How many sales do I need to break even?
Divide your monthly fixed costs by what each sale leaves after its own variable costs (its contribution). A €90 repair with €54 of parts and fees leaves €36, so €1,800 of fixed costs needs 50 repairs. The answer is a requirement, not a forecast, and it moves when the mix of work changes.
A job can leave money after its own variable costs while the business still falls short for the month. This example shows how many sales are needed to cover a separate fixed cost, and why that number is not a promise of enough customers.
Contribution comes before fixed costs
Sales less variable costs is called contribution. It is available to cover fixed costs; it is not final profit. For one unchanged offering with positive contribution, divide the period's fixed costs by contribution per sale: €1,800 ÷ €36 = 50 repairs. A wage that stays fixed for the month does not become variable because you divide it among jobs.
Forty repairs do not cover the workshop
Mira charges €90 for a standard repair. Parts and per-repair fees cost €54, leaving €36 from each repair towards the workshop's fixed costs. Her fixed monthly list totals €1,800, including its fixed wages.
Forty repairs leave 40 × €36 = €1,440. That is €360 short of the €1,800 list. Fifty repairs leave exactly €1,800. Sixty leave €2,160, or €360 after the costs included here.
That is the point: money left from one repair must be added across the month's sales before you compare it with the month's fixed costs. Fifty is the number this example requires. It says nothing about whether Mira can sell or complete fifty repairs.
- This is a made-up operating comparison. Every repair is sold; price and variable cost stay the same across 40–60 repairs, with enough existing capacity.
- The €54 contains all variable costs in this example. The €1,800 fixed list is counted once, not deducted again from each repair.
- Amounts exclude VAT or sales tax. Tax, loan principal, equipment purchases and owner withdrawals are outside this comparison and may still need cash.
| Repairs sold | Left after variable costs | After €1,800 fixed costs |
|---|---|---|
| 40 | €1,440 | €360 short |
| 50 | €1,800 | €0 |
| 60 | €2,160 | €360 left |
Try it with your own numbers
What the customer pays for one sale, without VAT or sales tax.
Costs that come with each sale, such as parts and per-sale fees.
Costs that stay the same this month whatever you sell, including fixed wages. Count each one once.
A number of sales to compare with your fixed costs. It is not a forecast.
Your result
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The type of work changes the answer
Suppose Mira's sixty repairs instead include thirty leaving €36 and thirty leaving €18. They contribute €1,620 altogether: €180 short of her €1,800 list. The total repair count looked sufficient, but the mix changed. Check the contribution of the work actually being sold.
A requirement is not a forecast
The estimate depends on prices, costs, mix and the range where fixed costs stay fixed. Compare it with demand and practical capacity. If each additional sale contributes zero or less, adding more of those sales cannot cover a positive fixed cost within this model.
Common misconceptions
- Each repair leaves €36, so that is my profit.
- In Mira's example the workshop's monthly €1,800 still needs covering. Forty positive contributions are not enough.
- We need fifty repairs, so fifty must be achievable.
- The calculation gives a requirement. It does not supply customers, working hours or equipment.
- Sixty jobs are always enough.
- The mixed-work example leaves a shortfall because half the jobs contribute less.
Check one offering against one month's fixed costs
Use actual invoices, fees and wage records to check which costs change with sales and which remain fixed. Calculate the requirement, then compare it with work you can realistically sell and complete. Record missing costs before using the result to change a business decision.
Sources
- ACCA: Cost-volume-profit analysis (opens in a new tab)Contribution, fixed-cost coverage and the limits of assumptions about cost, price and sales mix. Example amounts are authored here.