Chartered Financial Analyst specializing in retail and small business finance.
Determine how many items your boutique must sell per month to cover all costs. Enter any three variables—Monthly Fixed Costs, Avg. Sale Price, Avg. Variable Cost, or Breakeven Units Sold—to solve for the fourth.
Boutique Breakeven Calculator
Boutique Breakeven Formula
The breakeven formula for a boutique finds the number of items (Q) it must sell for total monthly revenue to equal all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Sale Price per Item (P):
P = (F / Q) + V
Solve for Avg. Variable Cost per Item (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., store rent, utilities, staff salaries, POS system fees, insurance).
- Avg. Sale Price per Item (P): The average retail price you sell an item for.
- Avg. Variable Cost per Item (V): The average wholesale cost of an item (COGS), plus any packaging and payment processing fees.
- Breakeven Items Sold (Q): The total number of items you need to sell to reach $0 in monthly profit.
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What is a Boutique’s Breakeven Point?
A **Boutique Breakeven Point** is the number of items (Q) your store must sell in a month to cover all your total expenses. This is the minimum sales volume you need to achieve to start being profitable.
**Fixed Costs (F)** are your monthly “overhead.” These are the expenses you pay regardless of whether you sell one item or a thousand. This includes your storefront rent, employee salaries, utilities, insurance, and software subscriptions (e.g., Shopify, POS system).
**Variable Costs (V)** are the costs tied *directly* to each item you sell. This is primarily your “Cost of Goods Sold” (COGS)—the wholesale price you paid for the item. It also includes payment processing fees (e.g., 2.9% of the sale) and any per-item packaging costs (like nice bags or boxes).
The **Contribution Margin** (P – V) is the profit from a single item that goes toward paying off your large monthly fixed costs. This calculator finds how many items you need to sell to cover your total overhead. Every item sold *after* this point generates your net profit.
How to Calculate Boutique Breakeven (Example)
Let’s calculate the breakeven point for a new clothing boutique.
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Identify Monthly Fixed Costs (F):
The boutique has $5,000 in monthly rent, utilities, and one part-time salary.
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Identify Avg. Sale Price (P):
The average item in the store sells for $60.00.
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Identify Avg. Variable Cost (V):
The average wholesale cost (COGS) for an item is $25.00.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per item: $60.00 (P) – $25.00 (V) = $35.00.
Next, divide the fixed costs by this margin:
Q = $5,000 / $35.00 = 142.86 -
Conclusion:
The boutique must sell 143 items (rounding up) each month to cover all costs and start making a profit.
Frequently Asked Questions (FAQ)
This is (P – V) / P. In our example, ($60 – $25) / $60 = 58.3%. Many boutiques aim for a 50-60% margin, which means their retail price is at least double their wholesale cost (a “keystone” markup).
At the end of the month, divide your total sales revenue by the total number of items sold. For example, $8,000 in revenue / 130 items sold = $61.54 (this would be your P).
Full-time or part-time salaried/hourly employees are a **Fixed Cost (F)** because you pay them regardless of sales. If you only pay commission *per item sold* (which is rare), that commission would be a **Variable Cost (V)**.
Enter your (F) (e.g., $5,000), (V) (e.g., $25), and a realistic sales goal (Q) (e.g., 200 items/mo). Solve for (P): `P = ($5,000 / 200) + $25 = $25 + $25 = $50`. This means you must charge an average of $50 just to break even.