It’s so important – as you embark on your journey into small business ownership – that you determine your business’ break-even point, along with the number of sales necessary to become a profitable enterprise. This is because, in addition to the tax benefits and personal satisfaction afforded by owning your own business, you are – ultimately – in business with the “intent to make a profit.”
With that in mind, we have created a “Break-Even Analysis” worksheet to assist you in determining the dollar volume of sales necessary for your business to make a profit.
On the worksheet, you will enter your estimates of:
– Fixed Costs (i.e. costs that don’t vary with sales quantities)
– Variable Costs (i.e. costs that directly relate to your per unit costs, which increase as additional product is sold)
– Selling Price (i.e. retail sales price, with any discounts subtracted)
By completing our “Break-Even Analysis” Worksheet, you have the opportunity to assess the number of units that will need to be sold in order for your business to break even, based on the price and costs entered. And – once you have calculated this break-even point – you may need to reconsider your price points and/or reduce any fixed or variable costs so that you can lower the number of units that are required for your business to become profitable.
Break-Even Analysis Worksheet
Break-Even in Number of Units = Fixed Cost + Variable Costs
Break-Even in Number of Units = __________ + __________
Engage with us to learn more about identifying your “Break-Even” costs, so your business can be as profitable as possible.
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