Break-even analysis is used to determine when your business will be able to cover all its expenses and begin to make a profit. The break-even point is reached when revenue equals all business costs. To calculate your break-even point, you will need to identify your fixed and variable costs. See the break-even calculator available on the toolkit.
Most businesses have fixed costs such as rent and salaries, as well as costs for raw materials. Break-even analysis shows how many sales it takes to pay off the costs of doing business, and “break-even”. After that point, additional sales would bring profit.
BreakevenAnalysis.xlsx - Download Break-even Analysis Template