Breakeven Calculator

Break-even splits your costs in two. Fixed costs arrive whether or not you sell anything this week: rent, insurance, software, finance repayments, the phone. Variable costs move with each sale — products used on the client, consumables, merchant fees. What is left of a sale once its variable costs are paid is the contribution, and the contribution is what covers the fixed costs. Break-even is where the contributions have covered all of them.

That is the arithmetic above. Your weekly fixed costs are divided by the share of each dollar left after product cost, which gives the weekly revenue floor; the monthly figure is that number scaled up. If you entered an average transaction value, the last line divides the floor by it and rounds up — turning a dollar figure into the thing you actually manage: clients through the door, or jobs on the board, per week.

Note what the floor excludes. Wages are not in it. Neither is tax, nor anything for you. It is the cost of existing for a week with the doors open, and a business sitting exactly on that line has paid its landlord and its insurer and has paid nobody who did any work.

We are not going to hand you a figure to compare this against, and it is worth saying why rather than leaving it out. Nobody we would cite publishes a break-even benchmark. There is no published revenue floor for a salon, a trade or a clinic — the number is built out of your own lease, your own finance, and what you chose to carry. A figure in that shape would have to be invented, and an invented number is worse than none, because you would price against it.

So the standard is internal, and there are three honest tests. Whether you know the number at all: most owners can name their rent and not their floor, and so cannot tell a slow week from a dangerous one. When in the period you clear it — passing break-even on the Tuesday of week one is a different business from passing it on the last day of the month, even when both end level. And the size of the gap between the floor and what you actually bring in, because that gap is what pays wages, tax, the equipment that will need replacing, and you.

Run it twice: once as it stands, and once with a market wage for yourself in the fixed costs — what you would have to pay somebody else to do what you do. The difference between those two floors is what the business currently takes from you rather than earns.

If the floor is higher than you can reliably clear, three levers exist and they are not equal. Raise price, so each sale contributes more. Reduce what it costs to deliver, so more of each sale survives. Or cut fixed costs, so there is less to cover. Owners under pressure reach for the third first, because it feels decisive and it is entirely within their control. It is frequently the smallest of the three, and it removes the capacity you will need on the way back up.

The reflex that costs the most is the other one: deciding the answer is more clients. Volume through a model that contributes too little per sale reaches the floor faster and goes no further past it. That is the mechanism behind a business that is busy every day and has nothing at the end of the month.

Read it monthly, not annually — costs arrive on a schedule and revenue does not, so a business can clear break-even across a year and still be unable to pay February. And use the same basis on both sides: if the revenue you have in mind includes GST and the costs you typed do not, the floor you are looking at is not your floor.