If you run a business—whether you sell services, products, advice, or time—there’s one number more important than your revenue, your turnover, or your social media reach.

It’s your breakeven number.

Yet surprisingly, many business owners either don’t know it or ignore it—until it’s too late.

In this post, we’ll break down:

  • What breakeven actually means (in plain language)

  • Why not knowing it puts your business at risk

  • And how to calculate it quickly, so you can make smarter decisions starting today

What Is Breakeven—Really?

Your breakeven point is the moment when your business income exactly covers your business expenses.

Before that point? You’re losing money.
After that point? You’re making profit.

Here’s the formula, simplified:

Breakeven = Fixed Costs ÷ (Price per Sale – Variable Cost per Sale)

Let’s say:

  • Your monthly fixed costs (like rent, salaries, subscriptions) are £3,500

  • You charge £500 per sale

  • Each sale costs you £250 in materials, delivery, or labourYour breakeven point is 14 sales per month.

The 15th sale and beyond? That’s profit.

A Quick Reality Check:

You’re only making a profit if each sale is priced correctly.

If your costs to deliver a job (labour, materials, subcontractors, overheads) are too close to—or higher than—what you’re charging, then hitting your breakeven target still won’t save you.

In other words, more sales won’t fix poor margins.

That’s why it’s not just about the breakeven formula—it’s about making sure your per-job or per-sale margins are healthy too.

What Happens If You Don’t Know This Number?

Let’s be honest: many business owners are working hard but not moving forward financially.

Here’s what happens when breakeven is a mystery:

  1. You mistake being busy for being profitable
    If your pricing doesn’t reflect your costs, you can run fast and go nowhere.

  2. You undercharge without realising it
    Without knowing your true margins, it’s easy to price based on fear or guesswork—not facts.

  3. You can’t set accurate targets
    How many clients or sales do you need to cover costs? If you don’t know, you’re guessing—at best.

  4. You feel financial stress too late
    By the time cash flow feels tight, the damage is already done.

What Changes When You Do Know It?

Everything.

When you understand your breakeven point and ensure each sale is profitable:

  • You price with purpose

  • You plan with confidence

  • You market and sell with intention

  • You make decisions like a business owner, not just a technician

And when you start operating beyond your breakeven consistently?
You start seeing real profit—money you can invest, save, or pay yourself without guilt or risk.

Want to Calculate Yours?

It doesn’t need to be complicated.
List your fixed costs. Estimate your average sale price and the cost to deliver that sale. Use the formula above.

Or better yet—reach out. This is something I help business owners with every day. One simple conversation could give you the clarity you’ve been missing.

Final Thought

Being busy is not the same as being profitable.
Revenue is not the same as sustainability.
But knowing your breakeven and your margins?
That’s where smart business starts.

Ready to get clear on your numbers and take back control? Let’s talk.
You don’t need an MBA—just the right tools and support.