Cash flow break-even is the point where monthly revenue equals monthly operating expenses, so net burn from operations is zero.
Why It Matters for Startups
Until break-even, the startup consumes cash (runway). After break-even, it can fund itself from revenue (before reinvesting in growth). Investors and boards use it to assess path to profitability.
Formula and Components
Break-even revenue = Monthly operating expenses. If current revenue is below that, months to break-even depend on monthly revenue growth.
The Calculation Identity
Break-even revenue = Monthly operating expenses
Months to break-even = log(Opex ÷ Current revenue) ÷ log(1 + Monthly growth % ÷ 100)
Defining Opex and Revenue
Opex = salaries, rent, software, marketing, and other monthly cash operating costs. Revenue = recurring or predictable monthly revenue. Growth rate is monthly (e.g. 5% per month).
Interpreting Results and Benchmarks
If you are already at or above break-even, net burn from operations is zero. If not, a shorter time to break-even (e.g. under 12–18 months) is generally better, assuming runway lasts that long.
The Runway Constraint
Ensure runway exceeds months to break-even; otherwise you run out of cash before reaching profitability. Pair this calculator with a runway calculator.
Break-Even vs Runway
Runway = how long cash lasts at current burn. Break-even = when revenue covers opex. You need runway >= months to break-even (or new funding) to reach profitability without running out of cash.
How to Reach Break-Even Sooner
Increase revenue growth through pricing, distribution, and product.
Reduce monthly opex without hurting growth (e.g. efficiency, outsourcing).
Extend runway (fundraising or cost cuts) so you have enough time to reach break-even.
Conclusion
Startup cash flow break-even is the core milestone where revenue covers operating expenses. Use it with runway and burn rate to plan your path to profitability.
Target a realistic time to break-even and ensure runway (or funding) lasts at least that long.
Frequently Asked Questions
Common questions about startup cash flow break-even
What is startup cash flow break-even?
Cash flow break-even is the point where monthly revenue equals monthly operating expenses, so net burn is zero. The startup stops consuming cash from operations at that level.
How do I calculate months to break-even?
Break-even revenue equals monthly operating expenses. If current revenue is below that and you have a monthly growth rate, months to break-even = log(break-even revenue / current revenue) / log(1 + growth rate/100).
What if I have zero revenue growth?
If revenue does not grow and is below opex, you never reach break-even without cutting expenses or raising revenue. The calculator shows break-even revenue; you need to change inputs to get there.
Should I use monthly or annual growth?
Use monthly growth for the formula. If you have annual growth, convert: e.g. 10% annual compound growth is roughly (1.10^(1/12) - 1) × 100 ≈ 0.8% per month.
Does break-even include debt repayment?
Only if you include debt service in monthly operating expenses. For a strict opex-only break-even, exclude principal; including interest in opex is common.
How does break-even relate to runway?
Runway is how long your cash lasts at current burn. You need runway to be at least as long as months to break-even (or you need funding) to reach profitability before running out of cash.
What is a good time to break-even for a startup?
It depends on sector and strategy. Many startups target 18–36 months to break-even; others stay growth-focused longer. Ensure runway exceeds time to break-even.
Can I be at break-even and still need funding?
Yes. At break-even, net burn from operations is zero, but you may reinvest in growth (marketing, R&D), which increases burn again. Break-even means you could sustain without growth spend.
Why do investors care about break-even?
Investors use break-even to assess path to profitability and capital efficiency. A clear path with runway > months to break-even reduces risk and supports valuation.
What is the difference between cash flow break-even and profit break-even?
Cash flow break-even is when revenue covers cash opex (no accounting accruals). Profit break-even includes depreciation and non-cash items. For startups, cash flow break-even is usually the relevant milestone.
Usage of this Calculator
Practical applications and real-world context
Who Should Use This Calculator?
Startup Founders & CFOsTo plan when revenue will cover opex and to align with runway.
Investors & Board MembersTo assess path to profitability and capital needs.
Finance & Ops TeamsTo model scenarios (growth, opex) and report to leadership.
Accelerators & AdvisorsTo help portfolio companies plan break-even and runway.
Limitations & Accuracy nuances
Constant growth: Formula assumes constant monthly growth. Real growth is often lumpy; use as a guide, not a guarantee.
Opex changes: If you add headcount or costs, break-even revenue rises. Update inputs when plans change.
After break-even: Many startups reinvest and burn again. Break-even means you could sustain; growth spend is a choice.
Real-World Examples
Case A: Early SaaS with strong growth
Opex $40K, revenue $15K, growth 8%/month → break-even in ~13 months. With 18 months runway, the startup reaches break-even before cash runs out.
Case B: Already at break-even
Opex $60K, revenue $65K → already at break-even. Net burn from operations is zero; any additional spend is growth reinvestment.
Summary
The Startup Cash Flow Break-Even Calculator shows when monthly revenue equals monthly operating expenses and estimates months to reach that point given revenue growth.
Use it with runway and burn rate calculators to ensure you have enough cash to reach break-even.
Target a realistic path to break-even and keep runway longer than months to break-even (or plan funding).
Embed This Calculator
Add this calculator to your website or blog using the embed code below:
<div style="max-width: 600px; margin: 0 auto;">
<iframe
src="https://mycalculating.com/category/finance/startup-cash-flow-break-even-calculator?embed=true"
width="100%"
height="600"
style="border:1px solid #ccc; border-radius:8px;"
loading="lazy"
title="Startup Cash Flow Break Even Calculator Calculator by MyCalculating.com"
></iframe>
<p style="text-align:center; font-size:12px; margin-top:4px;">
<a href="https://mycalculating.com/category/finance/startup-cash-flow-break-even-calculator" target="_blank" rel="noopener">
Use full version on <strong>MyCalculating.com</strong>
</a>
</p>
</div>
Calculate when your startup reaches cash flow break-even: revenue covers operating expenses. Uses current revenue and monthly growth rate.
How to use Startup Cash Flow Break-Even Calculator
Step-by-step guide to using the Startup Cash Flow Break-Even Calculator:
Enter your values. Input the required values in the calculator form
Calculate. The calculator will automatically compute and display your results
Review results. Review the calculated results and any additional information provided
Frequently asked questions
How do I use the Startup Cash Flow Break-Even Calculator?
Simply enter your values in the input fields and the calculator will automatically compute the results. The Startup Cash Flow Break-Even Calculator is designed to be user-friendly and provide instant calculations.
Is the Startup Cash Flow Break-Even Calculator free to use?
Yes, the Startup Cash Flow Break-Even Calculator is completely free to use. No registration or payment is required.
Can I use this calculator on mobile devices?
Yes, the Startup Cash Flow Break-Even Calculator is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.
Are the results from Startup Cash Flow Break-Even Calculator accurate?
Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.