How to Calculate Break-Even for Your Craft Business
How to calculate break-even for a craft business: fixed costs, profit per item and units needed, with worked examples.
In this guide
Break-even is the number of sales you need to cover your monthly costs. Below it you lose money; above it you profit. This guide shows how to find your break-even and how pricing changes it.
- Break-even units = monthly fixed costs / profit per item.
- Profit per item = price - variable costs (materials, packaging, fees).
- Raising prices lowers the number of sales you need.
- Know your break-even before buying new equipment.
Why break-even matters
It turns your costs into a clear monthly sales goal.
It shows whether a price is high enough to support your business.
The steps
1. List fixed costs
Software, subscriptions, equipment payments, booth rent.
2. Find variable cost per item
Materials, packaging and fees.
3. Find profit per item
Price minus variable cost.
4. Divide
Fixed costs / profit per item.
5. Test prices
See how a price change moves the goal.
Worked example: cost and price for three products
$20 an hour, 10% overhead, 30% profit and 10% fees.
| Sticker pack | HTV shirt | Engraved tumbler | |
|---|---|---|---|
| Materials and packaging | $2.00 | $7.00 | $10.00 |
| Labor at $20.00/hr | 0.15 hr = $3.00 | 0.33 hr = $6.60 | 0.25 hr = $5.00 |
| Overhead (10%) | $0.50 | $1.36 | $1.50 |
| Cost to make | $5.50 | $14.96 | $16.50 |
| Plus 30% profit | $7.15 | $19.45 | $21.45 |
| Cover 10% selling fees (divide by 0.90) | $7.94 | $21.61 | $23.83 |
| Suggested price | $8 | $22 | $24 |
The next section uses these prices to find break-even.
Break-even table ($300 a month in fixed costs)
| Product | Price | Profit per item after materials, fees and labor | Units to break even |
|---|---|---|---|
| Sticker pack | $8.00 | $1.70 | 177 |
| HTV shirt | $22.00 | $4.84 | 62 |
| Engraved tumbler | $24.00 | $5.10 | 59 |
Profit per item here means price minus fees and full cost, including your labor. Higher priced items reach break-even with fewer sales.
Pricing mistakes to avoid
- Forgetting fixed costs. List every monthly cost.
- Ignoring fees. Fees reduce profit per item.
- Pricing too low. Low profit per item means many more sales.
- Buying equipment without math. Check break-even first.
Break-even checklist
- Fixed costs.
- Variable costs.
- Profit per item.
- Units needed.
- Price tests.
Find your break-even
Type your fixed costs and product prices into the peach cells. The calculator shows monthly sales goals.
Get the Break-Even CalculatorCalculators that help
- Overhead: Find fixed costs. Use the Craft Business Overhead Calculator – Overhead per Hour, per Item, Overhead % & Shop Rate.
- Etsy break-even: Etsy sales goal. Use the Etsy Break-Even and Sales Goal Calculator.
- Equipment payback: Check payback. Use the Laser Equipment Payback Calculator – Diode, CO2, Fiber & Upgrades.
- Cash flow: Forecast cash flow. Use the 12-Month Cash Flow & Profit Forecast – Growth, Holiday Seasonality, Owner Pay, Lowest Cash Month & Year-End Cash.
Common questions
What is break-even?
The sales needed to cover your costs.
How do I calculate it?
Fixed costs / profit per item.
What are fixed costs?
Costs that stay the same each month.
How does price affect break-even?
Higher prices lower the units needed.
Should I include my pay?
Yes, include labor in cost if you want to be paid.
How often should I check?
Monthly or when costs change.
Get every calculator in one download
The Lifetime Spreadsheet Vault includes this calculator and 320+ more for candles, tumblers, vinyl, resin, baking, crochet, laser and more. Pay once, and every future spreadsheet is included.
See the Lifetime VaultRelated guides
Lifetime Spreadsheet Vault
Stop guessing your prices. For every craft you sell.
- 323+ editable pricing spreadsheets in 29 craft categories
- Type your numbers in the peach cells. The math is done.
- Works in Google Sheets, Excel and Numbers
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