Break-even Calculator

Pro tips most people learn the hard way

• Break-even units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit). Run this calculation BEFORE signing your shop lease, hiring staff, or stocking inventory. Pakistani small businesses fail disproportionately because nobody runs this number first — they assume the business will sort itself out. It usually doesn't.
• Add a 30 percent safety buffer above your calculated break-even. If math says 200 units to break even, target 260+ for actual viability. The buffer covers slow months, unexpected fixed-cost increases (rent renewal hikes, PKR depreciation on imports), and the realistic gap between projected and actual sales for a new business.
• If break-even requires more than 80 percent of your theoretical maximum capacity (restaurant tables, manufacturing units, freelance billable hours), the model is dangerously fragile. There's no room for bad weeks or unexpected events. Either restructure costs lower or rethink the pricing/positioning strategy.
• Recalculate break-even quarterly, and immediately whenever costs change. Pakistani business costs creep up steadily — PKR depreciation hits import costs, rent renewals add 10-15 percent annually, electricity tariffs rise, supplier prices increase. A break-even that worked in January often doesn't work in October at the same selling prices.
• Pro tip for restaurants and service businesses: include OWNER salary in fixed costs, not as profit-after-tax. A restaurant that "breaks even" but pays the owner nothing isn't actually viable long-term — the owner is subsidising the business with unpaid labour. Account for PKR 100,000-200,000 monthly owner salary as a fixed cost line before calling anything profitable.