Add your monthly costs, your price and what each sale costs you. We will work out your break-even point, then turn it into the calls and leads you need every month.
Your break-even point is the number of sales where income covers every cost and profit is zero. The formula is fixed costs ÷ (price minus variable cost per sale). With £8,000 of monthly costs, a £2,000 programme and £200 delivery per client, you need 5 clients a month.
Who this is for: Coaches, consultants, service businesses and product sellers who want to know how many sales a month keep the lights on.
Your break-even point is where the money coming in exactly covers the money going out. Below it you lose money each month. Above it, every extra sale is profit.
The formula has two parts. First, work out what each sale leaves you after its own costs. That is your contribution margin: price minus variable cost per sale. Then divide your fixed costs by it:
Break-even units = fixed costs ÷ (price minus variable cost per unit)
Say you sell a product for £50 that costs £20 to make and ship, and your monthly fixed costs are £6,000. Each sale leaves £30, so you need £6,000 ÷ £30 = 200 sales a month. Your break-even revenue is 200 × £50 = £10,000.
If you only know your margin as a percentage, use break-even revenue = fixed costs ÷ contribution margin ratio. A £30 margin on a £50 price is a 60% ratio, and £6,000 ÷ 0.6 = £10,000. Same answer.
For coaches and consultants the maths is the same, but the unit is a client. Add up your monthly fixed costs, including the pay you need to take home. Then take your programme price, subtract what it costs to deliver to one client, and divide.
The table shows how much price changes the answer. It assumes £8,000 a month in costs, £200 delivery cost per client, a 25% close rate on calls and 20% of leads booking a call.
| Programme price | Clients a month | Calls a month | Leads a month |
|---|---|---|---|
| £500 | 27 | 108 | 540 |
| £1,000 | 10 | 40 | 200 |
| £2,000 | 5 | 20 | 100 |
| £3,000 | 3 | 12 | 60 |
| £5,000 | 2 | 8 | 40 |
At £500 you need 540 leads a month just to stand still. At £3,000 you need 60. That is why how you price your offer matters as much as how much marketing you do.
Knowing you need 5 clients a month is only half the answer. The useful question is what has to happen every month to get them. Work backwards:
Use your own rates if you track them. If you do not, 20% to 30% on calls and 10% to 30% of leads booking a call are rough starting points, not benchmarks. When the gap is in leads and calls, the fix is a steady sales funnel for coaches, not a lower price.
A fixed cost stays the same whether you sell nothing or sell a lot. A variable cost goes up with each sale.
The common mistake for coaches is leaving out their own pay. Without it the break-even point looks tiny and the business looks healthy, while you quietly work for free. Our consulting rate calculator helps you work out what that pay figure should be.
Divide your fixed costs by your contribution margin, which is your price minus the variable cost of each sale. With £6,000 of fixed costs, a £50 price and a £20 cost per sale, you need £6,000 ÷ £30 = 200 sales a month.
Add up your monthly costs including your own pay, then divide by what each client leaves after delivery costs. With £8,000 of costs and a £2,000 programme costing £200 to deliver, you need 5 clients a month.
Yes. If you leave it out, the business can look like it breaks even while you work for nothing. Put in the pay you need to take home, and the break-even point tells you what the business must earn to pay you.
The break-even point is the number of sales or clients you need. Break-even revenue is the money that number brings in. Multiply the break-even point by your price, or divide fixed costs by your contribution margin ratio.
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