![]() ![]() ![]() How do you calculate the break-even point?ĭon't forget to try our free break-even point calculator! "A mistake you shouldn’t make is checking it daily, because it can get very stressful if you don’t reach it and is also hard to analyse this way."- Thierry Veil, co-founder of Bagelstein If your business is only starting, break-even analysis will allow you to anticipate when you will start earning money from your work! Now, let's see how to calculate it! This rule applies to all types of business! If your company is already successful, you can use break-even point to improve efficiency. So in order to be profitable, you'll want to reach the break even point as soon as possible, in any given period. And there's a lot, every entrepreneur is ware of this! Employees’ wages, raw materials, rent, purchases of equipment, bills, etc… Your costs will be the amount of money you spend to run your business. If for instance you run a pizzeria, your revenues will be the amount of money you generate from selling your pizzas. Analyze at what point new goods/services will become profitable.Know the impact of pricing adjustments to existing products.Know how many goods/services need to be sold in a given period.Specifically, break-even analysis allows business owners to: Break-even analysis enables business owners to identify their margin of safety ad is a critical tool for effective planning and decision making. It’s important for business owners to analyse their break-even point for several reasons. ![]() "Below this point you have to break your piggy bank to cope with the financial loss, once you are above it you make money and you can fly to the Bahamas so it is pretty wide!" - Thierry Veil, co-founder of Bagelstein As a business owner, your goal is to obviously be above this point, in order to make a profit! If you are below the break-even point, your business is not profitable, and is losing money. ![]()
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