ROI and Payback Simulator

Calculate the financial viability of your new business, project, or franchise. Estimate the payback period, breakeven point, and accumulated return on investment (ROI) based on income and cost estimates.

Quick Models:
Microfranchise ($15,000) E-commerce ($50,000) Local Business ($120,000)
Fill in the data and click on Calculate Return to see the projection.
Monthly Net Profit
$0.00
Contribution Margin
$0.00
Estimated Payback
0 months
Accumulated ROI for the Period
0.00%
Breakeven Point
$0.00
Total Accumulated Return for the Period
$0.00

Capital Recovery Curve (Payback)

Monthly Revenue Composition

Projected Monthly Cash Flow

Month Revenue Variable Costs Fixed Costs Monthly Profit Accumulated Cash Flow Accumulated ROI

Understanding Viability Indicators: ROI, Payback, and Breakeven

When planning or investing in a new business or project, three fundamental concepts must be analyzed to reduce risks and ensure financial sustainability: the Return on Investment (ROI), the Payback Period, and the Breakeven Point.

What is ROI (Return on Investment)?

ROI is the primary indicator of a business's financial return rate. It measures the relationship between the amount of money earned and the initial amount invested. Represented as a percentage, it shows how much the initial investment yielded over a given period.

A positive ROI means that the project generated profit beyond the initial investment. A 100% ROI, for example, means that the investor recovered the entire initial investment and earned an equivalent amount in accumulated profits over the analyzed period.

What is Payback?

Payback is the period required for the net profit generated by the business to equal the initial investment amount. In simple terms, it indicates how long it will take to "break even" and start generating actual accumulated profit.

This calculator uses the Simple Payback method, which divides the initial investment by the monthly net profit. It is a crucial indicator of liquidity and risk: the shorter the payback period, the lower the risk of the initial capital being tied up in an unproductive operation for an extended period.

What is the Breakeven Point?

The Monthly Breakeven Point indicates the minimum revenue required for the company to cover all monthly expenses (both fixed and variable). At the breakeven point, the company neither generates profit nor accumulates loss (profit is exactly zero).

Calculating the breakeven point is crucial for setting minimum sales targets. By knowing the breakeven point, management knows exactly how many products need to be sold or how many services need to be provided to keep the business afloat without burning cash.

Frequently Asked Questions

Fixed costs are those that do not depend on sales volume (e.g., rent, accounting, fixed salaries). You will have to pay them regardless of whether you sell 1 or 1,000 units. Variable costs, on the other hand, vary directly with the quantity sold (e.g., taxes on revenue, sales commissions, cost of goods sold, credit card rates).

There is no universal number, as it depends on the sector. Microfranchises and small e-commerce businesses typically seek rapid paybacks, between 12 and 24 months. More traditional or industrial businesses may operate with paybacks of 36 to 60 months. The more innovative or unstable the market, the shorter the payback period should be.

If the net profit is negative, the business is operating at a loss and burning capital. In such cases, the payback period is impossible to achieve (infinite), as the accumulated debt or loss will increase every month instead of decreasing. It is necessary to review the cost structure or increase revenue to reverse the situation.