In 2026, many Australian business owners work 60+ hours a week but don't actually know if they've made a profit until their accountant tells them 12 months later. This is a recipe for disaster. To sleep soundly, you need to know your **Break-Even Point.** This is the "magic number" that tells you exactly how many coffees, projects, or consulting hours you need to sell to keep the lights on. Let's calculate yours.
Accounting theory gives us a simple mathematical formula to find the number of units (or dollars) you need to sell:
Fixed costs are the bills you have to pay even if you sell **zero** products this month. In 2026, these typically include:
This is the "Price minus Variable Cost" part of the formula. If you sell a shirt for $50 and the fabric and shipping cost you $20, your contribution margin is $30. This $30 is what's left over to pay for your rent and software.
If your break-even point is 20 units per day, and you're only selling 18, you are losing money every single day. A break-even analysis allows you to answer the "What-If" questions:
đź’ˇ Pro Tip: Use **Xero's Financial Reports** to track your fixed vs. variable costs accurately. If your "Break-Even" number is getting higher every month, your overheads (fixed costs) are becoming bloated.
Profit only happens **after** you pass the break-even point. By knowing that today's first 5 sales pay for the rent, and the next 15 pay for the staff, you can focus on the 21st sale—where your actual profit starts. At PrepMyBook, we help our clients find their break-even point as their first step in business coaching. Let's make 2026 your most profitable year yet.
Our financial strategy experts can build you a custom break-even model for your business, showing you exactly how many sales you need to hit your target profit. Let’s clean up your strategy.
Talk to a Finance Specialist