Break-Even Point and Profit Margin
How many sales do you need to break even? What's your real margin per project? This guide gives you the essential formulas with applied examples.
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Fixed vs variable costs
Fixed: rent, salaries, software (don't change with sales). Variable: materials, commissions (scale).
Contribution margin
Sale price - unit variable cost. It's what each sale contributes toward fixed costs and profit.
Break-even point (units)
Fixed costs ÷ contribution margin. The minimum number of units/projects to not lose money.
Break-even point (€)
Fixed costs ÷ (contribution margin / price). The minimum monthly revenue to cover expenses.
Gross vs net margin
Gross: (Revenue - direct cost) / Revenue. Net: after ALL expenses. Don't confuse them.
Profitability per client
Some clients cost more than they bring in. Calculate CAC + service cost for each account.
💡 42% of SMBs don't know their exact break-even point.
Source: Industry survey 2024
💡 Raising prices 5% without losing clients equals a 25% increase in profit.
Source: McKinsey
Control margins on every quote
DealForge alerts you if you quote below the minimum margin. Protect your profitability.