Sales Drop Calculator
How much can my sales fall before my business is in trouble?
Two different limits. Sales can fall 3.8% before the sample business stops making money (break-even at $50,000 a month), and 30.9% before the cash above its reserve is used up within 6 months. The first is a warning; the second is the real edge.
‘Could we survive a 20% drop?’ has an exact answer. It depends on four numbers you already know: sales, gross margin, fixed outflows and the cash above your reserve. The calculator finds both limits and shows how long the reserve lasts at each drop.
TightSales can fall 3.8% before you lose money and 30.9% before the reserve breaks within 6 months.
| Monthly profit today | $900 | sales × gross margin − other monthly outflows |
|---|---|---|
| Break-even sales per month | $50,000 | outflows ÷ gross margin |
| Largest drop that still breaks even | 3.8% | below this the business loses money every month |
| Largest drop you can carry | 30.9% | for 6 months without going below your reserve |
| Minimum sales to survive | $35,926 | per month, for 6 months |
| Sales drop | Monthly sales | Monthly profit | Runway to reserve |
|---|---|---|---|
| 5% | $49,400 | -$270 | 140.7 months · 4,280 days |
| 10% | $46,800 | -$1,440 | 26.3 months · 802 days |
| 15% | $44,200 | -$2,610 | 14.5 months · 442 days |
| 20% | $41,600 | -$3,780 | 10.0 months · 305 days |
| 25% | $39,000 | -$4,950 | 7.6 months · 233 days |
| 30% | $36,400 | -$6,120 | 6.2 months · 188 days |
| 40% | $31,200 | -$8,460 | 4.4 months · 136 days |
| 50% | $26,000 | -$10,800 | 3.5 months · 107 days |
Runs in your browser with fixed, tested formulas — the same exact arithmetic as the Business X-Ray. Nothing you type is sent or stored.
One question answered. Eight more are waiting.
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
Break-even sales are your other monthly outflows divided by gross margin. The largest drop that still breaks even is 1 − break-even ÷ current sales — accountants call it the margin of safety. It is rounded down, so the calculator never tells you that a drop is survivable when it is not.
The second limit uses your cash. Over the months you choose, the business may lose at most the cash above your reserve. Minimum sales = (outflows − cash above reserve ÷ months) ÷ gross margin, and the largest survivable drop follows from it.
The formula
Break-even sales = other monthly outflows ÷ gross margin.
Survivable sales = (other monthly outflows − (cash − reserve) ÷ months) ÷ gross margin.
Largest drop = 1 − limit ÷ current sales, rounded down to 0.01%.
Why two limits
Break-even tells you when the business stops making money. It does not tell you when it stops. Between the two sits your cash: a business with a thin margin of safety but a deep reserve can ride out a bad season, and one with a healthy margin but no cash cannot survive a late customer. Seeing both numbers side by side is what makes the decision — cut now, or wait — a calculation rather than a feeling.
Worked example
The sample business makes $900 a month. Break-even is $50,000, so a drop of just 3.8% wipes out the profit. Yet the cash above its reserve lets it carry a drop of 30.9% for 6 months, at a minimum of $35,926 in monthly sales. The table shows how quickly the runway shortens past the break-even line.
What this calculator does not do
- Monthly averages, one margin for all sales, no seasonality.
- It does not model cost cuts, new financing or customers paying late — the Business X-Ray tests those together.
- Fixed outflows are treated as fixed for the whole period.
Questions people ask
What is margin of safety?
The percentage by which sales can fall before the business reaches break-even. It is the first of the two limits on this page.
Why does a 20% sales drop not cut profit by 20%?
Because fixed outflows do not fall with sales. Every lost sale takes its whole gross profit with it, so profit falls much faster than sales — the effect called operating leverage.
What should I put as the number of months?
How long a drop could realistically last in your trade — a lost contract, an off-season, a slow quarter — or how long you would need to cut costs. Six months is a common starting point, not a rule.
Does it include cost cutting?
No, deliberately. It shows what happens if nothing changes, which tells you how much time you have to make a change.
Related decisions
- Cash Runway Calculator — How many months your cash lasts — now, with no sales, and if sales fall.
- Break-Even Calculator — The sales and units that cover your costs — and your margin of safety.
- Customer Concentration Risk Calculator — Which customer's loss would put you in the red — and how fast.
- Cost Increase Calculator — What a cost rise does to profit and runway, and the price rise that covers it.
- How to stress test your small business cash flow
- How long can my business survive without sales?
Formulas reviewed 26 September 2026
