The break-even formula is: Fixed Costs ÷ Gross Margin %. For example, if your monthly fixed costs are AED 50,000 and your gross margin is 50%, you need AED 100,000 in monthly revenue to break even. In UAE startups, break-even analysis is especially important at launch because fixed overheads — trade licence fees, visa costs, office rent, and mandatory employee benefits — are front-loaded and often higher than founders expect.
Pro tip: Model three scenarios: pessimistic, base, and optimistic revenue. If you cannot break even in the pessimistic scenario within 18 months, your fixed cost structure needs rethinking before launch.
See also: Fixed Assets, Cash Flow Forecast, Burn Rate
