Break-Even Analysis Calculator for New Offers

1. Offer Economics Input

Ask the user about the offer they're launching—what are they selling, what's the price point, and what's included?
- Example: "What's your new offer—product, service, course, subscription—what will it cost customers, and what do they get?"
Ask the user about fixed costs to launch and operate this offer—development, setup, software, initial marketing.
- Example: "What are your one-time and ongoing fixed costs—product development, platform fees, software, baseline marketing, or team time?"
Ask the user about variable costs per sale—fulfillment costs, transaction fees, support, delivery, or cost of goods sold.
- Example: "What does each sale cost you—COGS, payment processing fees, delivery/shipping, customer support, or service delivery time?"
Ask the user about marketing/acquisition costs—what will you spend to generate sales, and what's your expected conversion rate?
- Example: "How much will you spend on marketing/ads, what conversion rate do you expect (leads to sales), and what's your target CAC?"

2. Break-Even Calculation Framework

Fixed Costs (FC):

One-time setup costs (amortize over expected lifetime of offer)
Monthly fixed costs: Software, tools, team allocation, overhead
Total Fixed Costs per period (monthly or annual)

Variable Costs per Unit (VC):

Direct costs per sale: COGS, payment processing (%), fulfillment, delivery
Support/service time: Estimated hours × hourly rate
Total Variable Cost per Unit

Contribution Margin:

Selling Price - Variable Cost per Unit = Contribution Margin
This is how much each sale contributes to covering fixed costs

Break-Even Unit Calculation:

Break-Even Units = Fixed Costs ÷ Contribution Margin
This is how many sales needed to cover all costs (zero profit)

Break-Even Revenue:

Break-Even Units × Selling Price = Total Revenue Needed

3. Scenario Modeling

Model break-even under different scenarios:

Scenario 1: Conservative (Lower Price or Higher Costs):

Price: 10-15% below target
Costs: 10-15% above estimate
Conversion: 20-30% below expected
Break-even units: X
Timeline to break-even: Y months (based on conservative sales projections)

Scenario 2: Base Case (Expected Performance):

Price: Target price
Costs: Estimated costs
Conversion: Expected rate
Break-even units: X
Timeline to break-even: Y months

Scenario 3: Optimistic (Higher Price or Lower Costs):

Price: 10-15% above target (premium positioning)
Costs: 10% below estimate (efficiencies)
Conversion: 20% above expected
Break-even units: X
Timeline to break-even: Y months

Profitability Projections: Once break-even is reached, show profit trajectory:

Month 1-X: Losses accumulating
Month X: Break-even point
Month X+6: Projected profit if sales continue
Month X+12: Cumulative profit at different sales volumes

4. Sensitivity Analysis

Show how break-even changes with key variable adjustments:

Price Sensitivity:

If price increases 10%: Break-even units decrease to X (-Y%)
If price decreases 10%: Break-even units increase to X (+Y%)

Cost Sensitivity:

If fixed costs increase 20%: Break-even units increase to X
If variable costs decrease 15%: Break-even units decrease to X

Volume Sensitivity:

At 50 sales/month: Profitability timeline
At 100 sales/month: Profitability timeline
At 200 sales/month: Profitability timeline

CAC Sensitivity:

If customer acquisition cost increases 30%: Impact on break-even and profitability timeline
If conversion rate improves 50%: Lower effective CAC, faster break-even

Identify which variables have the biggest impact on break-even (usually price and fixed costs).

5. Strategic Dashboard & Recommendations

Present complete break-even analysis:

Break-Even Summary Table: | Scenario | Selling Price | Fixed Costs | Variable Costs | Contribution Margin | Break-Even Units | Break-Even Revenue | Months to Profitability | |----------|---------------|-------------|----------------|---------------------|------------------|--------------------|--------------------|

Visual Break-Even Chart:

Line graph showing: Fixed costs (horizontal line), Total costs (rising line), Revenue (rising line), and break-even intersection point

Key Insights:

Minimum viable sales volume needed
Most sensitive variables (where to focus optimization)
Cash requirements before profitability
Risk assessment: How achievable is break-even based on market size and conversion assumptions?

Strategic Recommendations:

If break-even is too high: Consider reducing fixed costs, increasing price, or improving efficiency
If break-even is achievable: Focus on marketing efficiency to reach volume quickly
If break-even is easily achievable: Consider investing more in growth to capture market faster

Action Plan:

Week 1-4: Launch offer, track early sales and costs against projections
Month 2-3: Adjust pricing or costs if off-track
Monthly: Update break-even analysis with actual data
Milestone triggers: What to do if behind/ahead of break-even timeline

Risk Mitigation:

Contingency plan if sales are 50% below projections
When to pivot pricing or positioning
Minimum cash runway needed to reach break-even