Do you know your break-even point?

All business owners need to be aware of their break-even point - that is, the number of units they need to sell in order to cover their operating costs.

Once you've reached your break-even point, it's time to celebrate: your business is no longer in the red, and you are officially earning a profit.

This article will show you how to calculate your break-even point so you can make wise business decisions that support greater growth.

Why your break-even point matters

What are your fixed costs?

List your variable costs

Stock

Try this simple break-even formula

Y

T

E

Fixed costs ÷ (unit sales price - variable costs)

Final thoughts

To ensure you're always making business decisions based on the most accurate, up to date information, make it a habit to update your break-even analysis regularly.

Now that you know your company's break-even point, think about what you do to increase your small business's profitability today.

We offer a range of services to help you set business goals, monitor your business performance for profit and unlock achievement of your goals. Click here for more information and contact us to arrange an appointment.

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