What is Break-Even Point?
The point where total revenue equals total costs — no profit, no loss.
Your break-even point is the moment a business (or a product) has made exactly enough to cover its costs. Below it you're losing money; above it you're finally making it.
Knowing your break-even tells you how much you need to sell just to stop bleeding — which is the first real goal of any new venture.
The formula for a product: fixed costs ÷ (price − variable cost per unit). Hit that number of sales and you've stopped digging.
Related terms
Definitions from the Business Dog Glossary — educational, occasionally satirical, never financial advice.