At what point in the day, week or month have you covered all your expenses and are now putting money in your pocket?
Every business owner wants to put money in their pocket right?
Break-even point = (fixed costs/gross margin %)
To calculate break even:
- Understand your fixed costs – costs you will incur whether you sell anything or not (rent, insurance, payroll etc.)
- Find out your Gross Margin – the amount of money from every sale that is left after the direct costs (as a %)
- Divide the fixed costs by the gross margin %.
This formula provides you with a magic number called your break even. This number will allow you to know what sales volume you need to start making profit!
Tip: Use Quickin or Quickbooks to calculate your break even
Setting goals and meeting them is crucial for success.
Finding your break even point is essential for exceeding those goals and growing your business.
Are you having trouble calculating break even?
Contact one of our business coaches 203.210.7003 and we can help take your business to the next level.