the default figures 500.00 units is that turning point, which averages about 33.33 units a year over 15 years as a planning average only.

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. Using the page formula, break even units are $10,000 divided by $20, which is 500.00 units. That is the calculator's own result for these defaults, and it is the same on every page in this group because the term is not an input. At break even, revenue is 500 times $50, which is $25,000, variable costs are 500 times $30, which is $15,000, and $25,000 minus $15,000 minus $10,000 of fixed costs leaves zero profit, exactly as break even should. Spread evenly over 15 years, that is about 33.33 units a year, as a planning average only, not a sales target for any single year.

Who this term suits for a shop owner: a shop upgrading equipment, such as refrigeration, shelving or signage, where the cost is spread over many years and today's $50 selling price cannot be assumed to hold for the whole period.

FAQs

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

Is this shop 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 500 units over 15 years too easy to be useful?
As a single number, yes, it can mislead. Its value is as a check: if a shop cannot sell about 33 units a year, its fixed costs or prices need urgent attention.

How should a shop use a 15-year break even for a refit?
Compare the refit cost with the extra sales it should bring. If new refrigeration or shelving adds $10,000 of fixed costs, the shop must sell 500 more units at today's prices before the refit pays for itself.

What happens if fixed costs rise to $15,000 in a 15-year plan?
Break even rises to $15,000 divided by $20, which is 750 units. Rent reviews and wage rises are the usual reasons, so the figure should be rechecked whenever a lease renews.

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