Glossary

Break-even point

The break-even point is the sales level where revenue exactly covers all costs — the line you must cross before earning any profit.

2 min read

Zero profitZero loss

Coversfixed costs

Definition

The break-even point is the level of sales at which total revenue exactly covers total costs — the point where a business makes neither profit nor loss. Sales above it generate profit; below it, a loss.

In plain terms

It is the finish line you must cross before making any profit — the sales needed just to cover all your fixed and variable costs. Every sale beyond it drops profit to the bottom line.

Why it matters for your company

Knowing your break-even point tells you the minimum you must sell to survive, which is vital for pricing, planning and deciding whether growth is worth funding. It is a core number behind any budget.