Minimum Price Calculator
What is the lowest price I can charge?
The lowest price that still pays its way is the direct cost of a unit, plus its share of fixed costs at your real volume, plus the cost of waiting to be paid. For the sample business that is $119.50; with a 20% margin on top, the floor is $149.38.
Pricing from direct cost plus a markup quietly ignores the rent, the payroll and the weeks between delivering and getting paid. This calculator builds the price from the bottom up, so the floor it gives you covers everything — and it shows how the floor moves when volume changes.
TightYour price covers costs but sits $29.38 under the $149.38 floor — you earn less than your 20% target on every unit.
| Minimum safe price | $149.38 | break-even price ÷ (1 − 20%); a markup of 25.0% on full cost |
|---|---|---|
| Break-even price | $119.50 | every cost covered, no profit |
| Direct cost per unit | $66.00 | what the unit itself costs |
| Share of fixed costs | $52.33 | fixed costs ÷ 430 units, rounded up |
| Cost of waiting to be paid | $1.17 | per unit, 30 days at 12.0% a year |
| Current price versus the floor | -$29.38 | per unit; -$12,633 a month at your volume |
| Units a month | Fixed share | Break-even price | Minimum price |
|---|---|---|---|
| 215 | $104.66 | $172.35 | $215.44 |
| 323 | $69.66 | $137.00 | $171.25 |
| 430 | $52.33 | $119.50 | $149.38 |
| 645 | $34.89 | $101.89 | $127.37 |
| 860 | $26.17 | $93.08 | $116.35 |
Runs in your browser with fixed, tested formulas — the same exact arithmetic as the Business X-Ray. Nothing you type is sent or stored.
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This page tests one thing with a few monthly numbers. The Business Decision X-Ray runs your whole business through the same engine, day by day: nine tests, the exact breakpoint, the smallest repair and a dated action plan. Open demo of every section, no sign-up.
How this calculator works
Start with the direct cost of one unit. Add its share of fixed costs: fixed monthly costs ÷ units you realistically sell a month. Add the cost of waiting to be paid: the money you have tied up in that unit × your cost of money × days until paid ÷ 365. That sum is the break-even price — below it, each sale loses money.
Then the margin. A 20% margin means 20% of the PRICE is profit, so the floor is break-even ÷ (1 − 20%), not break-even × 1.2. The calculator also prints the equivalent markup on cost, because the two percentages are easy to confuse.
The formula
Break-even price = unit cost + fixed costs ÷ units + (unit cost + fixed share) × cost of money × days ÷ 365.
Minimum price = break-even price ÷ (1 − target margin). Every step is rounded up to the cent.
Worked example
The sample business sells a product with a direct cost of 66. Its share of fixed costs at 430 units a month and the cost of waiting 30 days bring the break-even price to $119.50. With a 20% margin, the floor is $149.38. It charges 120 today — enough to cover costs, but $29.38 short of the floor on every unit. The table shows why volume matters: at half the volume the floor rises sharply.
What this calculator does not do
- One product at one price; for a range, run it per product with each product's share of fixed costs.
- It does not include competitor prices or what customers will pay — it tells you the floor, not the ceiling.
- Taxes on sales (VAT, sales tax) are not included; enter prices before tax.
Questions people ask
What is a price floor?
The lowest price at which a sale still covers every cost and the margin you need. Below it you are working for less than your target, or for nothing.
Why include fixed costs in a unit price?
Because something has to pay the rent. If every price covers only its direct cost, the fixed costs are covered by nothing.
Margin or markup — which should I use?
Either works if you are consistent. A target margin of 20% equals a markup of 25% on cost. This calculator takes a margin and shows the markup next to it.
What if my volume is uncertain?
Use the volume you are confident of, not the one you hope for. The table shows the floor at half, three-quarters, one-and-a-half and twice your volume.
Related decisions
- Break-Even Calculator — The sales and units that cover your costs — and your margin of safety.
- Deposit Calculator — The smallest deposit that keeps a big order from draining your cash.
- Payment Terms Cash Flow Calculator — What Net 60 or Net 90 does to your cash — before you agree to it.
- Cost Increase Calculator — What a cost rise does to profit and runway, and the price rise that covers it.
- How to Price Coffee Drinks and Keep Your Cafe Profitable
- How to price your home bakery so every bake actually pays you
Formulas reviewed 26 September 2026
