How much do you actually need to sell before the business is paying for itself — and paying you? Enter your costs and your margin, and see the number you need to hit each month, and each day you trade.
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Break-even sales = Fixed costs ÷ Gross margin
Break-even units = Fixed costs ÷ (Price per unit − Cost per unit)
Fixed costs are everything you pay whether you sell or not — rent, wages, power, loan repayments, and what you need to take out for yourself.
Divide the monthly figure by the days you trade to get the number that matters day to day. These are the exact formulas used by the calculator above.
Break-even is the point where the business stops costing you money. Below it, you're funding the business. Above it, the business is funding you.
It's not the same as profit. Break-even is survival — the line you cross before anything you sell starts to be worth keeping. Profit is what happens beyond it.
Most break-even sums leave the owner out, producing a number that keeps the lights on but doesn't feed anyone.
If you work in the business, what you need to take out is as real a cost as rent — include it, and break-even rises, often by a fifth or more. That higher number is the honest one.
A monthly target is hard to act on. You can't tell on the 12th whether you're on track. A daily figure turns the same maths into something you can check at the end of trading: if you close today below your number, the business didn't pay for today.
That works in reverse too, and it's the part worth sitting with. Close ₦5,000 short on an ordinary day and nothing feels wrong. Do it on every trading day and you end the month ₦130,000 behind — again, and without any single day feeling like the problem.
Count only the days you actually trade. A stall that opens four days a week has a much higher daily target than the same costs spread across thirty days — and the four-day figure is the true one.
However complicated the business, break-even moves in three operational ways. Knowing which one you can actually pull is most of the work.
The obvious one, and usually the slowest. It needs more customers, more hours, or more stock — all of which take time or money you may not have. Worth doing, but rarely the fastest fix when you're already short.
Often the cheapest lever, and the most underused. A few points of margin — from better buying, less waste, or a price that finally matches your costs — lowers break-even immediately and costs nothing to try. Moving from 30% to 35% cuts your break-even sales by about a seventh.
The most direct of the three. Every unit of fixed cost you remove lowers break-even by several units of sales, because you only keep a fraction of each sale. On a 30% margin, cutting 30,000 of monthly cost is worth 100,000 of extra sales — which is why it's usually the first place to look.
That last point is the one most owners miss. When you're behind, the instinct is to chase sales. The arithmetic usually favours the cost side.
And when you're comfortably above, the question changes shape. It isn't whether you had a good month — it's whether you clear the line on most trading days, most weeks. A strong month can hide a run of days that didn't pay for themselves.
Beyond these three sit financing options — an overdraft, invoice discounting, equipment finance. They can carry you while you close the gap, but none of them lowers break-even. They buy time, and they cost money to use.
Now you know what you have to sell. The next question is whether the business can survive long enough to get there — whether your cash holds while you wait to be paid, how exposed you are if one customer leaves, and which of those to deal with first.
Not sure what to fix first? It looks at your profit, your cash, how exposed you are to one big customer, and how much the business depends on you — then tells you where to start. Free, about 10 minutes, no accounting knowledge needed.
Take your free Business Health CheckReady to start hitting it? Monyvo keeps this number in front of you — what you've sold, what's left after costs, and what needs doing today — so you know before month end whether you're clearing the line. Free plan available.
Get the Monyvo appYou can be above break-even and still run out of money. Find out why — and where your cash is actually trapped while you wait to be paid.
Open the cash flow calculator →Break-even depends on your margin. If you're not sure what you really keep from each sale, work that out first — it's the number this calculator runs on.
Open the profit margin calculator →