The break-even formula
Break-even units = Fixed costs ÷ (Price − Cost per item)
The bottom of that fraction — price minus cost — is your contribution margin: what each sale contributes toward covering your fixed costs. Once you've sold enough to cover them all, every extra sale is profit.
Example: fixed costs of $3,000/month, coffees priced at $4.00 that cost you $1.20. Each cup contributes $2.80, so you break even at about 1,072 cups a month (~36 a day).
Why it matters for a small shop
- It turns "am I making money?" into a clear daily target.
- It shows how a price change or a rent increase moves the number you need to hit.
- It helps you spot when a low-margin item is dragging the whole shop.
From a one-off estimate to a living number
Your costs and prices change, and so does your break-even point. TallyRun records each sale and keeps your cash on hand and daily totals current, so you're always measuring against reality — not last month's spreadsheet.