Chartered Financial Analyst specializing in venture capital and startup financial modeling.
Find out how many customers (or sales) your startup needs per month to cover its burn rate. Enter any three variables—Monthly Fixed Costs, Avg. Revenue per Customer, Avg. Variable Cost per Customer, or Number of Customers—to solve for the fourth.
Startup Breakeven Calculator
Startup Breakeven Formula
The breakeven formula for a startup finds the number of customers (Q) needed per month for total revenue to equal the total monthly fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Revenue per Customer (P):
P = (F / Q) + V
Solve for Avg. Variable Cost (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total monthly burn rate, regardless of customers (e.g., salaries, rent, software subscriptions).
- Avg. Revenue per Customer (P): The average revenue you earn from one customer in one month (e.g., subscription fee).
- Avg. Variable Cost per Customer (V): The average cost to serve one customer for one month (e.g., server costs, transaction fees, support).
- Breakeven Customers (Q): The number of customers you need to reach $0 in operating profit (i.e., breakeven).
Related Calculators
- SaaS Breakeven Calculator
- Startup Runway Calculator
- Monthly Burn Rate Calculator
- Customer Acquisition Cost (CAC) Calculator
What is a Startup Breakeven Point?
A **Startup Breakeven Point** is the number of paying customers per month a startup needs to have for its total revenue to equal its total costs. This is the moment a startup stops losing money and becomes “default alive” or “ramen profitable.”
For most early-stage startups, the primary goal is to reach this breakeven point before their investor cash (runway) runs out. **Fixed Costs (F)** are the company’s “burn rate”—the total cost of salaries, rent, and tools needed to keep the lights on, even with zero customers. **Variable Costs (V)** are the costs that scale with each new customer, such as cloud hosting, API usage, or payment processing fees.
The **Contribution Margin** (P – V) is the monthly profit you make from each customer. This calculator determines how many customers, each contributing this margin, are needed to pay for the company’s total fixed costs.
How to Calculate Startup Breakeven (Example)
Let’s calculate the breakeven point for a new SaaS (Software-as-a-Service) startup.
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Identify Monthly Fixed Costs (F):
The startup’s total monthly burn rate (salaries, office, software) is $20,000.
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Identify Avg. Revenue per Customer (P):
The startup has one subscription plan, priced at $99.00 per month.
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Identify Avg. Variable Cost (V):
The server hosting and API costs to support one customer for one month average $15.00.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per customer: $99.00 (P) – $15.00 (V) = $84.00.
Next, divide the fixed costs by this margin:
Q = $20,000 / $84.00 ≈ 238.1 -
Conclusion:
The startup must acquire and maintain 239 paying customers (rounding up) each month to cover all its costs and stop burning cash.
Frequently Asked Questions (FAQ)
A Runway Calculator tells you how many *months* you have until you run out of cash. This Breakeven Calculator tells you how many *customers* you need to get to stop the clock from running out.
The logic is universal. If you’re an e-commerce startup, (P) is your average order value, and (V) is your average COGS. If you’re a service business, (P) is your average project price, and (V) is your average cost to deliver that project.
It depends. If you have a fixed marketing budget, add it to (F). If you have a variable cost per acquisition (e.g., you pay $10 in ads for one signup), you should add that to (V).
Work backward. Determine your monthly Fixed Costs (F), your per-customer cost (V), and decide how many customers (Q) you can realistically acquire. Then, solve for (P). This tells you the *minimum price* you must charge to build a viable business.