I want a monthly profit of 5,000, not just to break even: how many units does that take?

Why the trick works

The Break-even calculator has no target-profit field, but the maths is identical. Break-even is the number of units whose contribution covers a given amount. Normally that amount is your fixed costs; add the profit you want to it and you are asking how many units cover both your costs and your profit.

It helps to think of the target as a wage the business has to pay you every month, just like any other fixed cost.

Step by step

1. Work out break-even first: fixed costs 10,000, price 50, variable cost 30. The contribution is 20 and break-even is 500 units.
2. Add the target profit to fixed costs: 10,000 + 5,000 = 15,000.
3. Enter 15,000 as fixed costs with the same price and cost. The result is 750 units, with revenue of 37,500 at that volume.
4. The difference is 250 units, which is simply 5,000 ÷ 20. Every unit past break-even adds its full contribution to profit.

A bigger target at a different price

If 750 units feels out of reach, try a price of 55 with the cost still at 30 and a total of 17,000, meaning 10,000 of fixed costs plus a 7,000 profit target. The contribution becomes 25 and the result is 680 units. A slightly higher price reaches a bigger profit with fewer units than the first example, which is why it pays to run a few scenarios before you set the month's goal.

What 'net' means here

• The profit you get this way is before tax. The calculator does not handle tax, so if profits are taxed where you operate, what you keep is less.
• It is accounting profit, not cash in the bank. If you buy new stock the same month, your balance can be under 5,000 even though you hit the target.
• If your own salary is already inside fixed costs, the target here is on top of it, so do not count it twice.

To see the profit percentage on a single unit, use the Profit margin calculator; for a price that hits a set margin after fees, try the Selling-price calculator.