METHOD & GUIDANCE
How this calculation works
Keep every input on the same time basis—for example, one month or one financial year—and do not mix cash figures with accrual figures. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Use contribution margin rather than gross revenue margin, then compare both the zero-profit revenue and the revenue required to earn the target profit. Test a lower-margin case before setting a sales target.
Worked example
With £30,000 of fixed costs and a 40% contribution margin, the business needs £75,000 of revenue to break even. A £10,000 target profit raises the required revenue to £100,000.
Common mistakes
- Using gross margin when variable selling costs have not been deducted.
- Entering a percentage and fixed costs from different time periods.
- Treating break-even as a sufficient profit or cash target.
Frequently asked questions
Is the break-even revenue calculator free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Which period should I use?
Keep every input on the same basis—for example, one month or one financial year. Use current figures first, then save a cautious scenario for comparison.
Continue the decision
- Break-even Calculator — Find the sales volume needed to cover every cost.
- Contribution Margin Calculator — See how much each sale contributes to fixed costs.
- Price Increase Calculator — See how much sales volume a price rise can lose before profit falls.
Popular small-business decision paths
- Set a price from cost and target margin
- Check profit and margin per sale
- Find the sales volume needed to break even
Get the free employee hiring-cost worksheet →
Optional email capture; this calculator remains free.
Method reviewed 5 August 2026. Figures are illustrative and calculated locally in your browser. Official sources are linked where a rule or obligation affects how the result should be used. Read the Tool IQ calculation standard for our checking process, limitations and corrections policy.