Understanding your costs saves you from the nasty surprise of working hard for nothing. There are two big families: fixed costs and variable costs.

Fixed and variable

  • Fixed costs: they land whatever happens (rent, subscriptions, insurance).
  • Variable costs: they depend on the volume you sell (materials, commissions, delivery).

Calculating your break-even point

The break-even point is the revenue you need to cover all your costs. Below it you lose money; above it you make money.

Monthly fixed costs      : 800 €
Margin per sale          : 40 € (price 79 € - variable cost 39 €)
Break-even = 800 / 40    = 20 sales / month
Beyond 20 sales          -> every sale becomes profit

Here you need to sell 20 units a month just to break even. That very concrete figure immediately tells you whether the target is reachable. With micro-enterprise status, remember to add URSSAF contributions (a percentage of revenue) to your calculations: they are part of the real cost.

Key takeaway: separate fixed and variable costs, work out your break-even point (fixed costs ÷ margin) and factor in URSSAF contributions.

PreviousNext