The break-even point is reached when your total sales revenue (total sales revenue = per unit price × number of units sold) completely covers all costs (both fixed and operational); this is the point where further sales result in profit being created.
Clearly, you want your business to perform better than this, but it is useful to know where this point is, that is, how many units do you need to sell at what price? Sell more than the break-even number and you make a profit, sell less and you’re going broke.
For further explanation and a worked example, see Break Even Calculator.
