How break-even is calculated
- Contribution
price − cost to serve one customer- Break-even customers
fixed costs ÷ contribution per customer (rounded up)- Break-even MRR
break-even customers × price- Profit today
customers × contribution − fixed costs
Fixed costs vs cost to serve
Fixed costs stay the same whether you have ten customers or a thousand: salaries, rent, most software. Cost to serve grows with every customer: hosting, payment processing fees, support time, third-party API calls. Only the gap between price and cost to serve pays down your fixed costs.
Why does a price rise move break-even so much?
A price increase goes straight to contribution, because cost to serve does not change. If you charge $49 and serving a customer costs $6, raising to $59 lifts contribution from $43 to $53, about 23% more, so you need roughly a fifth fewer customers to break even.
What if the calculator says never?
Each customer costs more to serve than they pay, so growth makes the loss bigger. Fix unit economics before spending on acquisition: raise the price, drop an expensive plan, or cut the cost to serve.
Break-even is not the same as default alive
Break-even tells you the target. Whether you reach it before the cash runs out depends on your growth rate and burn. Use the burn rate calculator to check the timing.